What Does it Take to Make Creating Shared Value Work?

Originally posted on The Economist Intelligence Unit

Creating Shared Value (CSV) is fast following Corporate Social Responsibility (CSR) into businesses’ ‘must have’ credentials. To fulfil its potential, it demands a relevant combination of the private sector’s needs, together with the ones of the communities it operates in, strong partnerships and a long-term view.

In short, shared value is about relationships between organisations and people. By its nature, it dictates that organisations cannot work in isolation – it implies that multiple parties are involved, and that everyone sees the positive benefits of it. Essentially, it is contingent upon two-way, inclusive relationships in order to deliver success.

Creating Shared Value (or ‘CSV’) has been gathering popularity since it was first coined in 2011, much like its “predecessor” CSR in the 1960s, and which today is institutionalised in the business ethos of companies. CSV, however, positions social prosperity and economic success not as mutually exclusive, but mutually dependent. The competitiveness of a company and the welfare of the communities it operates in can be realised by embedding CSV into the core strategy of any organisation.

Businesses have a collective responsibility to create shared value wherever they can, and it is there the biggest opportunities lie. In order to make it work and be beneficial for all, the CSV approach has to be more than a simple, causal relationship between supplier and buyer. Instead, the CSV approach needs to stabilise and bring sustainable benefits to communities, companies, and customers. Unsurprisingly, relationships are central to all three aspects.

Private sector aims and public goals must align

The main goal of CSV is to benefit greater society. Growing economies, marketplaces and communities are in the mutual long-term interest of all. And in particular, working in unstable, underdeveloped regions is a clear indication by businesses that they are committed to nurturing new economic opportunities for local communities. The private sector can develop and refine on-the-ground, market-based solutions to help meet some of the challenges faced in such local communities globally.

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Contributor

Jean-Marc Duvoisin

CEO, Nestlé Nespresso