The Better Business Act: What UK Businesses Need to Know

In the UK, a coalition of businesses are working together to advocate for a change in national legislation that would ensure that every company has to align their interests with those of wider society and the environment. Called the Better Business Act, this change to Section 172 of the Companies Act would require businesses to align with long term interests of people, planet, and profit, meaning they would be legally responsible for benefiting workers, customers, communities, and the environment while delivering profit. The four key principles in the Better Business Act are:

• Aligned interests: interests of shareholders will advance alongside those of wider society and the environment
• Empowering directors: directors will be empowered to exercise their judgement in understanding and advancing the interests of all stakeholders
• Default change: the law will apply to all businesses by default meaning it would no longer be optional to benefit wider stakeholders beyond shareholders
• Reflected in reporting: businesses will have to report on how they balance people, planet, and profit in a strategic or impact report, where one is currently required

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How the BBA Changes the Landscape for SMEs

Modern procurement filters and AI-driven vetting tools are now prioritizing businesses that show clear preparation for these shifts. To ensure your business remains visible and compliant, this table breaks down the practical impact of the Act.

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The BBA Strategy: What Changes?

1. Legal Duty

• The Shift: Balancing staff and planet alongside profit.
• SME Win: Legal protection for founders who prioritize "doing the right thing" over pure profit.

2. Reporting

• The Shift: Standardized annual impact reporting.
• SME Win: You only have to measure your impact once, rather than filling out 50 different "green" forms for every new client.

3. Competition

• The Shift: A level playing field by law.
• SME Win: Stops "cowboy" competitors from undercutting you by ignoring their environmental costs.

Who is Involved?

The strategy and concept for the Better Business Act were initiated by B Lab UK. B Lab UK is a country partner of the global B Lab organisation that helps to promote their mission to transform the global economy to benefit all people, communities, and the planet. B Lab UK was founded in 2006 with an aim of inspiring and enabling people to use business as a force for good. 

One way in which they are working to achieve this is through concept and strategy creation for the Better Business Act, which aligns directly with B Corp values. To learn more about B Corp, please see this blog!

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There are currently over 3000 businesses that are part of the coalition supporting the adoption of the Better Business Act. These businesses range across all industries and sizes but all have the same goal of promoting business as a force for good and centering stakeholders, society, and the environment in their decision making. 

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Examples of signatories include Patagonia, Danone, Oddbox, Pukka and The Body Shop. As a coalition, the businesses champion the adoption of the Better Business Act in many different ways, including visiting Westminster to engage with their MPs, while putting the principles of the act into action in their own organisations. 

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Why is the Better Business Act Important

Businesses have the potential to play a large role in the fight against climate change and in ensuring equitable, positive outcomes for all communities. By committing to benefiting workers, customers, communities, and the environment, while still delivering profit, we can take a critical step towards a global economy that benefits all.

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Business Reality Check:

Most UK firms are currently unprepared for the reporting requirements that will be mandated by the BBA. Is your current sustainability data robust enough to survive a potential audit or supply chain request?

Book a BBA Readiness Call with ENSO

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How to Get Involved 

If you are a business in the UK and are interested in getting involved with the Better Business Act, the first step is to check out their website and learn more about their work and goals. You can sign up to get involved through a form on their website if you are ready to take action and to follow these five requirements:

• Support the four key principles of the Better Business Act
  
  • Aligned interests
  • Empowering directors
  • Default change
  • Reflected in reporting
• List your company name and logo on the Better Business Act website
• Advocate for the Better Business Act and participate in campaign activities
• Ensure your company doesn’t undertake any corporate activities that would undermine the objectives of the campaign
• Act and communicate in a non party political manner

Whether you are already on your sustainability journey or are just starting out, joining the Better Business Act Coalition will show your commitment to change. On top of this, you will be part of a like-minded community that is working towards the same goals you are, meaning there will be opportunities for knowledge sharing, helping you to progress on your sustainability journey while supporting the Better Business Act. 

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If you’ve already signed up…

Once you have signed up there are many ways to help make progress towards implementation and to use the BBA to help your business. Make sure you stay up to date on the BBA, its progress, and any related events through their social media and their website. Staying involved will help you to learn as much as possible, make progress towards your own sustainability goals, and to keep the movement for the adoption of the BBA going!

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Also, make sure to communicate your commitment to the BBA and all of your sustainability goals to both internal and external stakeholders. Bring your team on the journey with you and discuss the BBA and why you are engaging with sustainability. Make sure to share progress regularly and to provide a way for team members to share their ideas and thoughts. 

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With external stakeholders, like customers, investors, or partners, it is just as important to be transparent about your journey. Share your commitment to the BBA on your website, social media, and through sustainability reports regularly to show progress and continued action. At ENSO, we work to help you create strong sustainability strategies, implement actions, and communicate your journey and engagement with initiatives like the BBA. Communication is a key part of the journey, as it helps you to inspire others to take action and turn sustainability into your competitive advantage. 

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Not sure where your business stands? You do not need a legal team to get started. At ENSO, we translate the BBA principles into a practical roadmap for SMEs. We help you turn your commitment into a competitive advantage that wins customers.