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Creating Shared Value

Creating shared value (CSV) is a business concept based on the premise that the competitiveness of a company and the health of the communities around it are mutually dependent. Recognising and capitalising on the connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine capitalism.  Companies can create shared value opportunities in three ways:

  • Reconceiving products and markets – Companies can meet social needs while better serving existing markets, accessing new ones, or lowering costs through innovation
  • Redefining productivity in the value chain – Companies can improve the quality, quantity, cost, and reliability of inputs and distribution while they simultaneously act as a steward for essential natural resources and drive economic and social development
  • Enabling local cluster development – Companies do not operate in isolation from their surroundings. To compete and thrive, for example, they need reliable local suppliers, a functioning infrastructure of roads and telecommunications, access to talent, and an effective and predictable legal system

Many approaches to Corporate Social Responsibility (CSR) pitch businesses against society, emphasising the costs and limitations of compliance with externally imposed social and environmental standards. CSV acknowledges trade-offs between short-term profitability and social or environmental goals, but focuses more on the opportunities for competitive advantage from building a social value proposition into corporate strategy.  Whereas CSR focuses on reputation with placing value in ‘doing good’ by societal pressure, it generates both economic and societal benefits relative to cost in real competition of maximising the profits. Instead of being pushed by external factors, CSV is internally generated and is not confined to financial budget as CSR is. With the advent of CSV and following strong worldwide advocacy for it, companies started to rethink their vision for sustainable growth.

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