Are Expectations for Businesses That ‘Do Good’ Too High? Trade-Offs between Social and Environmental Impact

Abstract

There has been increasing pressure in recent years for firms to pursue social and environmental impact alongside profits. In this paper, the question is raised of whether or not expectations of firms to ‘do good’ are too high. Drawing on organisational identity theory, the pursuit of social and environmental impact is argued to create transitive tension. An empirical analysis of 138 Certified B Corporations confirms that a focused way of ‘doing good’ is more prevalent and that social and environment impact are negatively related. Moreover, younger firms and those firms with a minority or female owner are found to be more positively associated with social, rather than environmental, impact. Implications are discussed.

Keywords:

• Social impact
• environmental impact
• organisational identity

Disclosure statement

No potential conflict of interest was reported by the author(s).