The influence of social responsibility on employee productivity and sales growth: Evidence from certified B corps
Sustainability Accounting, Management and Policy Journal
ISSN: 2040-8021
Article publication date: 5 September 2018
Issue publication date: 18 September 2018
Abstract
Purpose
The purpose of this paper is to examine whether B corps’ (for-profit entities whose owners voluntarily commit to conduct business in a socially responsible manner, beyond traditional CSR, that generates profits, but not at the expense of stakeholders) commitment to social issues influences two aspects of financial performance: employee productivity and sales growth.
Design/methodology/approach
This paper is an exploratory analysis of B corps. This paper examines B corps with B Lab’s B Impact Assessment reports and PrivCo financial data, for descriptive information. This paper also analyzes the financial impact of obtaining and reporting on excellence in both employee and consumer focus, as well as the differences in financial growth between B corps and non-hybrid peers.
Findings
Overall, results suggest that, among B corps whose treatment of employees (consumers) is recognized as an “area of excellence,” employee productivity (sales growth) is significantly higher. Additionally, sales growth is significantly higher for B corps relative to their peer, non-hybrid, matched firms.
Practical implications
Results from this study inform states considering the adoption of the B corp legal status – this legal status does not hinder firm profitability, but instead enhances long-term firm value while allowing firms to beneficially affect their communities, consumers, employees and the environment.
Social implications
Results from this study provide important insights regarding the current paradigm shift from the traditional business focus on profit maximization to a fruitful coexistence of profits with social interests and initiatives, within a structure of dissolving national boundaries and increasingly divergent logics.
Originality/value
This paper provides an initial empirical examination of B corp performance.
Keywords
Citation
Romi, A., Cook, K.A. and Dixon-Fowler, H.R. (2018), "The influence of social responsibility on employee productivity and sales growth: Evidence from certified B corps", Sustainability Accounting, Management and Policy Journal, Vol. 9 No. 4, pp. 392-421. https://doi.org/10.1108/SAMPJ-12-2016-0097
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited