Will 2012 be the year of 'creating shared
value?'
I've been thinking about my colleague Ben Richards'
last blog post advising our clients to let go of the word
sustainability in 2012. In the post, he argues that as terms, both
'sustainability' and 'corporate responsibility' are ineffective at
engaging mainstream audiences.
Whether too inclusive or just plain unappealing, it's
clear that businesses are still undecided on how to best package
the range of issues that sit underneath these umbrella terms in
one, catch-all phrase. And is it any wonder? Given the ever
expanding list of sustainability issues faced by companies, coupled
with the need to target multiple audiences- it's almost neigh-on
impossible to capture everything in a way that appeals to all. Or
is it?
This month marks the year anniversary of Michael Porter's
HBR
article on 'Creating shared value' (CSV), the latest piece of
terminology to emerge from the corporate sustainability space. A
year on, the concept has been embraced by business leaders and
sustainability practitioners alike and continues to grow in
popularity. So, what's the appeal and, more importantly, is it the
solution we've been looking for?
What is creating shared value?
'Creating shared value' (CSV) attempts to re-balance value
creation by highlighting the linkages between economic and social
progress. In short, the concept proposes that businesses and the
communities in which they operate are mutually dependant and that
therefore what's good for society is also good for business. A
novel concept, but does it work?
Well, as far as messaging goes, creating shared value
certainly ticks all the right boxes. Despite not being drastically
different from its counterpart terms 'sustainability' and
'corporate responsibility, CSV does a far better job at presenting
the win-win benefits of sustainability to mainstream
audiences.
For senior management, the term presents a clear business
case, whilst removing the 'do right or else' mentality of
responsibility. For non-specialists, CSV moves beyond the
discipline led-nature of sustainability, making actual outcomes
more relevant and meaningful. And for mainstream audiences (such as
consumers and communities), the notion of 'shared value' encourages
engagement and collaboration.
What's perhaps most interesting though, is evidence that
CSV works in generating buy-in and engagement. Nestlé's 'Creating shared
value' campaign has drastically boosted the firm's profile in
the corporate sustainability space over a very short space of time.
Evidence of engagement around the campaign has also been prominent,
with Nestlé's dedicated CSV
Facebook page generating almost 13,000 likes from
customers.
The new sustainability?
Although CSV does a great job at bridging the language
barrier that prevents mainstream audiences from engaging in
sustainability, there are bigger issues when delving into the
theory.
Firstly, the term isn't as encompassing as sustainability
in terms of the breadth and depth of issues it covers. By focusing
solely on the business case for value creation, CSV leaves
potential for businesses to overlook traditional moral values if
they fail to serve a specific business function. This could be a
dangerous and slippery slope, particularly if fundamental issues
such as diversity and human rights are overlooked.
What's more, CSV calls on business to make the distinction
between which activities do or don't have the ability to add
societal value. But this leaves room for misinterpretation. The
aviation industry, for instance, may be seen as adding fiscal and
social value by facilitating international trade and creating jobs,
however the industry is also a significant contributor to global
emissions and can tear apart local communities. So does the
industry add societal value or take it away? CSV doesn't yet
provide us with a succinct answer that allows us to distinguish
between these trade-offs.
Ultimately though, creating shared value is certainly a
more engaging way of talking about sustainability. By making the
objectives and outcomes clear to mainstream audiences, CSV creates
a clear and easy-to-understand case for sustainability that
previous terminology fails to capture. For this reason it's
certainly a step in the right direction, but not quite the all
encompassing solution we've been looking for just yet.