Hanging out the washing

Over the last few years, we’ve heard a lot about ‘washing’. The term ‘greenwashing’ tops the charts – from Volkswagen’s emissions scandal in 2015 to Shell Energy’s banned renewables adverts in June this year. ‘Washing’ is a compound term applied to any unsubstantiated, insincere, or misleading claims on both environmental and social credentials, such as racial, gender or LGBTQ+ issues.

However, rather than becoming preoccupied with the terminology, or frozen by reputational risk, we see this push for transparency and accountability from stakeholders as an opportunity for businesses of all sizes to become positive agents of change. This is particularly relevant in the business-to-business arena, where relationships are built on more than a single transaction.

Reflecting on operational strengths and weaknesses is good business practice. Putting that through the lens of people and the planet enables a firm to communicate what it is with a sense of purpose and to build a stand-out, authentic brand for employees and clients alike.

With so much at stake and waves of environmental, social and corporate governance (ESG) regulation, where do we start? Firstly, no individual business needs to tackle it all and it’s clear we will not fix our existential issues alone. Assess each of your business areas to figure out what is material to you. Tools such as the sustainability assessment from EcoVadis or the Business Impact Assessment (BIA) from B Labs, the body behind B Corp, will get you started.

At Cripps, we are exploring where we make a difference across our whole value chain from our choice of suppliers to how we positively influence others in the business community. Educating ourselves, evolving with the rules and mobilising quickly are ongoing challenges. But it’s vital that we ask the right questions of ourselves and our stakeholders and that we’re prepared to listen and act on the answers even when they’re inconvenient.

Once you’ve assessed your legal business through an ESG lens, share your findings, warts and all. Perhaps it feels counterintuitive for lawyers to ‘tell all’. The fact is we advise clients based on their appetite for risk and how best to manage it. We need to be honest with ourselves and others about what we are dealing with, as a sustainable business, and what we’re not. To gain confidence, don’t overreach.

At Cripps, we can’t claim to be sustainability experts on everything, but we can frame our specific problems and talk about the solutions. For example, we know we have an inconsistency in the way we screen suppliers. This financial year, we’re drawing up an Environmentally Preferable Purchasing (EPP) policy. The next steps will be to evaluate our current supply chain on their overall impact; incentivise improved performance and then provide training to our employees on how to manage supplier relationships. Each stage needs a plan for operations and communications so we bring people with us.

The UK Companies Act currently imposes directors’ duties to ‘promote the success of the company to benefit its shareholders and stakeholders’ including the community and environment (Section 172) and to exercise ‘care, skill, and diligence’ (Section 174). In the context of greenwashing this means verifying the accuracy and substance of a company's environmental claims and avoiding false or misleading statements.

The balance of these duties, and their effectiveness, are being challenged. The Better Business Act is a business-led coalition that seeks to amend Section 172 to reflect four principles: to align the interests of all stakeholders including the planet; to empower directors to balance those interests; to ensure accountability through reporting requirements; and to see this as a default change that applies to all UK businesses.

Now’s the time to cut through the jargon and figure out what matters to you. As we look around, we see global problems. There is much potential for local solutions when we work together in a non-competitive way and for the benefit of our businesses and society.

Liz Carter, purpose and impact manager, and Alice Hunter, associate at Cripps.