What is Shared Value

Changing the Way Business is Done

Shared value is a concept described by Professor Michael E. Porter of Harvard Business School and Mark Kramer, co-founder and a managing director of FSG, in their 2011 seminal Harvard Business Review article, Creating Shared Value. They define shared value as “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.”

We believe shared value is the most powerful practice companies can leverage to fulfill their purpose aspirations because it uses the core business to drive societal change. It can also be one of the most authentic because it relies on core business practices and know-how. Whether it is addressing protracted social issues, such as access to medicines, employment opportunities for self-determination, or improved agricultural techniques, or if it is targeting environmental opportunities, such as new uses for recycled plastics, zero deforestation practices, or renewable energy sources, shared value practices offer companies new ways to innovate, compete, and create a business environment that is sustainable. It also allows them to do so at scale while it significantly addresses social and environmental challenges. While the roles of government and civil society are critical in addressing societal issues, their resources are dwarfed when compared to those of the private sector. If private sector resources can be more effectively leveraged to simultaneously improve societal and business needs, the impact on our social and environmental challenges and opportunities could be significant and positively change the lives of many people on this planet.

Essential Reading

  • The Ecosystem of Shared Value

    Companies must collaborate to capture the economic benefits of social progress.
  • Where ESG Fails

    Despite countless studies, there has never been conclusive evidence that socially responsible screens deliver alpha. A better model exists: shared value.
  • Creating Shared Value

    The original shared value article published in Harvard Business Review.