Creating Shared Value (CSV)
In the traditional mindset of some companies and the general public, “fulfilling social responsibility” and “gaining economic benefits” are mutually exclusive. On one hand, companies wish to demonstrate they are playing an active role in fulfilling social responsibility; while on the other hand, they are concerned that the disclosure of “no return on social investment” may negatively affect the decision-making of shareholders and other potential investors.
In fact, this is not a zero-sum relationship. In the process of business and strategic planning, an increasing number of forward-looking multinational corporations have identified and invested in areas where financial profits and social benefits could both be realized so that they can solve social problems while delivering economic profits, transferring “philanthropy” and “giving back to society” into the new mindset of “creating shared value (CSV)”. These companies have successfully blurred the boundaries between for-profit and non-profit businesses. In the wider context of sustainable development, CSV would be a new approach for companies to achieve win-win results in economic prosperity and addressing social needs in the future.
Figure: Relationship Between Shared Value, Business Opportunity, Social Needs and Corporate Capital
Companies may create shared value in three ways: