A newly proposed bill looks to mandate businesses to consider their impact on our planet

Fast fashion, products with planned obsolescence, and a culture of disposable products are all more modern inventions we can agree aren’t good for us, or our planet. The fashion industry alone is responsible for 10% of the annual global carbon emissions, while fast fashion emissions specifically are expected to grow by 50% by 2030. But what if businesses were required to be more environmentally friendly, and to consider the impact of how they operate on both people and our planet?

A new bill scheduled to be debated in Parliament on Friday 4th July aims to change how businesses balance profit, employees, and the environment. The Company Directors (Duties) Bill would require company directors to balance shareholder profits alongside employee and environmental interests. The bill was inspired by the Better Business Act campaign and led by B Lab UK, the non-profit behind the UK B Corp movement. Currently, over 3,000 businesses across 15 sectors, from tech and finance to insurance and wellbeing brands, have received B Corp certification

The proposed bill would amend section 172 of the Companies Act 2006, to require company directors to “balance their duty to promote the success of the company with duties in respect of the environment and the company’s employees.” Currently, directors are required to act in a way they believe will “most likely to promote the success of the company for the benefit of its members as a whole” – essentially, being required to prioritise shareholders above all other areas.

Recent corporate scandals, such as water companies’ environmental failings, demonstrate how companies are prioritising short-term financial performance over long-term sustainability.

A change in the law would introduce new criteria to ensure adequate safeguards for both the natural and social environments, alongside requirements for annual reporting on these commitments. In practice, it is hoped that the Bill would require directors to consider shareholders alongside employees, customers, local communities, and the environment when making decisions.

Changes to how businesses operate wouldn’t just help the environment, but could help boost profits, too. Research from B Lab UK shows that UK B Corps (companies committed to balancing profit with purpose) outperformed ordinary businesses from 2023 to 2024, increasing turnover by 23.2% compared to the national average of 16.8%. During the same period, UK B Corps saw a 9.6% increase in employee headcount, compared to a national decrease of 0.5%.

According to The Purpose Divided Report, if all businesses acted like purpose-led businesses (prioritising societal and/or environmental impact over purely profit), we would see a significant improvement in the UK’s economic performance, including an estimated 7% boost to the UK GDP and a seven-fold increase in R&D expenditure.

Currently, over 3,000 businesses are UK B Corps, ranging from big brand names including Iceland, Virgin Group, and Tony’s Chocolonely, to nonprofits and membership organisations such as the RSPB and Institute of Directors.

The legislation, spearheaded by Liberal Democrat MP Martin Wrigley, already has dozens of MPs supporting it across political parties. Martin commented, “This Bill would drastically shake up how companies operate. Parliament must act to create a legal framework that empowers companies to prioritise long-term sustainability alongside financial success, ensuring the two go hand-in-hand. The UK has a unique opportunity to become a global leader in transforming corporate governance so that every business is a force for good.”

If passed, the Company Directors (Duties) Bill could mark a turning point in how we define business success, helping shift the focus from short-term gains to long-term value for people and the planet. With proven results from the B Corp community and strong cross-party support, there is real momentum behind this movement. This bill offers not just a legal shift, but a cultural one towards a future where doing good and doing well no longer need to be at odds, but can be focused on side by side.