It’s time for a Better Business Act
BBA
Today is officially ‘Better Business Day’, although a more appropriate name might be ‘Business Should Be Better Than This’ day. Because it’s time for business to truly face into the challenges of the 21st century, and there is a simple way for policy-makers to ensure they do.
Businesses are fundamentally creative organisms. They are ‘things that make things’. They generate a product or service, and put it out into the world. And like anything generative, they rely on inputs. They need fuel and food, land and labour, brain-power and muscle-power.
The resources they rely on come from people and from the planet. So, it’s only right that these resources should be valued, rewarded and supported by the businesses that benefit from them. And as the climate crisis and social inequality deepen, the responsibility on businesses to give back what they take has only become more pronounced.
There will always be some business leaders who take this responsibility more seriously than others – who are either more aware of it, more sensitive to it, or more willing to act on it. But in the face of scientific reports calling for action ‘now or never’ on climate and a cost of living crisis that threatens to plunge many families into poverty, we need all businesses to steer themselves in the right direction.
The responsible, pioneering and future-focusses businesses are already doing just that.
But, there are more laggards than leaders, and policy makers need to raise the floor, as the most sustainable businesses raise the ceiling of what’s possible.
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That would require a Better Business Act (BBA) – a law that would change how businesses are required to behave. Currently, short-term shareholder interests (namely profit) can be in direct opposition to the interests of, and survival of, wider society and the environment. The Better Business Act would make all these interests – people, planet and profit – equally important. It would ensure businesses are legally responsible for benefiting workers, customers, communities and the environment while delivering profit.
This isn’t a dream. Today, a group of over 1,000 businesses (including my firm, Futerra) are calling upon the UK government to make this happen by amending Section 172 of the Companies Act. This will mean that all UK businesses would be required to act in the long-term interests of people and planet, not merely the businesses who choose to do so. Directors will be empowered to make decisions that consider all stakeholders, not just their shareholders; and businesses will need to report publicly on not only their financial performance, as they do currently, but on their social and environmental activities.
Laws and reports, acts and amendments – this might all imply the heavy air of obligation. But the reality is a much brighter, perhaps surprising, opportunity. Businesses have the creative freedom, the quick-footedness, and the smarts needed to make the new and different happen fast. And the chances are, their customers will reward them. The BBA’s own research shows that 76% of people in the UK want businesses to be legally responsible for their impact. And consumers are crying out for more sustainable options: most (88%) want brands to help them lead a more sustainable lifestyle, but 43% say that brands are doing the opposite. Smart businesses bridge the gap between what consumers want and what they’re currently getting. To be better at business, you have to be better for people and the planet.
Better Business Day, is the BBA’s one year anniversary and a big day of campaigning for change in the British Parliament. What better day to sign up to the Better Business Act coalition, or write to your MP?
Today, every business is faced with a fork in the road. One is well trodden by tired feet, trampling down forests and over workers’ lives. The other is a newer path, green and sunlit, walked by curious folk with big ideas and careful steps. I know which one I’m on – join me. Let’s bring everyone with us.
