What is Creating Shared Value (CSV)?

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Creating Shared Value (CSV) is about making the world a better place while allowing your company to maximize its revenues. The business concept was first introduced in Harvard Business Review by Michael Porter and Mark Kramer.

"Shared value is that companies create economic value in a way that also creates value for society by addressing its needs and challenges," says Porter and Kramer.

Business and Society

Many companies see society and economic development as two separate things. They do not understand the company's financial development affects society and that society affects the company. In recent years business has been criticized as a major cause of social, environmental, and economic problems. Trust in business has fallen to new lows.

Companies could bring business and society back together if they redefined their purpose as creating “shared value”—generating economic value in a way that also produces value for society by addressing its challenges.

“A shared value approach reconnects company success with social progress. Creating Shared Value (CSV) is about making the world a better place while allowing your company to maximize its revenues.”

Difference Between CSV and CSR

Creating shared value is a relatively new concept and is not the same as corporate social responsibility (CSR). The main difference is that CSV is all about maximizing profit and still putting business opportunities and growth in focus, whereas CSR is about looking at the business impact on the local community and environment.

Photo by Mimi Thian on Unsplash

How Do You Create Shared Value?

Creating Shared Value focuses on identifying and expanding the links between social and economic development. There are three ways for companies to create shared value:

• To re-evaluate their products and markets in a way that meets customer needs while contributing to a better society. Develop new products with a clear sustainability dimension. E.g. BodyShop and Patagonia.
  

• To redefine productivity in the value chain through social or environmental innovation. Improve terms and efficiency in the value chain. E.g. H&M and their recycling project.
  

• To contribute to the development of local clusters by supporting the prosperity of industries such as are linked to your own company. Co-create clusters with organizations that become one new market. E.g. Nestlé who is supporting local farmers.

Benefits of Creating Shared Value

There are several benefits of CSV, both that you are changing the world to a better place, you are building a stronger brand, and making your target groups proud of being associated with your business. Also, other benefits are:

• Your business becomes your marketing – people want to be a part of making the world a better place, which is why they want to be a part of your brand and support your business.
  

• Action speaks louder than words – documents like a CSR policy can be considered as a publicity stunt for attention. Meanwhile, creating shared value goes one step further and delivering services and products that are making the world a better place. This is on-going PR and brand building, rather than a one-time message.
  

• Be the change you want to see – instead of being a necessary evil, creating shared value helps your business to maximize the revenues, build your brand, and grow your audience while having a clear conscience. Your communication, service, and products will make the world a better place.

Do you want to create shared value (CSV) for your business? Let’s schedule a meeting together and plan how you can integrate the concept.