Changing policy

To tackle society’s most pressing issues, we need to go beyond voluntary individual business transformation to a world where all businesses take into account their impact on people and the planet. B Lab drives the creation and implementation of policy work, pushing for meaningful legal change around corporate accountability and social and environmental impact.

European flags blowing in the wind

How business can advocate for action

From promoting “benefit corporation” corporate structures to be recognized across nations to pan-European efforts, B Lab Europe’s policy initiatives advocate for a global shift from shareholder primacy to stakeholder governance.

A stakeholder is an individual, a group or an entity that has an interest in and /or is affected by the decisions of a company. So at the narrowest definition, it is the close contributors to the company – employees, investors, suppliers. But often forgotten is the natural environment, the communities it serves or shapes in some way, the customers.

In economies where the shareholder interest is the dominant or – at extreme, is the only interest considered – this would be defined as shareholder capitalism. Conversely, B Lab advocates for a shift towards stakeholder governance: an economy where the dominant approach is to consider the interests of all stakeholders equally.

Most economies sit somewhere on the spectrum.

Interdependence Coalition logo

Interdependence Coalition

Interdependence Coalition logo

B Lab Europe launched the Interdependence Coalition (IC) in 2021 with the ambition to embed stakeholder governance into company law at a European level. This would truly unleash the power of business to be the force for good and help realize the ambitions of the European Green Deal.

In 2022, more than 150 Certified B Corporations, systems change and impact-driven organizations joined the Interdependence Coalition. Its aim is to embed one of the fundamentals of the B Corp movement – namely, for businesses to consider the impact of their decisions on all stakeholders – as a mandatory obligation for businesses operating in Europe.

In 2023, the powerful multi-sector Interdependence Coalition continues to present its case to policymakers and to the public with press articles, webinars and further briefing papers to uphold Article 25. On June 1st, the CSDDD was voted in by the European Parliament and at the date this report was first published, the directive was in trilogue.

Latest Updates

Since the approval of the Green Deal, beyond the CSDDD there has been a wave of new legislation and directives being proposed across the EU.

  • Aftermath of CSDDD

    Beyond rules and regulations that look to hold companies accountable for reporting, managing and mitigating their social and environmental impact, there are also several proposals on the table that look to standardize how companies communicate about their impact, find more of a consensus around the role of certifications and reinforce the importance of third-party verification of impact.

  • CSRD and SFDR

    B Lab Europe welcomes and has actively contributed and advocated for directives related to stakeholder governance, as well as the developments in the sustainability reporting field, namely Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosures Regulation (SFDR) to make sure that our voice is heard.

  • Looking Ahead

    Although it is still at the early stages of the EU legislative process, B Lab Europe continues to monitor these initiatives to ensure interoperability between standards. We are also exploring the expansion of collaborations with independent third parties for conformity assessments and opportunities for international accreditation once our new standards are in place.

B Lab Europe join CSRD.org coalition

CSRD Coalition

B Lab Europe join CSRD.org coalition

Transparency from businesses on their societal impacts is vital for a sustainable European economy.

B Lab Europe joined the CSRD.org coalition with Impact Economy Foundation, Impact Institute, True Price and other organizations to urge the European Commission for more ambitious sustainability reporting standards.

The European Sustainability Reporting Standards will set clear rules for disclosing environmental, social and governance information. More ambition is needed to empower investors, regulators, and citizens to support truly sustainable businesses.

SFDR

As the European Union is moving forward with the development of new legislation as part of the EU Green Deal, B Lab Europe has been following each and every step to make sure that when it comes to stakeholder governance our voice and that of our allies is heard.

The EU strategy is to strengthen the foundations for sustainable investment. This notably required that companies and financial institutions need to improve their disclosures on ESG data so that investors are fully informed about the sustainability of their investments. We firmly believe sustainable corporate governance voluntary indicators are useful to signal the level of commitment of an investee to sustainable practices.

The Sustainable Finance Disclosures Regulation (SFDR) heavily relies on the concept of ‘good governance practices’ but does not define what they are. We submit that a lack of any meaningful embedment of sustainability at the highest level of governance constitutes a principal adverse impact (PAI) – any impact of investment decisions or advice that results in a negative effect on sustainability factors, such as environmental, social and employee concerns and respect for human rights.

The Role of Benefit Corporations

A benefit corporation is a legal tool to create a solid foundation for long-term mission alignment and value creation. It protects company missions through capital raises and leadership changes, creates more flexibility when evaluating potential sale and liquidity options, and prepares businesses to lead a mission-driven life post-IPO.

B Lab and the B Corp movement have helped promote the passage of benefit corporation legislation in 50+ jurisdictions around the world, including the following initiatives across Europe:

  • Italy

    Back in 2016, Italy became the first European state and the second country in the world to create a new legal status for companies, called “Società Benefit.” After several Chambers of Commerce rejected attempts of B Corps to restructure their Articles of Association, a new legal form of company was created for which the corporate governance rules were modeled after the Public Benefit Statute from Delaware, US.

  • France

    Société à Mission is the French legal framework in which businesses pursue a set social and environmental purpose with specific sustainability goals. These companies need to create a Mission Committee responsible for monitoring progress made towards achieving these objectives and appoint an independent third party to verify that the mission is carried out. The number of Société à Mission has jumped by 42% since the end of 2020.

  • Spain

    In 2022 the Congress of Deputies has approved in plenary session the creation of a new legal framework, the Common Benefit and Interest Companies (SBIC), which recognizes Purpose-Driven Companies in Spain. This legal framework, which is included through a transactional amendment within the Create and Grow Law approved today, welcomes all those companies that generate a social and environmental benefit, in addition to an economic return.

  • Switzerland

    With the aim of engaging an even broader set of organizations to use business as a force good with the support of the Swiss B Corp community, B Lab Switzerland initiated the Swiss Triple Impact in 2020, a national engagement program. In addition, The Swiss government’s Public Procurement Act sets obligatory sustainability criteria for all of its 27 states. B Lab Switzerland successfully got the B Corp certification to be a recognized sustainability label.

Partners in policy

the good lobby logo

The Good Lobby

The Good Lobby is a non-profit civic start-up committed to equalizing access to power for a more plural, inclusive and democratic society.

Global Reporting Initiative

Global Reporting Initiative

GRI (Global Reporting Initiative) is an independent organization that helps businesses take responsibility for their impacts.

shareaction logo

ShareAction

ShareAction works to define the highest standards for responsible investment and to drive change until these standards are adopted worldwide.

Contact Us

Interested in collaborating on policy initiatives across Europe? Get in touch!







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