Shared value is a marketing term that refers to the practice of creating economic value in a way that also produces value for society by addressing its needs and challenges. This approach encourages businesses to align their operations and strategies with social progress, leading to positive outcomes for both the company and the communities it serves. By integrating social issues into their core business models, companies can innovate, enhance their competitive advantage, and build stronger stakeholder relationships while contributing to societal well-being.
A company that manufactures eco-friendly packaging could collaborate with local recycling facilities to enhance their supply chain efficiency. By investing in the recycling process, they not only reduce their environmental footprint but also create jobs in the community. This shared value initiative benefits the company's brand reputation and aligns with consumer demand for sustainable practices.
Shared value is a business approach that goes beyond traditional corporate social responsibility (CSR) by integrating societal impact directly into a company's core business strategy. The concept emphasizes that businesses can achieve long-term success by addressing social issues and creating value for both their bottom line and the communities in which they operate. Instead of viewing social and environmental challenges as externalities or risks, companies practicing shared value see them as opportunities for innovation, growth, and competitive advantage. Shared value can manifest in various ways, such as improving supply chain efficiency, enhancing product quality, or developing new markets while simultaneously solving societal problems like poverty, environmental degradation, or public health issues. By aligning business success with social progress, companies can foster stronger relationships with stakeholders, including customers, employees, and local communities. For example, Nestlé's work with farmers not only helps improve agricultural productivity but also promotes environmental sustainability—creating mutual benefits for the company, farmers, and the planet. This approach strengthens the company's supply chain while contributing to global food security and environmental stewardship.