How do B Corps compare with other businesses?
It’s a question we get asked a lot around here at Grow Good.
But what people really want to know is, do B Corps make more money that ‘business as usual’ companies?
The answer is, overall, that’s a big YES. Numerous studies have shown that B Corps financially outperform their ordinary business counterparts.
Many studies have been done on this now and data from recent years shows that, overall, B Corps see higher revenue growth than their non-B Corp ‘business as usual’ peers.
A new paper by the Insights team at B Lab, summarises the vast data on revenue and headcount growth from the B Impact Assessment (BIA); a comparative international study of economic survival during the COVID-19 pandemic; and a literature review, delivering important findings. The report is called ‘Financial Performance and Resilience of B Corps’ and it asks: ‘how do B Corps compare to other businesses?’
To answer that question, B Lab analysed three sources: data on revenue and headcount growth from the BIA; a comparative international study of economic survival during the COVID-19 pandemic; and a literature review.
- Higher Revenue Growth: B Corps globally were more likely to increase revenue.
- Between the years 2019 and 2020, 79% of B Corps experienced an increase in revenue, while 54% of Ordinary Businesses demonstrated a revenue increase.
- Between the years 2020 and 2021, those numbers were 85% and 61% respectfully.
- Overall, B Corps’ revenue increased by 25 percentage points between 2019 and 2020 and 23 percentage points between 2020 and 2021.
- Better Economic Survival: B Corps are more likely to survive tough times.
- From 2019 to Sept 2023, 95.6% of B Corps sampled were still active businesses, while only 87.8% of Ordinary Businesses in the sample were still active.
- The difference between these two groups is 7.8%, with a p value of .0016; the result is significant at p < .01.
- Higher Rates of Hiring: B Corps are more likely to hire new workers.
- Across the world, B Corps are 1.62 times more likely to have increased their worker base by more than 25% over the last 12 months in comparison to ordinary businesses (40.1% of B Corps have).
In addition to B Lab’s own studies, several independent studies have found promising results in terms of the impact of B Corp Certification on revenue growth rate, as well as sales growth. Paelman and colleagues (2021) note: “Our dataset allows us to study how the effects of B Corp certification [sic] evolve over time, which was previously untested. Our study documents a positive effect of B Corp certification on turnover growth and also that this effect increases with the time since certification, implying that certification requires some time for its full effect to become apparent.”
It’s not necessarily an immediate effect though. Other studies do not find short-term financial gains after certification, especially for smaller companies (possibly because of the efforts required to certify).
In summary, if you want your business to be more resilient and make more money in the longer term, become a B Corp.
Does this mean that you should become a B Corp just to make more money? Well, you can but ideally, you’d also want to be part of a movement looking to transform the global economy to one that values people and planet just as much as profit. It might therefore seem ‘not very B Corp’ to be focussing on revenue growth at all.
But here’s the crux of it. In order to be a force for good in the world, B Corps need to be viable and profitable businesses. The more profitable a business is, the greater positive impact it can have on the world because money is a powerful changemaker. It bestows choices, freedoms, influence, and power. So let’s put more of it in the hands of people working to do good in the world.
💳 Download the Financial Performance and Resilience of B Corps paper now: https://infogram.com/1tgl93rr6z7d7df4xo1q6xv8d0ip86gl6lq
Become a B Corp
Are you more convinced that B Corp is right for you? Would you like to join the B Corp companies using business as a force for good? Here at Grow Good, we exist to coach people through the process of becoming B Corp certified.
The B Corp Impact Assessment framework is free to access and provides dozens of useful insights and opportunities for any business but it can be confusing and overwhelming.
We are consultants who have completed the official training provided by B Lab, the organisation that runs the B Corp certification programme. We live, breathe and sleep B Corp. We are your friendly B Corp buddies. We make it easier. We translate the questions into plain English and give you a host of template policies and example documents so you don’t have to start everything from scratch or reinvent the wheel. We show you how to unlock the big point scoring areas most relevant to your business.
Are you ready to go B Corp? It’s completely your decision but if you are, and if you think it would be helpful to have a guiding hand through the process, we’re here to help. Drop us a line or jump straight in and book a free call here.
Yours in purpose,