The corporate world has been changing over time, adapting to the new global scenario and consumer demand. As a result, many companies around the world are fortunately already using the concept of shared value as a central strategy for their businesses.
Profit Generation
Looking at the corporate landscape of the 1970s, the primary goal of businesses was seen as profit generation. “There is only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” (Friedman, 1970) This statement by Milton Friedman, a prominent American economist who won the Nobel Prize in Economic Sciences in 1976, exemplifies the economic scenario of that time.
Corporate Social Responsibility
Over time, the corporate world began to recognize the need to think beyond individual profit and growth. This led to the creation of Corporate Social Responsibility (CSR) to help companies become more socially responsible.
Corporate Social Responsibility was defined by the World Business Council in 1998 as the “continuing commitment of businesses to contribute to economic development while improving the quality of life of the workforce and their families, as well as the community and society at large.” This new concept helped companies develop concrete plans to become more socially responsible, including investments in social, environmental, and ethical strategies alongside their business strategies. Support for partners or other organizations also undergoing this change became part of the approach.
ISO 26000
With this new movement, ISO 26000 was created as a guide for social responsibility, aiming to assist organizations in their journey towards sustainability. This standard describes important principles to achieve such a milestone:
- 1. Accountability – citizens should always be vigilant to assess whether companies are acting correctly.
- 2. Transparency – clarity in how the company conducts its activities.
- 3. Ethical behavior.
- 4. Respecting the interests of all stakeholders.
- 5. Respecting the principles of legality.
- 6. Following international standards of behavior.
- 7. Respecting human rights.
Creating Shared Value
Certainly, this entire trajectory was of utmost importance for the evolution of sustainability and social responsibility in the corporate environment. The next step was the strategy of Creating Shared Value (CSV). The creation of this concept aims to identify and expand the connections between social and economic progress.
Creating shared value requires specific areas of focus within the business context while simultaneously addressing the interests of society (including the environment, the market, and the community) for the company’s self-interest.
Creating shared value involves incorporating sustainability and corporate social responsibility into a brand’s portfolio. A simple way to understand this concept is to consider that, with social responsibility, companies used their profits to invest in sustainable projects, help the local community, and so on. With the creation of shared value, companies work together with communities and stakeholders using sustainable and ethical strategies for the benefit of both the company and everyone around (suppliers, environment, community). This makes investing in sustainability much more advantageous and appealing to all.
