The Better Business Act (BBA) is a proposed amendment to Section 172 of the UK Companies Act that aims to make companies think more about how their actions affect people and the planet, not just about making profits.
Under the change, company directors would be tasked with ensuring they align social and environmental impact with shareholder returns — meaning applying a triple bottom line principle. With over 2,000 BBA coalition members supporting the change, many companies, including Patagonia, The Guardian Media Group, Innocent Drinks and Tony’s Chocolonely, have already made the shift in their organisations, demonstrating their commitment to greater responsibility in reporting.
“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.”
— BBA
The BBA calls for four principles to be reflected in an amended Section 172 of the Companies Act. These are:
- Aligned interests – where the interests of shareholders are now advanced alongside those of wider society and the environment
- Empowering directors – empowering directors to exercise their judgement in weighing up and advancing the interests of all stakeholders
- Default change – applying to all businesses by default, and no longer be optional to benefit wider stakeholders beyond shareholders
- Reflected in reporting – businesses must report on how they balance people, planet and profit in a strategic or impact report
If passed, the Act would represent a significant step forward in creating a more sustainable and equitable economy. However, it is not without its critics, who argue that it could lead to increased bureaucracy and regulatory burden for businesses.
Despite these criticisms, the BBA has gained significant momentum recently with business leaders, policy-makers and MPs gathering for Better Business Day in Westminster on 26th April. The Act represents a significant step forward in the fight for a more responsible business world. It could have a big impact on how companies operate in the UK and, more importantly, the health and well-being of the planet and its people.
Read more about the Better Business Act.