After publishing a similar study with the United Nations Development Programme (UNDP) recently, the World Benchmarking Alliance (WBA) published a discussion paper ‘Profit meets purpose: Exploring how responsible business conduct relates to financial performance and supply chain standards’ on 19 November 2025. The study uses WBA’s benchmarking data to assess the links between socially responsible business practices, climate commitments and regulatory requirements with financial performance.
Human Level’s Take:
- This study builds on previous work that WBA has put together with UNDP on human rights, but expands the scope to assess, more broadly, relationship of socially responsible business practices (covering human rights, decent work and ethical conduct), science-based climate commitments and regulatory influence with financial performance.
- Through statistical regression models, WBA found that over a five-year period (2019-2023), companies scoring higher on socially responsible business practices showed slightly higher stock price growth, especially evident for those that were slower to grow. They also found that each additional WBA Core Social Indicators’ point corresponded to about a 1.3% increase in revenue, as well as small but positive improvements in return on capital employed (ROCE) and return on assets (ROA).
- Similarly, companies with science-based climate targets were found to show modestly higher stock-price growth rates compared to their peers.
- The study also studied the effects of mandatory supply chain regulations and found that mandatory sustainability regulations have the strongest effect on mid-performing and mid- to large-sized companies. That is, “those that have the capability to improve supply chain accountability but still have room for improvement.” In contrast, smaller or lower-performing companies faced challenges in meeting regulatory expectations.
- Finally, the paper lists three case studies from companies in Asia Pacific for whom internal sustainability standards and commitments have driven competitiveness, investment readiness and showed measurable improvements for people and the environment across their supply chains.
- In short, rather than hurting profitability or growth, companies embedding social responsibility and committing to science-based climate action are being seen to perform better financially and in market value than their peers.
Key takeaways
- Social responsibility and climate commitments moderately fuel financial performance. Using benchmarking data from over 1,100 major companies, the WBA tested whether companies that perform better on social responsibility and had commitments to science-based climate targets also showed stronger financial results. “Social responsibility” was tracked using WBA’s Core Social Indicators (CSI), covering human rights, decent work, and ethical behaviour. Credible climate commitments were identified through the existence of validated targets under the Science-Based Targets initiative (SBTi). To track results in financial performance, they used metrics such as revenue, return on capital employed (ROCE), return on assets (ROA), and five-year stock-price data (2019–2023). Their analysis found that higher CSI scores were consistently associated with modestly better financial performance: each additional CSI score point corresponded roughly to a 1.3% increase in revenue, as well as small but positive improvements in ROCE and ROA. They also found no evidence of a downsides related to earnings per share or return on equity. Additionally, they found that over the five-year period selected, companies with strong social practices saw slightly higher stock-price growth, especially for slower-growing firms. Those with science-based climate commitments (SBTi) also tended to grow a little faster than peers.
- Mandatory due diligence and reporting especially contribute to better performance for medium to large companies with room for improvement, but smaller companies struggle. The paper finds that responsible supply chain standards – understood as companies’ policies, practices and monitoring systems promoting responsible business conduct among suppliers and business partners – are strongest among companies that already perform well on social responsibility and that operate in regions with mandatory due diligence and reporting rules. The data shows that internal practices and external regulation work together in shaping responsible supply chain standards: companies with higher social-responsibility scores are more likely to cascade these expectations through their supply chains, and to companies headquartered in jurisdictions with mandatory supply-chain regulations. For suppliers in global value chains selling to companies in these regions this is important to consider, as they need to be prepared to meet these standards to secure long-term business relationships. The study also found that mandatory supply chain regulations appear to have the strongest effect among mid-performing and mid- to large-sized companies, which they understand to be “those that have the capability to improve supply chain accountability but still have room for improvement.” In contrast, they found that smaller or lower-performing companies may face challenges in meeting regulatory expectations.
- In practice, many small and large companies committing to social and environmental goals are reaping the rewards. The paper also features three case studies developed with the World Business Council for Sustainable Development (WBCSD) and Impact Investment Exchange (IIX), drawing on examples from their member companies. They show how responsible business conduct and supportive regulatory environments translate into real-world outcomes for companies of different sizes and contexts. In particular, Aliet Green, a women-led Indonesian social enterprise, has embedded inclusion, fair trade and regenerative agriculture into its business model and improved livelihoods for more than 1,000 smallholder farmers. This has also allowed them to strengthened product quality and gain access to international markets, ultimately enabling the company to secure USD 450,000 in catalytic finance and expand to scale exports. Komodo Water, the second company, is providing clean drinking water services and solar-powered refill systems to remote Indonesian islands. By employing local women to manage refill stations, the enterprise has created economic opportunities while reducing plastic waste from bottled water – enabling it to access funding of USD 500,000 through a blended finance structure facilitated by IIX to expand its operations and strengthen growth. Finally, PETRONAS – Malaysia’s national oil and gas company, has demonstrated the capacity to mobilise suppliers for the energy transition through capability-building, sustainability-linked financing and alignment with national climate and reporting frameworks. Its Supplier Support Program reached over 1,000 SMEs and unlocked significant green financing for the transition: 1 billion (USD 230 million), directly accelerating supplier decarbonisation.
