Practicing Sustainability: The Legal Aspects

Updated: Jun 11

Setting up a mission-driven business seems easy on paper, but there's a lot to think about in practice — especially on the legal side of things.


You want to ensure that you accomplish your mission and get your message out, but how do you ensure your company stays true to its goal?


How do you ensure the sustainability of your business?


The legal aspect of a business is critical to making your vision a reality.


Angie Redecopp is the founder and CEO of Impact Business Law, a Canada-based company focusing on SMEs. She also helps startups and other organizations define and practice their ESG policies to ensure sustainability.



The Legal Side of Sustainability

Lawyers play an essential role in setting up and guiding your business from start to finish. Having big goals, lofty aspirations, and a world-changing mission is good, but you need a solid legal foundation to accomplish all of those. Building a business requires managing a lot of details. For example:

  • What’s your share structure?

  • How do you incentivize sustainability?

  • How will you incorporate?

  • What’s your code of conduct?

Lawyers help answer those questions; furthermore, their expertise means they'll raise concerns that you might never have considered.


If you’re a business looking to get B Corp certification, lawyers can big a significant help. According to Angie:

To do that, though, there's lots of policies, procedures that you need to have in place. But that legal element, you need to amend your articles and include specific language and your articles are, that's the document that's going to govern your incorporation.”

When you incorporate, you’ll need to state specific things, such as how you’ll benefit stakeholders and not just shareholders. The exact wording may differ depending on the location of your company — again, there are lots of details to consider that a lawyer can help you manage.


All this is to ensure that your company can accomplish its mission — you don't want to be stuck in a legal hole while trying to do your business for good!


Ensuring Accountability

Throughout your business's life cycle, you might find that your company drifts away from your vision — maybe the people you hired have different ideas, or your business partners don't believe in the same things you do.


The power of law can help here. For instance, lawyers can create templates or processes that help ensure your company's executives remain aligned to the company's original goals. Having well-written codes of conduct can ensure that the people you recruit have the same vision you do before they sign on.


Legal documents stating your company's ethics and beliefs can also help you choose your business partners. What's more, it can help ensure that the companies you work with stay aligned with you.


For example, when managing your supply chain, your suppliers can be held accountable to your business's code of conduct. This accountability goes both ways: it can also ensure that your company assists its suppliers, improving supplier relationships.


All in all, accountability to your values is a vital aspect of any mission-driven business. Your company's code of conduct will define how you do business. Angie says,

"...When you're setting up your governance, and think of governance as being, I'm gonna have a code of conduct, even if you're just a one person shop. I'm gonna have a code of conduct that kind of sets out how we do business, I might not put it on my web website, it might be internal, but it's something I'm going to hold myself accountable to."

Legal Documents for Practicing Sustainability

When it comes down to it, your legal documents will be critical in the good governance of your company. From the inception stage, it's vital to recognize investor, shareholder, and stakeholder perspectives.


Reports

A vital role that lawyers play is in how your company handles its relationships with other companies and the general public. Whenever your business makes a report, it's vital to ensure that they state precisely what your company does.


Failing to do so constitutes misrepresentation — a legal pitfall that could ruin your relationships with other entities. It's vital to ensure that your reports are specific and align with your company's values.


Contracts

All the contracts that involve your business or its people also help ensure sustainability.


These commitments help keep your people aligned to your company's values — and the contract enforces these commitments. Contracts can also be beneficial to accomplishing your company's vision by letting you engage with other like-minded companies. However, lawyers can protect your company:

"But if you're working with others in your industry, collaboration sounds good. But you also have to make sure you're not triggering any sort of anti-competition type laws; anything that you're doing that involves other people can, you know, have obligations or rights or commitments that go along with it."

The Practical Questions

Lawyers have a lot of hats to wear in your company, but they're indispensable. A business can't run without having a solid legal foundation beneath it. Ensuring the legal aspect of your business isn't just for sustainability and profit: it also keeps your business afloat, protects it from legal pitfalls, and helps ensure accountability for every member of your company.


When it comes to thinking about the legal questions, Angie has two questions to consider:


1. What’s important to you in terms of sustainability?


The answer to this question heavily depends on what your company does: do you manufacture products and generate a significant amount of pollution? Do you have a large number of employees and therefore need to focus on compensation and relationships?


Angie would tell you to consider this:

“...Do it both from a values perspective, what's important to you? What's important to your culture? But then where are your risks? You know, where could you actually get yourself into trouble?”

2. What are the practical steps to take in that area?


The practical steps to improving sustainability will also depend on the problem. You might need a change in an internal policy or practice. This step is typically a legal step, but it won't necessarily need a lawyer. For example, you might do your own policy writing if it's an internal policy.


3. How are you measuring your progress?


Step two is legal but doesn't necessarily need a lawyer. This third step, however, will almost certainly require one. Any form of measurement will require some internal reporting which may become external. Having a lawyer vet the report is crucial to avoid misrepresentation whenever you report externally.


Interested in Angie’s work? Check out Impact Business Law. You can also book a free consultation or visit Goodlawyer website for more info on their services. You can reach out to Angie on LinkedIn.


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