As the European representative of the global movement of B Corps, B Lab Europe welcomes the EU Commission’s consultation on Sustainable Corporate Governance. It is imperative that companies take greater account for the impact of their activities on people and planet.
As the European representative of the global movement of B Corps, B Lab Europe welcomes the EU Commission’s consultation on Sustainable Corporate Governance. It is imperative that companies take greater account for the impact of their activities on people and planet. This timely and much-needed set of proposals explores a framework for businesses to do just that.
B Lab Europe, together with the individual 60 B Corps represented below, in its response to the consultation, call on the European Commission to require company directors to balance the interests of all those who contribute to business success: namely employees, suppliers, customers, local communities, and the environment, not just investors. The best way to ensure this is through EU-wide mandatory obligations of “Duty of Care” and “Due Diligence”.
Martha Lane Fox, Chairperson of B Corp WeTransfer said: “Most company directors would choose to run their organisations for the benefit of all stakeholders, not just shareholders. However, the market structures do not unequivocally encourage, or even allow for such considerations. To change the behaviour and the impact that companies create, it is high time to change the rules under which they operate. We no longer have time to wait.“
B Lab considers that a radically more demanding approach for incorporating stakeholder considerations is required from business. Such a step is essential to the EU meeting its Green Deal target of achieving climate neutrality as a continent by 2050. It is also crucial if the EU is to successfully tackle the unsustainable inequalities of livelihood and income that prevail across Europe at present.
Paolo Braguzzi, CEO B Corp Davines said: “Doing business for the good of all stakeholders cannot be any longer just a voluntary option. This is the only way to create long term value for the society and the environment and at the same time let businesses thrive thanks to a “healthier” market context. Regulations must now provide a framework, both to set the necessary requirements and make businesses take responsibility.”
B Corps are companies that have voluntarily adopted stakeholder governance commitments into their legal articles and have met a performance standard of positive impact on society and the environment. Already over 3,700 companies globally have obtained a B Corp certification, 600 of which are based in Europe.
Alberto Alemanno, Professor of Law and Founder of The Good Lobby, said: “As the EU is set to re-write European corporate governance across the continent, it can’t miss the chance to draw inspiration from the B Corp movement and its change-making companies. Only an EU wide mandatory sustainability due diligence framework may put an end to the highly uneven playing field between sustainability-oriented businesses such as B Corps and conventional businesses.”
The experience of this global movement is powerful and positive for both society and the environment, as well as creating high company performance over the long term. Yet, while adoption of this approach is optional, business is not leveraging its exceptional power to reverse the rapid decline in our environment and the widening inequality.
Wojcieich Baginski, Attorney, Baginski.Pro and Poland B Corp Market Explorer said: “Introduction – on a pan-European level – of a mandatory obligation on management boards of companies to explicitly include and balance all stakeholder and not predominantly shareholder interests in their decision making processes is a development in European corporate law, the significance of which cannot be overstated. The EU now has a chance to lead the way in governance which is people, planet and profit oriented. B Corps who now voluntarily live by these ideas show that it is in the best interest of the company to include and balance the interests of all stakeholders – including shareholders – in their processes.”
Dr. Marcel Pietsch, Chairperson of B Corp PNZ, said: “Many industries honestly strive for net-zero by 2030. In order to get there, we also need to protect executives from potential personal liability for failure to focus on next quarter profits. Focusing on long-term sustainability should be a mandatory business principle.”
Paul Schoenmaker, Head of Impact of B Corp Tony’s Chocolonely, said: “All companies should take responsibility and actively address human rights violations in their supply chains. This legislation should raise the bar and ensure businesses are a force for good.”
Rob Symington, Director at Symington Family Estates said: “As a family wine company that relies on a stable climate and viable local communities, the threats we face are existential. People want to buy from companies that are demonstrably having a positive impact on people and planet, but we cannot rely on market forces alone. We urge the EU to adopt a broader definition of business success that responds to the pressing social and environmental challenges of our time.”
Katie Hill, Executive Chair of B Lab Europe said: “We no longer have time to wait for the slowest to catch up. We have to move urgently to ensure all companies, whatever their size and sector, exercise their duty to act for the global good. Europe should seize the opportunity to lead the way in transforming governance in businesses globally.”
About B Lab
B Lab is transforming the global economy to benefit all people, communities, and the planet. A leader in economic systems change, our global network creates standards, policies, and tools for business, and we certify companies—known as B Corps—who are leading the way. To date, our community includes over 3,800 B Corps in 70 countries and 150 industries, over 8,000 benefit corporations, and more than 100,000 companies manage their impact with the B Impact Assessment and the SDG Action Manager. For more information please visit www.bcorporation.eu.
About B Corps
Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy.
The B Corps and European B Lab network partners below are cosignatories to our letter to the European Commission reflecting this position.