A Shared Value Approach: Businesses and Their Communities Benefit

According to the Nature Conservancy, corporations use approximately 65% of a community's water resource. Water enables them to grow and produce a myriad of products we use for everyday life. In some communities, this can create both a political and economic strain. Water can be rationed or costs increase due to corporate use, yet in the same community, the corporation provides jobs and tax revenue.

The relationship between corporate entities and their communities is complicated. One approach to bridge the divide is where companies generate economic value in a way that also produces value for the communities: creating shared value (CSV).
 

Corporations Creating Shared Value with Society

Businesses already play intricate roles in the makeup of a community, including growing economies and providing goods and services to the area. Taking that one step further in this symbiotic relationship, CSV is a strategic approach where companies generate economic value in a way that produces value for society by addressing its needs and challenges. This can be at a local level as well as a global level.

In the Harvard Business Review article “The Ecosystem of Shared Value,” Mark Kramer and Marc Pfitzer said, “[t]o advance shared value efforts, therefore, businesses must foster and participate in multisector coalitions – and for that they need a new framework.” In short, businesses must look at home and where they do business to see where to start making these changes.

 

Benefits of Corporate and Community Collaboration

There is an inherent benefit in shrinking from a corporate, global, and political framework to a local level. Facilities function in communities, and their employees and the organization are an integral part of those communities:

• Local workers come from the community.
• They shop in the community.
• Their children go to school together.
• They all use the same community resources.

So what happens when the facility leaders and decision makers adopt the CSV approach and focus on ways to benefit the profitability of the business as well as being beneficial for the community?

• We see more community engagement.
  • Facilities consider the economic as well as the sustainability impact of their business decisions, which benefits the community. Then the community supports the business by buying and promoting their products.
• We see more resource optimization and implementation of circular economy practices.
  • Practices like water reuse drive community and industry behaviors. In some cases, failing to adopt these practices can result in a competitive disadvantage.
• We see better water management programs.
  • Organizations look at their water use not only from a short-term perspective or cost per thousand gallons. They consider the long-term availability and needs for their future growth, benefiting the organization financially, creating less of a demand on the community's infrastructure, and providing careers. 
• We see additional investment in research and development as facilities improve processes and look for sustainable cost saving measures to reduce their energy, water, and waste.

These changes at a local level have a positive impact on the local community and surrounding region, improving community life, effectively managing limited resources, and providing a compelling case for new investments and community growth. In some cases, additional partners are incentivized to work with these communities and provide support and funding for their efforts.

 

Expanding CSV to the Global Stage

Around the world, businesses need partners in their day-to-day activities. An example of this would be water treatment, where the companies become partners with manufacturing facilities, looking at ways they can provide technologies, expertise, and insight to support both the facility and the local communities. This results in sustainable growth, providing competitive advantage, and increasing societal benefits.

The same can be said for global companies at a ground level. In their 2023 sustainability report, Nestle highlighted their work from Cote d’lvoire and Ghana where the business implemented an income accelerator program to close the living income gap of 30,000 cocoa-farming families, both improving the farmers lives as well as stabilizing their supply chain.

Nowadays, many companies will share external and internal sustainability reports, which showcase what they are doing in their own business and how they are helping customers decrease water and energy consumption and reduce waste. If businesses showcase what changes they are making, then it can help other businesses and communities make better and more sustainable decisions.

As an example, Kurita has posted in their sustainability report about what their involvement in lowering their environmental impact and their customers’ environmental impact: