Asked by: Steve Race (Labour - Exeter)
Question to the Department for Business and Trade:
To ask the Secretary of State for Business and Trade, what steps his Department is taking to ensure that company directors consider the interests of (a) workers and (b) the environment.
Answered by Justin Madders - Parliamentary Under Secretary of State (Department for Business and Trade)
Under section 172(1) of the Companies Act 2006, company directors are required to have regard to the interests of the company’s employees and the impact of the company’s operations on the environment. Since 2019, directors of large companies have been required to report annually on how they have met this duty.
The Government will consult this year on requirements for economically significant companies to report on their sustainability-related risks and opportunities via UK Sustainability Reporting Standards, and on how best to take forward the Government’s manifesto commitment on climate transition plan requirements.
Asked by: Steve Race (Labour - Exeter)
Question to the Department for Business and Trade:
To ask the Secretary of State for Business and Trade, what support his Department is offering to businesses to alter articles of association to align the interests of (a) people, (b) the planet and (c) profit.
Answered by Justin Madders - Parliamentary Under Secretary of State (Department for Business and Trade)
Under section 21 of the Companies Act 2006, a company may alter its articles of association by special resolution (requiring 75% approval of its shareholders), and under section 172(2) of the Act, a company may set out a distinctive purpose that its directors must lawfully follow. Many businesses already use these provisions to set out how their directors should consider the interests of shareholders, employees and the environment.