Hogan Lovells contributes to BITC's report and toolkit to support businesses in increasing stakeholder powers to include ESG targets

London, 30 September 2022 – Hogan Lovells has contributed to a report and toolkit produced by Business in the Community (BITC), working alongside the  Better Business Act (“BBA”), to explain how companies can work with their stakeholders to ensure their success whilst having a positive impact. 

The report outlines how changes to the Companies Act 2006 proposed by the BBA could lead to greater stakeholder accountability for businesses, as well as the barriers to this approach. The report also seeks to understand how, and if, business leaders believe the changes proposed by the BBA campaign could empower UK company directors to lead their organisations in creating a cleaner, greener and fairer future for all. 

The toolkit helps businesses navigate through the noisy ESG landscape and ensures that they hold themselves to account to all stakeholders, including shareholders, customers, employees, the communities they operate in and the environment. 

Alastair Loasby, Responsible Business & Strategy Campaign Director at Business in the Community, said: “Research shows that consumers are demanding more from the companies that they purchase from with three in five consumers admitting that they will boycott brands next year who are not taking action on climate change. Ensuring that stakeholders have the authority to hold businesses to account on their ESG targets, alongside their financial targets isn’t just the right thing to do, it makes business sense. The toolkit that BITC is launching today aims to support those companies who are taking their first steps on giving stakeholders additional powers to ensure that their ESG goals are being met.” 

The toolkit shares the reasons why businesses should embed stakeholder accountability into their corporate structure, and outlines four key recommendations to consider when thinking about implementing stakeholder accountability, including:

  • Identify your stakeholders
  • Listen and respond – the difference between engagement and accountability
  • Measure and communicate the link between stakeholder capitalism and commercial success
  • Become a leader in stakeholder governance before it becomes compulsory

Scott Tindall, partner at Hogan Lovells, added: “Speaking to a range of corporates about the steps they have taken to embed stakeholder accountability into their business has been a heartening experience.  It is clear that these issues are more topical than ever and that businesses are keen to progress the agenda around purpose and stakeholder governance. We heard that true stakeholder engagement cannot be a tick box exercise and has to be something meaningful that enables stakeholders to hold businesses to account.”

The toolkit and report can be accessed here: Is Legislation the Best Way to Achieve Stakeholder Capitalism? - Business in the Community (bitc.org.uk)

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