B-Corps—A Growing Form of Social Enterprise

Abstract

B-Corps are a growing group of social enterprises with a high level of commitment to maintaining a balance between profit motive and corporate social responsibility (CSR). This study has two purposes. First, it reviews the 6-year history of the rapid development of B-Corps (which currently number more than 800). Second, the study investigates the growth rate of total revenue and of employee productivity of B-Corps during a recent period and compares it with that of approximately 1,206 public companies and 3,600 non–B-Corps private firms. These measurements add to the discussion about whether socially and environmentally responsible firms generate revenue and productivity at levels similar to their competitors. The study also examines differences in the financial and productivity performance among B-Corps based on their scores on qualitative CSR performance factors. These measurements add to the discussion as to whether or not stronger CSR performance is associated with stronger financial performance and whether productivity increases in this type of firm. One finding is that B-Corps had a statistically significant revenue growth rate that outpaced the average revenue growth of the public companies that operate in the same 4-digit Standard Industrial Classification (SIC) code as B-Corps. In comparison with non–B-Corps small-to-medium size private firms, we found no significant difference in revenue growth. In those comparisons, B-Corps did not outperform both their public and private competitors with regard to employee productivity growth rate. There was no significant correlation within the sample of B-Corps with regard to revenue and productivity increases and B-Corps’ performance on qualitative CSR factors.