B Lab UK: balancing people, planet, and profit for better business

Daisy Jameson, from the CSEN Liaison Team, spoke to Hannah Gibbs, from B Lab UK, about how businesses can have positive environmental and social impacts, and asked how civil servants can support better business practices.

Please note that the views in this blog are of B Lab UK, and do not represent the views of the Civil Service Environment Network.

Can you provide a brief introduction to B Lab UK, the origins and growth of the B Corp movement, and how this sits within the wider context of business as a force for good?

The current economic system, driven by business as one of its key actors, is not meeting its enormous promise to create positive impact. B Lab’s global vision is of an inclusive, equitable and regenerative economic system for all people and the planet.

A leader in economic systems change, our international network creates standards, policies, tools, and programs for business, and we certify companies—known as B Corps—who are leading the way. B Corps are businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability.

The B Corp movement launched almost 15 years ago in the US and over five years ago in the UK. There are now over 4,000 B Corps in the world and 500 in the UK, including innocent, Ella’s Kitchen, Jamie Oliver Group, Abel & Cole, Bulb and The Body Shop. The UK B Corp community is the second largest in the world (after the US) and is one of the fastest growing.

An essential part of B Lab’s strategy is catalysing policy change to enable business as a force for good. The Better Business Act is a campaign, initiated by B Lab UK, to change UK law to make sure every single company in the UK, whether big or small, aligns the interests of their shareholders with those of wider society and the environment.

Can you tell us more about the Better Business Act? How have you managed to get this onto the government's agenda?

The Better Business Act will transform the way we do business by amending section 172 of The Companies Act. The Act will ensure that company directors are responsible for advancing the interests of shareholders alongside those of wider society and the environment.

The campaign is backed by a broad and growing coalition of leaders from across all sectors and all regions of the UK (there are now over 650 supporters, including John Lewis, Iceland and innocent). Many of these influential leaders have spoken with their local representatives about the campaign; the coalition has found support for reform from across Parliament including on the Government’s own backbenches as well as receptiveness within Government itself.

A successful Parliamentary launch bringing together the Institute of Directors and the Trade Union Congress in calling for change, along with coverage in The Times, the Financial Times and Sky News has also made the Government sit up and pay attention.

What impact do you see the BBA having on business practices in the UK and how will you go about measuring this?

The Better Business Act will mean every single company in the UK, whether big or small, takes ownership of its social and environmental impact. This means freeing decision-makers in business to act in everyone’s long term interests – combining traditions of good stewardship and responsibility with new ideas to meet the challenges of the 21st century. This will change the nature of conversations in the boardroom, allowing for a more holistic approach to the challenges faced by the company’s directors.

In situations where a director has to choose between the company’s intention to create positive social or environmental impacts and the interests of shareholders, the directors would no longer be compelled to default to prioritising shareholders. Following this change, businesses will be required to report on how they balance people, planet and profit in a strategic report or impact report, where one is currently required.

At the moment, businesses are faced with a range of different reporting requests, but the approach proposed by the BBA should allow a company to share one consistent piece of reporting.

What role do you see the government having in driving better business practices relative to private firms/lobby groups? Do you think businesses have a responsibility to shape more socially and environmentally responsible practices over traditionally leaving these decisions to government? If yes, is this linked to the urgency of environmental issues i.e. climate crisis?

The climate emergency and social inequality are profound and pressing problems, thrown into sharp relief by the COVID crisis, that can only be solved if we harness the enormous potential of entrepreneurs, innovation and enterprise. Government alone cannot solve these challenges; instead it will require purpose-driven partnership between the State, businesses and communities.

One way Government can facilitate this is by updating the legal context in which business operates - enabling an environment for business decision makers to adopt a long term perspective and incorporate the needs of all stakeholders.

Our research shows that UK voters and consumers want business to do better. Three quarters of the UK public think business has a responsibility to protect the environment and the majority favour brands that do good in the world.

What can we, as diverse civil servants and members of CSEN, do to champion the idea of better business practices in and outside our day jobs?

Civil servants committed to leveraging the power of business to help address policy challenges should be confident in making the case for the Better Business Act to both colleagues across Whitehall as well as to Ministers in their own departments. The Better Business Act would empower more businesses to play a leading role in solving the problems of people and the planet that naturally cut across siloed policy areas.

What message would you like to give to civil servants working on implementing the Better Business Act if and when it becomes government policy?

Should the campaign result in legislation, those civil servants involved in implementation will be playing an important role in helping deliver a new contract between business and society. One that far better reflects both how today’s business leaders see their role and society’s heightened expectations.