Creating Shared Value:Redefining the Role of Business in Society                   Mark Kramer           Founder & Managin...
FSG.ORG                 Chile Cannot Continue Its Remarkable Economic Growth                Without Corresponding Improvem...
Cisco Networking Academy: Skills Training   Business Problem and Innovation                    Social Impact              ...
FSG.ORG             Novartis Arogya Parivar: Creating New Markets in Rural India     Products                           Se...
FSG.ORG        Nestlé’s Farmer Programs: Building Incomes that Build Customers                                            ...
FSG.ORG       Shared Value is:       Policies and practices that enhance the competitiveness of a company       while simu...
FSG.ORG          Creating Shared Value Redefines the Role of Business in Society              • Business must create econo...
FSG.ORG                                     Redefining the Value Chain:                            So-Called “Externalitie...
FSG.ORG                       Companies Can Create Shared Value at Three Levels                               Reconceiving...
FSG.ORG                            Urbi: Reconceiving affordable housing in Mexico      • One of the largest housing devel...
FSG.ORG                        Dow Chemical: Omega-9 Healthy Oils                   Shared Value Profile                  ...
FSG.ORG                             The Fibria Pulp Value Chain    • Fibria in Brazil is the world’s largest manufacturer ...
FSG.ORG                              Minera Yanacocha – Latin America’s largest goldmine:                                 ...
FSG.ORG                              The Purpose of Business         • There is an opportunity to transform thinking and p...
FSG.ORG                                   How to Begin:      • Redefine the business around unsolved customer problems or ...
FSG.ORG                                         Conclusion      • Strengthening the educational system and creating new op...
Upcoming SlideShare
Loading in …5
×

"Creación de valor compartido"

981 views

Published on

Published in: Education, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
981
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
38
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

"Creación de valor compartido"

  1. 1. Creating Shared Value:Redefining the Role of Business in Society Mark Kramer Founder & Managing Director, FSG Senior Fellow, Harvard University prepared for: XI Encuentro Internacional de RSE August 30, 2011 ®Todos los derechos reservados
  2. 2. FSG.ORG Chile Cannot Continue Its Remarkable Economic Growth Without Corresponding Improvements in Social Conditions • The long-term competitiveness of companies depends on social conditions − Improving education and skills − Safe working conditions − A sense of fairness and equal opportunity − A transparent business environment • Business has an essential role to play in solving social problems − Only companies can create prosperity that funds government and civil society − Companies can create sustainable and scalable solutions to many social problems in ways that governments and NGOs cannot − Businesses can relax the constraints that limit their growth Past thinking about sustainability has focused too much on the friction between business and society rather than their interdependenceChile CSV August 29, 2011 2 © 2010 FSG
  3. 3. Cisco Networking Academy: Skills Training Business Problem and Innovation Social Impact •Over 10,000 Academies established in• Cisco’s growth is limited by the all 50 states and 165 countries number of trained network •Over 4,000,000 students have been administrators worldwide trained• As a result, Cisco established the •More than 70% have attained a new Networking Academy job, a better job, increased • Developed a distance learning responsibility, or higher salary program that combines a web- based curriculum with local Business Impact instructors and lab facilities • Partnered with industry peers, •Alleviates a key labor constraint for schools, governments and Cisco customers universities •Students become familiar with Cisco • Focused on economically products deprived regions around the •Strengthened relationships with key world suppliers, local businesses and government
  4. 4. FSG.ORG Novartis Arogya Parivar: Creating New Markets in Rural India Products Services Results & next steps  Portfolio:  Community health  Improved access to health • 79 pharmaceutical education: education and medicines for products in 12 therapeutic • ~300 health educators 42 million patients in areas • Focus on prevention, child 28,000 villages & maternal health,  Partnering with ~50 000  Affordable: symptom awareness pharmacists and clinics • Sandoz generics  Healthcare provider  Portfolio expansion in 2011: • Over-the-counter (OTC) education: vaccines, generics, medications & nutrients • Address low level of diagnostics and more • Custom small packs medical training  Will pilot in Indonesia, branded in local dialect  Supply chain management: Vietnam and Kenya (2011) • Ensure continuity of supply  Partnering to expand access in village pharmacies to health infrastructure financingChile CSV August 29, 2011 4 © 2010 FSG
  5. 5. FSG.ORG Nestlé’s Farmer Programs: Building Incomes that Build Customers • Nestlé operates 63 farmer programs across Africa, Asia, Latin America and Europe • The main commodities Nestlé sources are milk, coffee and cocoa. • Nestlé extended approximately $60 million in financial assistance to farmers in 2010. • 950 agronomists and 15,036 extension workers offered • Farmer programs combine microfinance, assistance to farmers in 2009 technical skills training, education in sustainable farming methods and improved • 144,926 farmers around the water management, and new opportunities world were trained in 2010 for women. As farmer incomes rise, they purchase more Nestle products -- creating a self-reinforcing cycleChile CSV August 29, 2011 5 © 2010 FSG
  6. 6. FSG.ORG Shared Value is: Policies and practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared Value is NOT: • Sharing the value already created • Philanthropy • Personal values • Balancing stakeholder interests Shared Value goes beyond traditional CSR: • CSR practices such as ethical behavior, transparency, sustainable use of natural resources, and fair labor conditions are essential requirements for any successful business • Shared Value adds additional opportunities to improve social and environmental conditions beyond CSRChile CSV August 29, 2011 6 © 2010 FSG
  7. 7. FSG.ORG Creating Shared Value Redefines the Role of Business in Society • Business must create economic value by creating societal value • All profit is not equal • Profit involving shared value enables society to advance more rapidly and allows companies to grow faster • The pursuit of shared value represents the next evolution of capitalism Incorporating societal issues into strategy and operations is the next major transformation in management thinkingChile CSV August 29, 2011 7 © 2010 FSG
  8. 8. FSG.ORG Redefining the Value Chain: So-Called “Externalities” Have Internal Effects Quality Education & Skills Poverty in Regulatory Company’s Environ- Communty ment Environ- Poor Company mental Infrastruc- Impact Productivity ture Energy Health and Use Nutrition Water UseChile CSV August 29, 2011 8 © 2010 FSG
  9. 9. FSG.ORG Companies Can Create Shared Value at Three Levels Reconceiving Products and Markets Redefining Productivity in the Value Chain Enabling Local Cluster DevelopmentChile CSV August 29, 2011 9 © 2010 FSG
  10. 10. FSG.ORG Urbi: Reconceiving affordable housing in Mexico • One of the largest housing developers in Mexico, Urbi focuses on developing environmentally sustainable, social housing. • Partnering with government and financial institutions, Urbi has developed subsidized housing for hundreds of thousands of low income Mexicans, traditionally have been excluded from home ownership. • Business Impact: – Utilizing innovative construction practices and linking its construction projects to enhanced social services, Urbi has created a differentiated product with enhanced attractiveness to the Mexican consumer – Urbi’s strategy has allowed it to become the most profitable company in its industry in Mexico • Social Impact: – Increasing supply of affordable housing for low income Mexicans – Strengthening social fabric by increasing access to education, recreation, business services – Protecting environmentChile CSV August 29, 2011 10 © 2010 FSG
  11. 11. FSG.ORG Dow Chemical: Omega-9 Healthy Oils Shared Value Profile • Zero Trans Fat • High in heart-healthy monounsaturated fat • Lowest saturated fat of typical cooking oils and half the saturated fat of olive oil • Since 2005 Omega-9 Oils have eliminated nearly a Billion pounds of trans fat and 250 million pounds of saturated fat from North American foods • Studies show people prefer the taste of foods fried in Omega-9 Canola Oil over common oilsChile CSV August 29, 2011 11 © 2010 FSG
  12. 12. FSG.ORG The Fibria Pulp Value Chain • Fibria in Brazil is the world’s largest manufacturer of pulp for paper • All production is based on planted eucalyptus -- No tropical native trees – A mosaic of 170,000 hectares of preserved native reserves are interspersed with 286,000 hectares of eucalyptus plantations to insure biodiversity • Advanced soil science, forestry management and state-of-the-art technologies control pollution in the mills • Small-scale farmers are permitted to grow maize, beans and manioc in areas belonging to the company to increase biodiversity • Over 4,000 households currently obtain income from eucalyptus production • 1 hectare of eucalyptus can produce the same volume of wood as 30 hectare of native forestChile CSV August 29, 2011 12 © 2010 FSG
  13. 13. FSG.ORG Minera Yanacocha – Latin America’s largest goldmine: Newmont Creating Shared Value in Peru • Newmont has invested hundreds of millions of dollars into the development of Yanacocha, the largest goldmine in Latin America • Newmont’s SME Linkages Program was created strengthen SMEs within Yanacocha’s value system, with a principal focus on transportation, maintenance, construction • The company also supported training of government officials to improve the utilization of Newmont tax revenues to strengthen the infrastructure Social Impact Business Impact • 10-15% decreased costs in • SMEs bidding for contracts maintenance, transportation, with the mine increased their and other support services sales by over 60% • Improved relations with local • Created 6,000 new jobs business and government leadersChile CSV August 29, 2011 13 © 2010 FSG
  14. 14. FSG.ORG The Purpose of Business • There is an opportunity to transform thinking and practice about the role of the corporation in society • Shared value gives rise to far broader approaches to economic value creation • Shared value thinking will drive the next wave of innovation, productivity enhancement, and economic growth • Businesses acting as businesses, not as charitable givers, are arguably the most powerful force for addressing many of the pressing issues facing our society • A transformation of business practice around shared value will give purpose to the corporation and represents our best chance to legitimize business againChile CSV August 29, 2011 14 © 2010 FSG
  15. 15. FSG.ORG How to Begin: • Redefine the business around unsolved customer problems or concerns, not traditional product definitions • Think in terms of improving lives and strengthening the competitive context, not just meeting consumer needs • Identify customer groups that have been poorly served or overlooked by the industry’s products and societal needs that would strengthen the business • Identify constraints on the business that the company has the expertise and resources to fix • Start with no preconceived ideas about product attributes, channel configuration, or the economic model of the business (e.g., small loans are unprofitable)Chile CSV August 29, 2011 15 © 2010 FSG
  16. 16. FSG.ORG Conclusion • Strengthening the educational system and creating new opportunities for economic growth in rural areas are critical to Chile – CSV offers opportunities for companies to help address these issues • The private sector can re-assert its legitimacy by developing authentic programs to simultaneously generate profit and address social challenges • Chile has the opportunity to establish itself as the leader of CSV in Latin America • Business, government and civil society must work together around shared objectives to achieve collective impact Every company, nonprofit and government agency has a role to play in creating shared valueChile CSV August 29, 2011 16 © 2010 FSG

×