The impact of B Corp certification on financial stability: Evidence from a multi‐country sample

Abstract

Firms are increasingly driven by social purpose. Although skeptics doubt that for-profit firms are truly committed to socially purposeful goals, firms pursuing both economic and non-economic goals are increasingly prevalent in the organizational landscape (Cao et al., 2017;Dahlin et al., 2020;Gehman et al., 2019). Related to the social purposefulness of organizations, a major signaling mechanism that has emerged in recent years is the B Lab certification-or, certification for for-profit firms with social and environmental missions Grimes et al., 2018). Although there are a variety of sister organizational forms such as social enterprises, B Corps are increasingly meeting the global standard of goals and objectives of public benefit corporations (

Conditions for mission‐led companies to humanize the economy: An Aristotelian perspective

“…Phenix and Alenvi have responsible investors who are sensitive to the environmental and social impact of their companies. Although research is emerging on this issue, our work confirms the need to objectify performance in a more holistic way by studying the different dimensions of value (Patel & Chan, 2022; Patel & Dahlin, 2022) and the specificities of the social contribution of models serving the public interest (Lashitew et al, 2022).…”

Insights into business strategies for reducing food waste in the Australian food industry

“…For example, hybrid businesses are incorporating sustainability into their business models through the B Corporation certification process (Carvalho et al, 2022). Based on a commitment to social and ecological goals (Hahn, Spieth, & Ince, 2018), Certified B Corporations attempt to align economic and non‐economic goals (Patel & Dahlin, 2021). With an ambition to shift and commitment to business sustainability, practical management seeks solutions to incorporate economic, environmental and social factors into their sustainability strategies without emphasising one over the other (Hahn et al, 2015).…”

“…Silva and Figueiredo (2020) studied responsible business practices in the supply chain, focusing on sustainable operations and understanding how small‐ and medium‐sized enterprises (SMEs) practice sustainability in their supply chain. However, the evidence is mixed on whether pursuing economic and non‐economic goals is viable in the short or long term (Parker et al, 2019; Patel & Dahlin, 2021). Despite the positive impact that creating environmental and social capital may have on stakeholders (Stubbs, 2017), hybrid business archetypes such as B Corps may experience declining financial performance and long‐term commercial instability (Patel & Dahlin, 2021).…”

“…However, the evidence is mixed on whether pursuing economic and non‐economic goals is viable in the short or long term (Parker et al, 2019; Patel & Dahlin, 2021). Despite the positive impact that creating environmental and social capital may have on stakeholders (Stubbs, 2017), hybrid business archetypes such as B Corps may experience declining financial performance and long‐term commercial instability (Patel & Dahlin, 2021). Exploiting strategic opportunities such as collaboration and innovation may leverage hybrid business models (Alberti & Varon Garrido, 2017); however, negative associations with more sustainable ways of doing business and volatility of financial performance challenge the espoused idea of reaching an equilibrium concerning non‐economic goals (Parker et al, 2019; Patel & Dahlin, 2021).…”

“…Despite the positive impact that creating environmental and social capital may have on stakeholders (Stubbs, 2017), hybrid business archetypes such as B Corps may experience declining financial performance and long‐term commercial instability (Patel & Dahlin, 2021). Exploiting strategic opportunities such as collaboration and innovation may leverage hybrid business models (Alberti & Varon Garrido, 2017); however, negative associations with more sustainable ways of doing business and volatility of financial performance challenge the espoused idea of reaching an equilibrium concerning non‐economic goals (Parker et al, 2019; Patel & Dahlin, 2021). For this reason, food businesses should consider and learn more about balancing their commercial and socio‐ecological missions without jeopardising their financial and non‐financial success.…”