Creating shared value for sustainability

Karanja Minnie Scholars are unable to agree on whether it’s Corporate Social Responsibility (CSR), Corporate Volunteerism, Corporate Accountability, Citizenship or Creating Shared Value (CSV). And the list is surprisingly endless. Whatever the term may be, the root meaning remains unchanged: companies commit themselves to engage in activities geared towards the greater benefit of the society they operate in. The activities could be a one-time affair or regular activities constituting of programs running into as much as billions of US dollars. The activities reveal a human side of business where it’s not all about making money by all means possible but also about giving back to the society. I prefer the term Creating Shared Value (CSV) which I think genuinely reflects the real business in “giving back to the society”. These social corporate activities have for a long time been portrayed by companies as being done from the goodness of the hearts of company board members and managers, but we all know that there’s more to it than meets the eye. Whether it’s building a school or planting trees, there is value to be squeezed out of it to move the company a step forward. At the very least, these activities are a Public Relations stunt and it is no wonder that a lot of money is usually invested to make sure that the world about hears of it. Now the term CSV is an admission of the business value being generated by such activities. While talking about CSV we look at both sides of the coin where number one, the company will invest to improving the lives and livelihoods of its employees and others in the society and number two, the competitive advantage that the company will derive from such endeavors. Instead of shying away or trying to defend corporate social activities as purely good deeds done by good people, companies should embrace them for what they really are: assets for business transformation. By taking this perspective, the activities will be more effective in creating the right social impact and a sustainable competitive advantage for the business. One way of embracing the activities is to include them in business processes and policies. By using this approach the social activity is structured, the results more sustainable and ultimately value is created for both society and business. A corporate social activity such as the one undertaken by the Serena Hotel over the weekend to plant 2,500 mango and orange trees is a classic example of CSV in motion. The hotel stepped out to invest in the local community and intends to reap long –term benefits from the investment. If all goes well, in the next two years, Serena hotel will no longer need to incur the costs of importing mangoes and oranges and the lives and livelihoods of the residents of Kicukiro district where the trees were planted will be greatly improved. The value generated from this socially good deed is plainly shared by both parties. Compare that to if the hotel had taken a one-time approach of putting on a show and giving money to women cooperatives (a universally accepted good social deed) for an undefined project that would never be followed up. In spite of how much money would have been given to the women and the amount of publicity the act would have got, people always forget and soon it would have been a thing of the past that would require a lot of effort and money to bring back to people’s memory when need be. On the other hand, the men and women of kicukiro distrct who are now included in the business process will never be forgotten as long as they are supplying Serena with mangoes and oranges. Creating Shared Value if adopted as a business strategy has the potential to contribute to sustainable economic development for a country. The private sector is a key contributor to economic development and much more can be achieved if private companies can commit themselves to respond to social needs in the more structured way envisaged by CSV. Corporate social activities should be viewed not as a separate part of business but as part and parcel of doing business. CSV forces companies to critically consider the projects they get involved in in the light of the value they generate for beneficiaries and the company. The writer is a social commentator based in Kigali. Email:Njerri@gmail.com

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Creating shared value for sustainability