Recently, EQ Investors joined a coalition of like-minded businesses: the Better Business Act (BBA) is about transforming the way we do business so that every single company in the UK, whether big or small, takes ownership of its social and environmental impact.
Together, we’re taking a straightforward ask to government: change Section 172 of the Companies Act to ensure that company directors are responsible for advancing the interests of shareholders alongside those of wider society and the environment.
The BBA has four key aims:
- To align interests between shareholders, wider society, and the environment.
- To empower directors to exercise their judgement in weighing up and advancing the interests of all involved stakeholders.
- To catalyse default change across all businesses, in all industries, making it no longer optional to consider only shareholders and not stakeholders.
- To reflect this change in how businesses, report their balance between people, planet, and profit – via strategic or impact reports.
It’s important to note that in making this change the BBA is not looking to remove a company’s commercial objectives, (indeed the Q&A on the coalition website explains that a board failing to maintain its commercial rigour could cause the company to “flounder and potentially fail”) but to require the board to enrich strategy through “a more holistic consideration of stakeholder issues alongside their focus on commercial success”.
The Covid crisis, the climate emergency and social inequality are profound and pressing problems that can only be solved if we harness the enormous potential of entrepreneurs, innovation, and enterprise. We know UK voters and consumers want business to do better, research shows that three-quarters of the public think business has a responsibility to protect the environment and the majority favour brands that do good in the world. In short, the world needs every business at its best — creating good jobs, helping to fix pressing problems and adding value to society.
Growing consensus
Behind the BBA is a broad – and growing – coalition of businesses. Household names like Waitrose, Danone, Ben & Jerry’s, Innocent, BrewDog, Cook and Abel & Cole, as well as hundreds of others, of all shapes and sizes, across the UK.
And it is not just businesses that are behind the BBA: a range of thought leaders and academics including Paul Polman, Social Value UK and the Institute of Directors are vocal supporters.
This is why we have joined this campaign – the BBA is business-led, 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.
Sophie Kennedy is joint-CEO at EQ Investors and an ESG Clarity editorial panellist.
