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Better business starts with the right act

This Friday is Earth Day. This year's theme is Invest in Our Planet. On Friday, social media channels will be swamped with well-intentioned mini-campaigns in which companies will try to show off how concerned they are about reducing their impact on the earth’s finite resources.

Many will talk earnestly about the importance of having a purpose beyond mere money, dropping phrases like the “triple bottom line” and the need to respect people, profits and the planet equally. Many will be sincere. But a lot will also be hollow greenwash, an exaggeration of intentions used cynically in an effort to appeal to current and potential consumers and employees.

But there are words that can make a difference. Tomorrow, two days before Earth Day, is Better Business Day in the UK. A large gathering of business leaders will converge on Westminster to show UK politicians a simple way they can act to change the business world (and yes, as a result the whole world) for the better.

The Better Business Act

Not much will be said in many of Friday's social media campaigns about section 172 of the Companies Act (s172). It’s not glamorous or fashionable and it’s hard to make it look good on Instagram. But updating s172 is the simplest and most effective way we have to ensure all businesses are forced to look out for all their stakeholders.

This is the focus of a campaign called The Better Business Act (BBA), organisers of Better Business Day. The Supper Club is a proud supporter of BBA, which has a clear ambition to get the current Companies Act updated, in a very specific way. In fact, so specific is the BBA's campaign that it has already got a bunch of whip-smart corporate lawyers to sort out the actual wording of the revised s172.

The current wording says a director's duty of care is to the shareholders. While this duty must now be carried out “having regard to” the interests of other parties, shareholders’ interests (which in most cases means relatively short-term financial profits) have clear primacy. High-profile celebrity entrepreneur and occasional FT columnist Mary Portas has joined the BBA campaign as co-chair, and in a recent column went so far as to say that shenanigans pulled by P&O Ferries earlier this year would not have been possible under the proposed new s172.

What's my motivation?

The BBA campaign resonates with The Supper Club for many reasons. We are dedicated to helping members achieve personal and business growth through their interactions with the Club and fellow members. But we also see a need to promote better growth.

To grow, an economy needs successful founders and entrepreneurs driving their companies forward. But to be sustainable in the long term growth has to be the right growth. It has to happen in a way that maintains and supports internal communities of employees and external communities of customers, suppliers and the wider society.

Business has to balance using as few of the earth’s natural resources as possible with putting back as much as possible. We need to move from thinking sustainability and maintaining the status quo, to regeneration and actively working to be carbon positive, rather than just net zero.

And it is essential all businesses adopt this approach. Especially in tough financial times, when it is too easy for one or two firms to renege on pledges, to backslide and focus on cutting costs, not carbon. When one company does this, it can be hard for competitors not to follow suit.

While there are plenty of soft pressures, such as the long-term reputation benefits of doing the right thing, which have positive impacts on brand and make it easier to attract talent. There is also the rising threat of social unrest and disruption from protest groups. But such levers take a long time to have an impact. And we are running short on time.

The IPCC and other bodies are reporting regularly on how short we are on time and how critical the climate crisis has become. Friday may be the time to Tweet or post, but now is the time to act. And the first focus should be revising the Act.