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Shared Value Partnerships
The document discusses the concept of 'shared value' as a paradigm that links corporate success to societal improvement, emphasizing that businesses can create economic value by addressing social issues. It distinguishes shared value from traditional corporate philanthropy and social responsibility by highlighting its focus on new business opportunities derived from social problems. Examples showcase how companies like Arauco and Yara successfully integrate shared value into their operations to enhance both community welfare and their profitability.
Shared Value Partnerships
- 1. TRENDS IN DEVELOPMENT SharedValue and Public-Private Partnerships in Development - Jess Pattison | Shared Value Project - Janosh Biczok |Centre for Humanitarian Leadership - James Goodman | AidWatch @TheDevCircle #SharedValue @sharedvalueaust @centrehl @AID_WATCH
- 2. 2 sharedvalue.org Shared ValueRecap Shared value is not social responsibility, philanthropy, or sustainability, but a new way to achieve economic success Michael E. Porter and Mark R. Kramer, “Creating Shared Value,” Harvard Business Review, January-February 2011
- 3. 3 sharedvalue.org Harvard BusinessReview, December 2002 Winner of the 2006 McKinsey Award Winner of the 2011 McKinsey Award Corporate Philanthropy Corporate Social Responsibility Shared Value Recap Evolution of Thinking + Select FSG Publications • Measuring Shared Value • Creating Shared Value: A How To Guide • Competing by Saving Lives • Shared Value in Education • Banking on Shared Value • Extracting with Purpose • Shared Value in Chile • Shared Value in Emerging Markets • Creating Shared Value in India Creating Shared Value Harvard Business Review, January 2012
- 4. 4 sharedvalue.org Shared ValueRecap Linkage Between Societal and Corporate Success Long-term competitiveness of companies Essential role of business in solving social problems Past efforts have emphasized the friction between business and society, instead of the synergy
- 5. 5 sharedvalue.org Business Opportunities & Challenges SharedValue 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 • Compliance with local regulations Social Needs Corporate Assets and Expertise Shared Value Recap Definition of Shared Value
- 6. 6 sharedvalue.org Corporations Governments Nonprofits Foundations Shared ValueRecap The Potential Scale of Shared Value
- 7. 7 sharedvalue.org Shared ValueRecap Corporate Social Engagement Portfolio “Giving back” Business must fulfill community obligations Corporate Philanthropy Shared Value “Finding business opportunities in social problems” Social problems can be solved by businesses to increase profits or strengthen differentiation “Minimizing harm to society and the company” Business should be responsible Corporate Social Responsibility
- 8. 1 • Meeting societalneeds through products • Addressing unserved or underserved customers Reconceiving Needs, Products, and Customers 3 • Improving the available skills, supplier base, and supporting institutions in the communities where a company operates to boost productivity, innovation, and growth Enabling Local Cluster Development Three Levels of Shared Value 2 • Changing practices in the value chain to drive productivity through better utilsing resource, employees, and business partners Redefining Productivity in the Value Chain
- 9. Examples • Arauco usesbyproducts from its production to generate additional power • The significant forest residue that is generated through core business of forestry, enables electricity to be generated through biomass • The power generation lowers the cost of waste disposal and makes Arauco self-sustainable in its power balance • Excess power generation is sold to the local market and supplies 500,000 residents in the area
- 10. Examples • Yara, aNorwegian fertilizer company identified that its products could significantly improve the yield for small-holder farmers in Mozambique and Tanzania however due to poor roads and local infrastructure, distribution was challenging. • Formed a collective impact initiative with funding from a US aid program enabling a cross-sector partnership to build roads to improve infrastructure for farmers • More than 200,000 farmers in Mozambique alone are expected to benefit and at the same time increase revenue for Yara.