A proposed new law could dramatically reshape how UK businesses operate, by requiring company directors to consider the impact of their decisions on people and the planet, not just shareholders.
The Company Directors (Duties) Bill, tabled in Parliament today by Liberal Democrat MP Martin Wrigley, seeks to amend Section 172 of the Companies Act 2006 to ensure directors balance the duty to promote their company’s success with new duties to protect the environment and safeguard employees.
Currently, UK company law compels directors to act in a way that promotes the success of the business “for the benefit of its members as a whole” — meaning shareholders. Critics argue this short-term focus has contributed to scandals such as widespread environmental failings in the water sector.
Under the new proposals, businesses would be required to embed a stakeholder-led model into their decision-making, taking into account the interests of employees, customers, communities and the natural environment. Directors would also need to report annually on how they have upheld these responsibilities.
The Bill, set to be debated in the House of Commons on Friday 4 July, already enjoys cross-party support from MPs representing four different political parties.
The move is inspired by the Better Business Act campaign, led by non-profit B Lab UK — the organisation behind the B Corp movement — and supported by over 3,000 UK businesses across 15 industries. Supporters include Virgin Group, Iceland, Tony’s Chocolonely, Danone, Charlie Bigham’s, ELEMIS and Gü, alongside the Institute of Directors and ShareAction.
Supporters argue that putting purpose at the heart of business isn’t just good for society — it makes economic sense. Recent data from B Lab UK shows B Corps outperformed traditional businesses, growing their turnover by 23.2%between 2023 and 2024, compared with a national average of 16.8%. B Corps also added jobs while wider employment numbers fell.
Meanwhile, a Demos report commissioned by the Better Business Act coalition found that embracing a purpose-led economy could boost the UK’s GDP by £149 billion annually.
Chris Turner, CEO of B Lab UK, called the Bill a “major step forward” and said the time had come for UK corporate governance to reflect the realities of doing business in the 21st century. “With cross-party political momentum and support from thousands of businesses, the evidence is clear: when companies are empowered to put people and planet alongside profit, they thrive. It’s time for this to be the legal norm, not the exception,” he said.
Martin Wrigley MP, who introduced the Bill, said the proposals would “drastically shake up how companies operate.” adding: “Parliament must act to ensure companies can pursue long-term success while making a positive impact on society and the environment,” he said. “This is a huge opportunity for the UK to lead the world in responsible capitalism.”
The legislation follows Better Business Day, held in Parliament last month, which saw business leaders and politicians gather to support purpose-led business. Speaking at the event, Labour peer Lord Leong praised the ambitions of purpose-driven businesses and said the Government backed the goal of making the UK “the most trusted, forward-looking business community in the world.”
The Bill is scheduled for second reading in the House of Commons on 4 July 2025. If passed, it could fundamentally redefine corporate responsibility in the UK — and place the country at the forefront of the global movement to modernise capitalism.
