Embarking on the journey towards B Corp Certification offers your company a powerful tool to strengthen your business.
In today’s dynamic business landscape, gaining a competitive edge requires more than just financial prowess. The rise of social and environmental awareness has reshaped consumer preferences and organizational values, making a strong case for businesses to actively address societal issues. This shift has given rise to the B Corp movement, a network of forward-thinking organizations committed to making a positive impact.
While the B Corp movement primarily seeks to serve stakeholders, such as people and the planet, and not to develop a better model for profit maximization, it is essential for companies to remain financially viable as for-profit entities. We have thus examined how pursuing B Corp Certification can provide your company with a powerful tool to enhance your business.
Gaining a Competitive Advantage
With 80% of global consumers recognizing the importance of businesses addressing societal issues (Edelman Trust Barometer, 2016) and 86% of employees believing it is important that their own employer is responsible to society and the environment (Ipsos MORI, 2020), the B Corp certification serves as a catalyst, transforming your social mission into a driving force for success.
Indeed, the increasing recognition of social and environmental issues has emerged as a crucial element in the decision-making processes of both individuals and organizations. The certification helps cultivating strong partnerships with stakeholders who appreciate and share your mission’s values. Additionally, it serves as a potent tool for attracting and retaining a workforce motivated by a collective sense of purpose.
Improving Efficiency
The rigorous process of obtaining B Corp certification not only provides a reliable indicator of sustainability but also prompts internal changes that align social missions with profit objectives. The B Impact Assessment (BIA) also assists companies in decision-making processes and planning systems, with 74% of B Corps having a formal business plan, compared to only 41% of SMEs (B Lab UK, 2021).
Moreover, studies suggest that B Corp certification positively influences turnover, especially in the medium term, demonstrating increased customer loyalty, enhanced reputation, and organizational alignment that may take some time to materialize. In fact, the average turnover growth for B Corp SMEs is 26%, compared to 5% for all SMEs (B Lab UK, 2021).
Managing Business Risk
With robust systems for tracking business performance, B Corps outperform broader SMEs in commitment to holistic business practices, reducing exposure to risks associated with their operations. In fact, 84% of B Corps SMEs state they have establish processes to track business performance, compared to 52% of broader SMEs (B Lab UK, 2021).
Alongside, implementing measures to prevent harm to stakeholders (such as pollution prevention practices and health and safety programs for employees) enables companies to broaden their perspective, gaining access to new information and heightened awareness of the risks associated with their operations. This enhanced understanding empowers companies to proactively manage and reduce these risks, thereby cultivating a more sustainable and resilient business model.
In a 2023 study, B Lab assessed the business resilience of B Corps and other companies (the sample consisted of similar businesses) during the Covid-19 pandemic. The findings indicated that, among the companies active in 2020, 95.6% of B Corps remained operational in 2023, surpassing the 87.8% retention rate observed among ordinary companies.
Growing Business and Brand
There is a growing body of evidence indicating that sustainability performance positively influences a company’s financial outcomes. This impact is attributed to improvements in the company’s image, reputation, and human capital, leading to increased customer attraction and a competitive edge. B Corp certification is considered a valuable asset due to the clear and reliable communication it provides, serving as proof of a company’s sustainability performance.
On average, 82% of B Corps demonstrated positive annual revenue growth from 2019 to 2021, surpassing the 57.5% observed among regular businesses. Additionally, B Corps exhibited an average revenue growth of 24 percentage points during the same period (B Lab, 2023).
Enhancing Access to Capital
The transparency and stakeholder engagement facilitated by B Corp certification reduce information asymmetry and agency costs, thereby alleviating capital constraints and attracting investors. In a survey conducted by B Lab UK in November 2021, it was found that 70% of B Corps pursuing equity finance successfully secured the full amount or exceeded their funding requirements, outperforming the 56% seen in the broader SME population.
As per the 2023 ESG survey by BNP Paribas, 51% of investors confirm that their organizations actively integrate ESG expertise and data into portfolio management and investment decisions. Additionally, 54% of respondents indicate their intent to venture into impact investing within the next two years, compared to the current rate of 45%.
Talent Acquisition and Retention Advantage
Certifying your company’s commitment to social responsibility externally can boost its appeal to candidates who prioritize these values. For instance, B Corps have seen an impressive average headcount growth of 14%, a stark contrast to the 1% observed in other SMEs (B Lab UK, 2021). What’s more, B Corps are 1.62 times more likely than traditional businesses to have significantly expanded their workforce by over 25%.
Moreover, employees in companies with strong CSR practices often report increased job satisfaction, motivation, and commitment. It’s noteworthy that B Corps maintain an average staff attrition median rate of 8% in the past year, marking a considerable improvement compared to the broader business population’s 16 to 20% range (B Lab UK, 2021).
At BetterBusiness, we empower you to place sustainability at the core of your strategy, ensuring that your social mission becomes a driving force for success.
Sources :
- B Lab (2023). Financial Performance and Resilience of B Corps. https://infogram.com/1pp0pejygnln01frwrj6rywr0xtz6qg5pqq
- B Lab UK. (November 2021). Survey on the UK B Corp community.
- BNP Paribas (2023). Enquête ESG.
- Cheng, B., Ioannou, I., & Serafeim, G. (2013). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1‑
- Coelho, R., Jayantilal, S., & Ferreira, J. J. (2023). The Impact of Social Responsibility on Corporate Financial Performance : A Systematic Literature review. Corporate Social Responsibility and Environmental Management, 30(4), 1535‑1560
- Edelman Trust Barometer. (2016).
- Ipsos MORI (2020). Engaging Employees through Corporate Responsibility.
- Loor-Zambrano, H. Y., Santos-Roldán, L., & Palacios-Florencio, B. (2022). Relationship CSR and employee commitment : Mediating effects of internal motivation and trust. European Research on Management and Business Economics, 28(2), 100185.
- Paelman, V., Van Cauwenberge, P., & Bauwhede, H. Vander. (2020). Effect of B corp certification on short-term growth: European evidence. Sustainability (Switzerland), 12(20)
- Paelman, V., Van Cauwenberge, P., & Bauwhede, H. V. (2021). The impact of B Corp certification on growth. Sustainability, 13(13), 7191
- Paelman, V., Van Cauwenberge, P., & Bauwhede, H. V. (2022). Mission Alignment with employees and financiers : Probing into the workings of B Corp certification. Corporate Social Responsibility and Environmental Management, 30(4), 1632‑
- Vishwanathan, P., Van Oosterhout, H., Heugens, P., Durán, P., & Van Essen, M. (2019). Strategic CSR : a concept building Meta‐Analysis. Journal of Management Studies, 57(2), 314‑
