Mission-led employee-owned firms embody a powerful model of enterprise design for a new era of environmental sustainability and social equity.
This report shares the story of this emerging model, embodied in 50-plus firms that are employee-owned B Corporations and benefit corporations, plus dozens more employee-owned firms with strong social and ecological missions. These companies include Recology, a $1.2 billion waste management company guided by its vision of “a world without waste”; well-known brands such as Eileen Fisher and King Arthur Flour; and social enterprises such as Cooperative Home Care Associates, a company that employs 2000 women of color, mostly Latina, to care for elders and people with disabilities in New York City.
These companies offer a distinct alternative to the publicly owned corporation, which was designed for an era of in which large sums of capital were needed to fuel carbon-based industrial enterprises. Now we face new challenges—catastrophic climate change and growing wealth inequality—that demand new solutions. Among those solutions are new models of ownership, or what we are calling next generation enterprise design.
As our research demonstrates, mission-driven employee-owned firms are the Best of the Best. Using data from B Lab, which assesses the social and environmental impact of B Corps, we found these firms outperform their peers on multiple measures, achieving overall “B” Scores on average 20 points higher than B Corps that are not employee owned, and 100 percent higher than ordinary businesses.
|Employee-owned B Corps||112.87||43.27||23.06|
|Non-EO B Corps||93.35||21.93||22.45|
Moreover, mission-led employee-owned firms consistently appear in vastly disproportionate numbers among B Lab’s Best for the World honorees: among the 45 US employee-owned B Corporations we identified, an impressive 37, or 82 percent, were named Best for the World in 2017 or 2018.