Profit with a purpose: how the B Corporation certification influences the relationship between social and financial performance in European B Corps

Abstract

The economic and corporate world has always been characterized by the pursuit of profit as the primary objective for the satisfaction of shareholders' interests. However, a line of thought that places the interests of stakeholders and society in general at the center, initially widely criticized, has gained more and more consensus over time, leading today to a radical change in the way of seeing and doing business. The ever-increasing attention of consumers to social and environmental issues has thus led companies to adapt the way they operate. The role that companies have today is not simply to generate benefits for shareholders, but to contribute directly to social welfare. For this reason, hybrid business models have emerged, which put on the same level of importance and combine the achievement of financial and non-financial objectives. An example of hybrid companies are B Corporations, companies that have obtained the B Lab certification, which guarantees compliance with particular social standards. Given the increasing popularity of this type of organization, this research aims to analyze the extent to which the B Corp status affects the financial performance of a company. In particular, the pre- and post-certification financial performance of European B Corporations will be compared in order to examine the relationship between social and financial performance within them.