Shared value is a strategy in which companies change lives in the same context where they generate a financial return. Unlike corporate social responsibility (CSR), which often operates as a separate area within the company, shared value integrates social impact or environmental generation into the business model.
This means that a company not only seeks to sell more or maximize its profits, but does so in a way that benefits the communities and everyday contexts in which it participates. Thus, profitability and positive impact are not opposing forces, but rather two sides of the same coin.
How is it different from other investments?
Many companies have social responsibility (CSR) programs in which they donate money to charitable causes or engage in philanthropy. However, this is not shared value.
| Type of investment | Goal | Example |
|---|---|---|
| Traditional investment | Maximize profits by obtaining an economic return on that investment. | Invest in shares of an oil company without worrying about ecological damage. |
| Philanthropy and donations | Contribute to solving social problems without expecting financial return. | Deliver backpacks and instruments for a school in a vulnerable community. |
| Impact investing | Generate financial return while solving social problems. | Invest in a company that sells affordable solar energy to communities without electricity. |
| Shared value | Generate financial return in a context and use part of that return to improve that same context. | A mining company that offers training programs for communities in its areas of influence. |
1. Drive sustainable growth Shared value unites financial success with social and environmental well-being, creating a cycle in which the company prospers while improving the context in which it operates. That is, virtuous circles are created between the community and the companies that participate in it.
2. Integrate the impact into the business model Unlike CSR, which usually works in isolation, shared value is incorporated into the company's core strategy, making each action contribute to economic and social benefits at the same time. The business model also becomes a community business model in a certain way.
3. Create synergies between company and community By investing in the development of the environment, the company strengthens the relationship with its communities, generating trust and opening market opportunities that benefit both parties. A good synergy reduces operational risks for the company and the risk of dealing with extractive or predatory companies for the community.
4. Improve reputation and legitimacy By committing to the development of the context in which it operates, the company gains recognition and support from customers, suppliers, investors and other interest groups, reinforcing its image and general credibility.
Why does shared value matter?
1. Drive sustainable growth Shared value unites financial success with social and environmental well-being, creating a cycle in which the company prospers while improving the context in which it operates. That is, virtuous circles are created between the community and the companies that participate in it.
2. Integrate the impact into the business model Unlike CSR, which usually works in isolation, shared value is incorporated into the company's core strategy, making each action contribute to economic and social benefits at the same time. The business model also becomes a community business model in a certain way.
3. Create synergies between company and community By investing in the development of the environment, the company strengthens the relationship with its communities, generating trust and opening market opportunities that benefit both parties. A good synergy reduces operational risks for the company and the risk of dealing with extractive or predatory companies for the community.
4. Improve reputation and legitimacy By committing to the development of the context in which it operates, the company gains recognition and support from customers, suppliers, investors and other interest groups, reinforcing its image and general credibility.