Written by Hannah Cox, founder of betternotstop
I don’t think that Customers should be the ones who have to research whether businesses are good for people and the planet.
It should be easy and affordable for anyone to be able to shop for what they want without worrying about if it is bad for the planet.
I believe the responsibility should lie with businesses. They should ensure that what they create and sell does not create a negative impact on society or the environment, and be held accountable on what they are doing to be a positive impact.
And it’s not just me.
A poll, conducted by Hanbury Strategy in May 2020, asked the UK public on their attitudes toward capitalism and the role of business in addressing environmental, societal and economic challenges during the post-COVID-19 recovery.
72% of people believe that business should have a legal responsibility to the planet and people, alongside maximising profits.
The Better Business Act (BBA) is a B Lab UK-led campaign to change the law so that every single company in the UK, whether big or small, takes ownership of its social and environmental impact.
I am excited to be a B Corp Ambassador, championing this campaign and helping spread the word of what we are trying to achieve.
So what is the Better Business Act trying to do?
The BBA is asking the UK government to change the Companies Act (2006). This forms the primary source of UK company law.
B Lab UK want the government to change a specific part of the Companies Act, called section 172. This section says that a director of a company must “act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole.”
It means that the Directors priority is in the interest of the shareholders of the company which is making money for them.
B Lab UK wants them to replace this and instead say that the directors priority is making decisions in the interest of the stakeholders. A stakeholder is anyone or thing that has an interest in a company and can either affect or be affected by the business, like all people and the planet!
So how could this affect businesses and work in the U.K?
In the UK, we have over six million private sector businesses. Of these 59% are sole traders, 34% are LTD companies and 7% are partnerships. In total these businesses employ over 16.8 million people and contribute a turn over of £2.3 trillion to the UK economy. That’s A LOT of people and money that could potentially be affected by the better business act.
So will all of them be affected?
First, let’s have a quick chat about the different kinds of businesses that make up the private sector.
- Sole trader is a self-employed person who owns and runs their own business as an individual. (source)
- Partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits. (source)
- Limited (LTD) Company is a form of business which is legally separate from its owners and managers. In the UK, it must be incorporated at Companies House.
The better business act is asking for a change of law for Ltd Companies. Looking at the statistics may make you think that it is a small part of the private sector, but LTD Companies employ over 14.3 million of the 16.8 million people in the sector!
Changing this law will mean that over two million businesses will have to change how they operate. Which means potentially 14.3 million people will have to change how they work.
Ltd Company directors will have to look at all aspects of their business and make sure that they work hard to improve the positive impact their business has on their workers, community, customers and the environment.
What businesses are leading the way?
Over 500 UK businesses have already recognised that it is their responsibility to make it easy for its customers and clients to know that they are working hard to look after the world we live in.
They have already changed their legal structure with the UK government so that they work in the interest of the stakeholders rather than the shareholders.
This is part of the B Corp certification process, which includes having to pass an assessment which scores them on their social and environmental impact. betternotstop is one of these companies, as well as household names like Patagonia, Cook and Toast Ale.
I have already talked about How and Why businesses get B Corp Certified in this article, as well as made a quick video explaining how it works.
You can see what companies are B Corp Certified by searching online, or looking for the B Corp Logo on it’s packaging. This is a great way to see what businesses are leading the way. You can also check out my Top 50 better business guide.
What can you do to help?
If you do run your own business and are interested in getting involved, feel free to send me an email and book in for a virtual coffee with me, Hannah.
It is important to recognise that everyone can help make this happen, even if you don’t run your own business!
Here are some examples of what you can do to get involved:
- Use your social media to let your friends and family know about the better business act. Just share this article using the links below or tag us in it!
- Download the better business guide to discover new B Corp companies in you can swap to
- Search for the B Corp Logo when you are food shopping and perhaps try something new!
- Contact your local MP telling them about the campaign and your support of it.
- Use your social media to let your friends and family know about the better business act. Just share this article using the links below or tag us in it!
- Visit the B Lab UK website to learn more about the Campaign
The great thing about the better business act is that it goes directly to the source.
It focuses the responsibility on both businesses and the government to make it easy for everyone to ensure we create a better world for ourselves and for generations to come.
I’d be interested to know what you think about the better business act and if you think it is enough?
What changes would you make if you were in charge! Let me know in the comments below…
