What do Nestlé, Adidas Group and Heinz have in common? For starters they are all successful, green, profitable companies. Looking closer one finds out that they are quite active in the CSR field, they have solid Sustainability strategies and they communicate it.
Nestle’s Corporate Responsibility strategy focuses on three goals: (1) To help people live healthier and happier lives, (2) to build up prosperous, resilient communities and to (3) conserve resources for generations to come.
Adidas’ partnership with Nobel Laureate Muhammad Yunus’s micro-finance organization, Grameen Bank helped the organization materialize a very thoughtful project: to manufacture a low-cost and low-budget shoe for the poor in Bangladesh, which they were able to afford.
Heinz’s “micronutrient campaign” aimed to battle iron-deficiency anemia and malnutrition of children in 15 developing countries. Approximately 5 million children received sachets of vitamin and mineral powders approved by UNICEF and the World Health Organization, costing only two cents a sachet.
One might say that these companies’ corporate responsibility strategies are effective, period. However, the secret lies deeper.
In 2006 researchers and business strategists Michael Porter and Mark Kramer first introduced Shared Value. Creating Shared Value (CSV) is the simultaneous creation of positive social and environmental impact and positive financial results. According to CSV, financial, societal and environmental benefits can be achieved at the same time. “Shared Value is not social responsibility, philanthropy, or sustainability, but a new way for companies to achieve economic success.” It has been adopted by a wide range of companies all over the world and in essence these companies make good use of these societal and environmental problems: they see them as opportunities to build profitable Shared Value business cases.
Basically, society faces many problems: malnutrition, water shortage, climate change, deforestation and many others. The role of business’ in all these has traditionally been perceived as negative, that companies caused great problems in their effort to make profits and made the existing problems worse.
NGOs, social organizations and the government on the other hand were perceived as the solution. Still, the resources available from these entities under no circumstances were adequate to address societal problems effectively. And here is where companies come in.
Organizations create wealth when they make profits. And in reality they make these profits when they meet needs, not by causing more social or environmental problems. Consumers nowadays more than ever raise these social issues and they demand from companies to be environmentally and socially responsible. In fact companies benefit from solving social problems: e.g. it may be expensive to host a safer working environment but healthier happier employees come to work more often. There is a trade-off among social and economic performance.
Companies that authentically and essentially prioritize these social issues in their corporate agenda meet the needs of their consumers and make more profits, therefore they Create Shared Value.
CSE’s next Global Certified Sustainability (CSR) Practitioner Program will be held in Bucharest, Romania June 21-22 and will provide all the latest updates and key concepts regarding trends and legislation on corporate sustainability, SDG’s, carbon emissions, GRI reporting guidelines, ways to measure the stakeholder engagement, case studies and best practices.