What is it about?
This study examines factors that influence firms' decision to obtain the B Corporation certification from the B Lab. Drawing from institutional isomorphism, gender socialization theory, the ethics of care and social identity theory, the authors examine the impact of geographic locality, product market competitions and owners’ demographic characteristics on a firm’s decision to be a certified B Corporation.
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Why is it important?
The number of B Corporations, as well as other for-profit social enterprises and purpose-driven businesses, has grown in the recent decade. B Corporations are for-profit companies that voluntarily meet heightened social and environmental sustainability standards, and certified by B Lab, a nonprofit organization founded in 2006. B Corporation certification is unique in that it seeks to drive positive and systematic societal changes through repurposing the existing capitalist structures and developing innovative solutions to measure the social and environmental impact of businesses. Given that the B Corporation movement did not start until 2006, important topics, such as what drives firms to become a B Corporation and what affects the social performance of certified B Corporations, have not been fully studied.
Perspectives
Firms in states that are democratic-leaning, have a lower hourly wage rate or have a greater religious population are more likely to be early adopters and leaders of the B Corporation movement than those in other states. On average, states with a higher unemployment rate and more democratic-leaning voters have more B Corporation certified firms in each year and over the years. Additionally, product market competition is positively associated with firms’ likelihood of obtaining B Corporation certification and their ESG scores.
Dr Maretno Agus Harjoto
Graziadio Business School - Pepperdine University
Read the Original
This page is a summary of: Why do companies obtain the B corporation certification?, Social Responsibility Journal, December 2018, Emerald,
DOI: 10.1108/srj-07-2018-0170.
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