Creating Shared Value

On Wednesday, a group of 65 corporate executives and social entrepreneurs came together in a private interactive session at Davos. Most social enterprises already collaborate with large companies, but now with the trend quickly shifting from traditional corporate social responsibility (CSR) to creating shared value (CSV). While CSR is often rooted in corporate giving and public relations, CSV is a much more long-term and equal partnership-oriented commitment. Corporates are realizing that the most effective and sustainable way to tap into new markets is through working with social enterprises to co-create products and services in ways that are core or fundamental to their business strategy - rather than through charity and obligation. By definition, creating shared value involves multiple stakeholders - business, government, and civil society. In addition, it means looking at our products and services more broadly - throughout the value chain and the greater ecosystem. For example, there's a difference between being a food company and being a nutrition company - beyond the marketing - it's the way we re-orient ourselves to customers, employees, and communities we reach. There's an implied responsibility in promoting health and wellness once we see ourselves as a nutrition company.

Another interesting point that was brought up is that 'shared values drive share value, not the next quarter's financial return. Getting serious about CSV means a long-term time outlook and aligning shareholders so that they commit, encourage, and support CSV and not just turning a quick profit. The regulatory environment is critical here in order to converge environmental, social, and profit goals, all of which need to be clearly and rigorously measured. The closing sentiment in the room was that the investors will catch up if industry leaders set the agenda now and lead the way through CSV.