Abstract

Banks are under increasing scrutiny for their environmental and social commitments in light of the Paris Agreement and the growing emphasis on sustainability. Governments and firms alike are aligning their strategies with the Sustainable Development Goals (SDGs). Within this context, B Corp Certification has gained global recognition as a trusted indicator of corporate sustainability, assuring stakeholders through third-party validation. The strength of B Corp Certification lies in its impartial evaluation by an external body, ensuring an objective assessment of companies, including banks. This study examines the impact of the B Lab-assigned score on banks’ financial performance. Using a fixed-effects model on a sample of 53 banks from 2015 to 2020, the analysis reveals that while B Corp certification initially has a negative effect on financial performance, this impact diminishes over time. The delayed benefits of certification may be attributed to the regulatory environment of financial institutions, which already mandate extensive non-financial disclosure. B Corp certification emerges as a valuable mechanism for reinforcing stakeholder trust and ensuring compliance with Corporate Social Responsibility (CSR) standards.

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