Every business uses resources - water and other natural resources, packaging of various types, etc.-and they can approach these things in a different way. The second level at which companies can innovate is through their value chain. Shared-value thinking has opened up the ability to see and embrace some of these markets. Higher-income people already have financial-services firms pounding on their doors, but low-income people - who really need simple things like a chequing account - are a vastly under-served market. The biggest global market that currently exists in this industry is for low-income people in developing countries. Nobody has paid attention to these customers until recently, but the fact is, they have the same needs as the rest of us - and they represent profound opportunities for businesses to create shared value.įinancial services is a great example. Next, who is the product being sold to? In just about every industry right now, there are vast unmet needs involving low-income customers in developing countries. If a product is nutritious, for example, it can improve peoples’ health another product might improve environmental impact by minimizing the use of water or containing no ingredients that harm the environment. The first involves the product or service itself, and who it is sold to. If you think about how a particular company can address societal needs, there are three levels on which it can do that. The concept of CSV has opened up this line of thinking again, creating a whole new set of opportunities for companies in terms of strategy and product offerings.Ī shared-value initiative typically involves innovation on three levels. This is the underpinning of what capitalism is all about, but somehow it got lost along the way. In a sense, none of this is new: businesses have always attempted to meet societal needs - from creating jobs, to building housing, to producing food but ultimately, this newer sensibility says that we should think about the primary role of business as ‘meeting societal needs, at a profit’. There is no question that all of these things remain important but ultimately, the most powerful way in which any business can impact societal issues is through the business itself - through products and services that are designed to create both economic and social value. Ultimately, the most powerful way in which any business can impact societal issues is through the business itself. The idea was to be a good corporate citizen by avoiding harm, being transparent and operating sustainably. As you indicate, this began with a focus on philanthropy, and it evolved to employee volunteering and other initiatives that fall under the label of corporate social responsibility. The traditional approach has been to run your business and think about its social impact as a separate set of considerations. Please define it for us.Ĭreating Shared Value (CSV) is about the ability of a business to move beyond meeting customer needs to address fundamental societal needs through its business model. The role of business in society has evolved over time, from a philanthropic approach, to corporate-social responsibility, to a model that you pioneered: Creating Shared Value. International Centre for Pension Management.Rotman FinHub- Financial Innovation Hub in Advanced Analytics.Canadian Business & Financial History Program.BMO Financial Group Finance Research and Trading Lab.Michael Lee-Chin Family Institute for Corporate Citizenship.Sandra Rotman Centre for Health Sector Strategy.David and Sharon Johnston Centre for Corporate Governance Innovation.Organizational Behaviour & Human Resource Management.
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