How to Measure Creating Shared Value

By Kenneth Paul Charman, PhD Professor,
CamEd Business School

Creating Shared Value and Sustainability

The concept of creating shared value (CSV) was put forward by Professor Michael Porter and Mark Kramer in 2011 to identify company strategies which directly address a social need for profit through the business model rather than addressing the same social needs through redistribution of profits already made. Many companies, including large corporations have adopted CSV principles to govern and guide their business strategies. CSV represents a further progression in rethinking the role of the firm from the more narrowly defined responsibility of providing shareholder value, to the wider perspectives of addressing the impact of the firm on its stakeholders through corporate social responsibility (CSR). The principles of corporate governance are well established to oversee the activities of firms, and sustainability reporting is common today, and which now extend to frameworks and guidelines for reporting. Responsible Business Conduct (RBC), put forward by the OECD has provided a framework to incorporate due diligence to guide actions to reduce or alleviate the negative impact of a firm on its stakeholders. More recently the growth of ESG accounting has provided metrics for measurement of the impact of the firm on the economy, social factors and its environment, creating huge steps towards sustainability accounting.