The present of active and inactive B corps

Abstract

Purpose – The purpose of this paper is to analyze the current state of certified and decertified B Corps in order to have a better understanding of why firms decide to abandon the B Corp certificate as well as to reveal decertification trends. Design/ Methodology/Approach – The research is based on secondary data published by B Lab itself. Basic statistical methods such as t-tests and linear regressions were used to have a better overview of the state of active and inactive B Corps. Findings – The findings show that there is a general decrease in the decertification rates of B Corps. However, the U.S. accounts for the highest decertification rates, while the United Kingdom accounts for the lowest. Most of the B Corps are rather small in size and larger B Corps are less likely to decertify. Research Limitations – The main limitation of this paper is the restricted access to the B Lab data. In the publicly available dataset, information regarding reasons of decertification are not mentioned and thus conclusions are based on literature review and intuition. Practical Implications – From the results, B Lab can identify some of it its weaknesses in some regions, size categories and sectors. B Lab must focus on improving their assessment test in order to decrease the decertification rates. While B Lab should also work closely with the government to achieve the best possible outcomes. Social Implications – From the results, consumers will have a better overview of the current B Corp state which will decrease the information asymmetry and improve the decision-making process. Originality – To the author's knowledge, this is the first paper that examines the relationship between B Corp certification counts and the GDP of a country.