What is shared value? Everything you need to know

October 4, 2023
5 min read
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In today’s dynamic business landscape, staying ahead means more than just maximizing profits; it's about forging a lasting impact. Companies are constantly exploring new avenues to create sustainable growth and make a positive impact on society.  One powerful concept that has gained significant traction in recent years is the idea of shared value. Shared value, the strategic alliance between profit-making and social responsibility, has emerged as a transformative approach that transcends traditional business strategies. But what exactly is shared value, and how does it work?

In this blog post, we will explore everything you need to know about shared value, and its importance, explore its practical applications,  unveil why it's become the go-to approach for cutting-edge businesses, and how businesses can integrate this innovative approach into their strategies.

Defining Shared Value

At its core, shared value is a  business strategy that marries profit-making with social responsibility. It is a business strategy that goes beyond traditional corporate social responsibility (CSR). It challenges the age-old notion that businesses exist solely to make money and that societal needs and corporate profits are conflicting goals.  It focuses on creating economic value for a company while simultaneously addressing social and environmental challenges. Essentially, shared value envisions a world where companies actively identify and address social problems, finding innovative solutions that benefit both their bottom line and society at large. Shared value is not charity; it's about creating sustainable, long-term solutions that empower communities and drive business success simultaneously.

Key Principles of Shared Value

1. Reconceiving Products and Markets 

Imagine a world where every product solves a real societal challenge. Shared value encourages businesses to step into this realm of innovation.  Companies can identify new markets and design products or services that meet societal needs. It challenges companies to reevaluate their products and services, asking questions like, "How can we make our offerings more accessible to underserved communities?" and "What societal problems can our products help solve?" By addressing these questions head-on, businesses can transform their products into tools for positive change, making innovation synonymous with social impact and creating value for both companies and the community.

2. Redefining Productivity in the Value Chain

Sustainability isn't just a buzzword; it's the cornerstone of shared value. Businesses can enhance their competitiveness by improving the efficiency and sustainability of their supply chains. In ensuring shared value, businesses are challenged to scrutinize their entire value chain, from production to distribution, and identify areas for improvement. Can energy be conserved? Can waste be minimized? Shared value demands action, urging companies to adopt eco-friendly practices that not only benefit the planet but also optimize costs. It's a win-win situation where environmental conservation and financial prudence go hand in hand, creating a greener, more efficient business ecosystem.

3. Enabling Local Cluster Development

In the tapestry of shared value, local communities aren't just stakeholders; they are partners in progress. Shared value initiatives empower businesses to invest in local infrastructure, education, and skills development. In fostering stronger local clusters, companies create a skilled workforce, boost entrepreneurship, and enhance overall community well-being. It's about more than just corporate social responsibility; it's about building thriving, self-sufficient communities that fuel business growth. Shared value champions have the belief that by investing in local communities, businesses can secure their own future while uplifting the lives of those around them.

4. Cultivating Collaborative Partnerships

Shared value thrives on collaboration. It challenges businesses to forge partnerships with NGOs, governmental agencies, and local organizations. These collaborations amplify the impact of shared value initiatives, leveraging collective expertise and resources to tackle larger societal challenges. In the realm of shared value, partnerships aren't just alliances. It's about recognizing that together, we are stronger, and together, we can create a world where businesses are not just economic entities but engines of positive transformation.

Why Shared Value Matters: The Triple Bottom Line

1. Economic Prosperity

Shared value isn't just a feel-good concept; it's a proven catalyst for economic growth. By investing in local communities, businesses stimulate economic activities, create jobs, and foster entrepreneurship, leading to vibrant, thriving economies. Additionally, companies that actively contribute to solving social problems are viewed more favorably by customers, investors, and employees. Shared value initiatives can enhance corporate reputation, brand loyalty, and in turn, promote economic growth.  The concept of shared value in the business world drives innovation and opens up new revenue streams, leading to sustainable business growth.

2. Social Impact

Shared value initiatives tackle pressing societal issues such as poverty, education, and healthcare. When businesses actively engage with these challenges, they become agents of positive change, enhancing the quality of life for millions of people around the world. 

3. Environmental Sustainability

In the face of climate change and environmental degradation, businesses play a crucial role in sustainable development. Shared value encourages eco-friendly practices, resource conservation, and the development of green technologies, ensuring a healthier planet for future generations. For example, companies like Patagonia and Interface have reduced their carbon footprint significantly by adopting sustainable practices, leading the way in environmentally responsible business operations.

Inspiring Shared Value Initiatives

1. Nestlé

 This global powerhouse didn't just stop at producing food and beverages; it transformed entire communities. The company created shared value by working closely with local farmers to improve agricultural practices. By collaborating with local farmers, Nestlé improved agricultural practices, enhanced livelihoods, and secured a stable supply chain – a win-win situation for both the company and the farmers. .

2. IBM

 IBM's Smarter Cities initiative is a testament to the power of shared value. It leverages technology to tackle urban challenges,  making cities more efficient and livable. From traffic management to energy conservation, IBM's innovations are reshaping the urban landscape. By addressing these issues, IBM creates value for cities and enhances its market presence.

3. Unilever

Unilever's Sustainable Living Plan goes beyond the ordinary. By developing sustainable products,  reducing their environmental footprint, and promoting responsible consumption, Unilever has aligned its business goals with societal needs. Through initiatives like water conservation and waste reduction, Unilever is setting new industry standards. 

In the past decade, Unilever's sustainable living brands have grown 69% faster than the rest of the business, indicating a growing market demand for socially responsible products.

How to Embrace Shared Value: Your Role in the Movement

1. Education and Awareness

Knowledge is the first step toward change. Educate yourself and others about shared value, its principles, and its impact. The more people know, the more businesses will feel pressured to adopt responsible practices. Additionally, as a business,  identify social or environmental challenges closely related to your core business activities and provide solutions through your products and services.

2. Consumer Choices

As consumers, you wield immense power. Support businesses that actively engage in shared value initiatives. Your choices send a clear message – you demand ethical, responsible business practices. 

3. Advocacy and Collaboration

Raise your voice! Engage with businesses, policymakers, and communities. Advocate for shared value strategies and collaborations that create positive change. By working together, we can amplify the impact of shared value initiatives. As a business, engage with various stakeholders, including customers, suppliers, local communities, and NGOs, to develop effective shared value initiatives. The United Nations Global Compact encourages businesses to collaborate with NGOs, governments, and other companies to address global challenges collectively.

4. Integrate Shared Value into Corporate Culture and Measure Impact 

Foster a corporate culture that values social impact and innovation. Encourage employees to contribute ideas and actively participate in shared value initiatives. Also, implement robust measurement and evaluation systems to assess the social and business impact of shared value initiatives. This data can help guide your future strategies and investments.


In conclusion, shared value isn't just a theory; it's a transformative approach that's reshaping the business landscape to enable businesses to create lasting social impact while driving economic value. It challenges businesses to think beyond profits, encouraging them to become agents of positive change. By embracing this concept, companies can contribute meaningfully to society, enhance their reputation, and ensure long-term, sustainable growth. As the business world continues to evolve, shared value represents a beacon of hope, showing that profitability and social responsibility can go hand in hand, creating a better future for all.

As consumers and advocates, you have the power to accelerate this transformation. Let's champion shared value, support responsible businesses, and pave the way for a future where profit meets purpose, and everyone benefits. Together, we can unlock the full potential of shared value and create a brighter, more sustainable tomorrow.

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