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08 Nov 2022 Industry News

Faith in Nature “put nature on the board”

Faith in Nature, the body and haircare brand has become the first company in the world to “put nature on the board”.

The company’s articles of association, which were updated in September, state that the board of directors shall include “at least one Nature Guardian who acts on behalf of Nature”. 

In the articles filed at Companies House, nature is defined as “the natural world and all non-human species that inhabit it”.  The guardian’s role is to ensure that the board of directors gives “due consideration to the environmental impact” of the company’s actions. 

The decision to formally appoint a director to speak on behalf of nature may be welcomed by the Better Business Act campaign which calls for an amendment to section 172 of the Companies Act 2006. 

Section 172 currently states that directors must act in a way that promotes “the success of the company for the benefit of its members as a whole”.  Whilst the directors should have regard to (amongst other things) the “impact of the company’s operations on the community and the environment”, the Better Business Act campaign argues that the default position of shareholder primacy should change. 

The campaign suggests an amendment to section 172 that will empower directors to advance shareholder interests alongside those of wider society and the environment.  The aim is that where a board needs to choose between creating a positive social or environmental impact and advancing the interests of its shareholders, the default for directors would no longer be prioritising shareholders.

The Better Business Act campaign and Faith in Nature’s decision to appoint a nature guardian to its board both come at a time when companies are facing increasing pressure from their customers, staff and shareholders to conduct their business in a sustainable way. 

At the same time however, companies should be wary of overstating their eco credentials; as my colleague Charlie Hewlett points out in this article, “greenwashing” can lead to a fall in customer satisfaction and have a negative impact on a company’s bottom line.

Hilary Wilkinson is an Associate in the Corporate team at Boodle Hatfield and a member of the firm’s specialist Entrepreneurs Group.