Admitting you are making money by doing some good in the world is no longer a dirty little secret, it's called "creating shared value" -- the new catch phrase in corporate and philanthropic circles.
More than 90 chief executives will meet in New York on Monday, International Corporate Philanthropy Day, for the Board of Boards CEO conference, where one of the key topics to be discussed is creating shared value.
As the U.S. economy slowly recovers from the worst economic downturn in decades, corporate philanthropy is no longer just about writing a check for charity as executives look to use their core business to do social good, experts say.
The growing trend was dubbed "creating shared value" by Michael Porter of the Institute for Strategy and Competitiveness at Harvard Business School, who said companies need to reconnect business success with social progress.
"We need to understand that what's good for the community is actually good for business," said Porter, who spoke to business leaders about the idea at the World Economic Forum in Davos last month.
Robert Harrison, chief executive of former U.S. President Bill Clinton's Clinton Global Initiative (CGI), said more and more companies "are building into their DNA doing social or environmental good."
"The idea of making money and at the same time achieving some social good or environmental good, I would say, is the accepted ideal or the goal for many corporations," he said.
Harrison said an example of this was a CGI commitment made by Wal-Mart Stores Inc to work with its tens of thousands of suppliers to reduce packaging, saving the company billions of dollars and cutting its carbon footprint.
The Clinton Global Initiative, which has brought together chief executives, world leaders and humanitarians annually since 2005 to address global woes, hopes to further encourage U.S. companies to create shared value with a conference in Chicago on June 29 and 30 to address the fragile U.S. recovery.
"(It will be) very much focused on economic recovery and how to create green jobs and how to create more jobs and essentially what are some things that people can do, both commit to do and ideas to do in the future that will advance our economic recovery," Harrison said.
Cause Integration Perspective:
As Michael Porter of the Institute for Strategy and Competitiveness at Harvard so eloquently stated, we need to understand that what is good for the community is good for business. This statement has been proven both at the level of supply chain and at the level of the consumer, meaning that companies can engage to create shared value in a number of different contexts that will improve their business's success while simultaneously contributing to a better world. In fact, contribution is the name of the game, as cause marketing best practices and CSR best practices involve engaging consumers around creating real good in communities, and creating purposeful actions for consumers to follow and consider.
And sometimes it's as simple as giving the consumer a choice to make a purchase to support a product that does good. Consumers globally are clamoring to interact with companies at the level of cause, and consumers are willing to make the choice to support companies that do good (Edelman study). What's more, as cited in the above article and on this blog, Pepsi, Walmart and other companies have found the benefits at the level of the bottom line to tightening supply chains and operations around sustainability and environmental and community stewardship. This shared value, that benefits both consumer, community, and company, is the "triple C" of shared value creation, where all three parties win as a result of mature company stewardship and integration of cause into a business's ethos and core values.