Imagine if it was a legal requirement for all businesses to act in the interests not only of their shareholders, but also of wider society and the environment? It would certainly offer hope for a better future. This legal requirement is a reality for all certified B Corps, like us, who have amended their articles of association to make them accountable in the balancing of purpose and profit, but not for others. All it would take though, is an amendment to Section 172 of the Companies Act.
This is the aim of The Better Business Act: to change UK law to ensure that every company here – whether big or small – puts balancing people, profit and planet at the heart of their purpose and the responsibility of their directors. The health of humanity and the natural world must be considered equal to the health of a business’s balance sheet.
Leap are proud to be amongst the first 300 businesses to sign up and back this campaign, alongside the likes of Innocent, Brewdog, Patagonia, Triodos Bank, Pukka Teas, Vivo Barefoot, Ella’s Kitchen, Ben & Jerry’s and John Lewis and Partners/Waitrose. The Better Business Act is quickly gathering the support of businesses and business leaders from across the spectrum of British industries, both B Corps and beyond, and whilst our community of B Corps have led the charge on this campaign it is designed to appeal to and garner support from any business.
“Why would business not do this? We need to look after our natural and social capital at every possible business interaction and this bill is a key way for UK businesses to lead the way this decade.”
Leap founder Matt Hocking
The Better Business Act is a business-led campaign, driven by leaders who recognise that the law has fallen behind business culture and who have proven that this approach to business works for everyone. For it to be successful in enacting a change in the law it needs to be seen to be a change that the business community has demanded, rather than had imposed upon it.
The campaign’s objective is to see the following four key principles reflected in an amended Section 172 of the Companies Act:
- Aligned Interests – The interests of shareholders are now advanced alongside those of wider society and the environment. This establishes a new principle of fiduciary duty within Section 172 of the Companies Act.
- Empowering Directors – This change must empower directors to exercise their judgement in weighing up and advancing the interests of all stakeholders.
- Default Change – This change must apply to all businesses by default. It must no longer be optional to benefit wider stakeholders beyond shareholders.
- Reflected in reporting – Following this change, businesses must report on how they balance people, planet and profit in a strategic report or impact report, where one is currently required.
An example amendment to Section 172 of the Companies Act, incorporating these principles, can be found here. You can compare it to the existing legislation, here.
We believe that the Better Business Act is a unique opportunity to demonstrate UK leadership on the global stage – creating a competitive advantage, driving innovation, accelerating progress to net zero, and aligning with the government’s ambition to build back better. We also believe that as the country emerges from the shadow of the pandemic there is no better time to reset the contract between business and society, and never has it been more necessary.
Please join us in signing up to support the Better Business Act, and share it amongst your network so that we have the greatest weight possible behind this from the business community as the campaign is put to parliamentarians and work begins to have it passed into legislation.
Join us, act now: www.betterbusinessact.org.
