While I was getting my bachelor’s degree in international development studies, there was one thread that seemed to define everything that we were taught in classes: NGOs, multilaterals, and governments have all created and implemented diverse programs and policies in an effort to achieve global development, but many haven’t achieved the desired results and oftentimes have led to worse outcomes than desired. I found myself consistently wondering whom the development policy world could turn to if it seemed that the social and public sectors were not performing as well as expected. With the growing movement on public-private partnerships within the Sustainable Development Goals and the creation of the UN Global Compact, it soon became clear that the private sector would have an increasingly important role to play in the development scene.
In the words of authors Michael Porter and Mark Kramer from their “Creating Shared Value” article, “companies must take the lead in bringing business and society back together.” After reading this, one may ask them why companies would even pay attention to the impact they have on society. However, it is important to realize that the success of companies is becoming increasingly intertwined with the success and the needs of the actors in the company’s supply chain. Therefore, it is vital that companies look at the creation of shared value not only as a business strategy, but as a necessary component of their business as a whole.
About two months ago, I had the opportunity to attend the Global Development Conference at Harvard University’s Kennedy School of Government. One of the panels that I listened to hosted speakers from the private sector that discussed their relative companies’ ventures into shared value. One of the speakers on the panel was from Unilever, who is known for their shared value strategies and she described the idea that shared value and social responsibility is not merely a strategy for the company, but it is a core part of their business model. In fact, the speaker mentioned that Unilever even got rid of their corporate social responsibility department to ensure that these values were not segmented, but rather encompassed throughout the company. Some shared value initiatives that Unilever implements include emphasizing responsible sourcing for smallholder farms, partnering with Oxfam and UNICEF, and recruiting local talent from universities in developing countries that are apart of Unilever’s supply chain to work for the company. Clearly, Unilever understands the fact that the health of the communities in developing countries that they do business with goes hand in hand with the company’s future success, thus their focus on the creation of shared value not only as a strategy but as a core business element.
In addition to the implementation of these programs and the value created for society through these initiatives, it is important to understand the impact that a company’s shared value or social responsibility initiatives may have on the reputation of the company or its potential consumers. In fact, according to The 2020 Workplace, 45 percent of a sample of 13-25 year olds would take a 15 percent pay cut to work for a company that makes a social or environmental impact. Therefore, when it comes to recruiting from a talented labor pool, the creation of shared value also speaks volumes to a company’s success and should thus not only be a strategic move, but its overall objective.