Forum draws support, praise from NGOs, businessmen

MANILA, Philippines - A paradigm shift from traditional CSR (corporate social responsibility) to CSV (creating shared value) was called for by experts during the Creating Shared Value (CSV) Forum held last April 23, 2010. It was a call that earned the praise of members of the business community and non-governmental organizations that attended the event.

The event’s main speaker, Harvard University Professor and Creating Shared Value (CSV) proponent Mark Kramer, gave an eye-opening lecture that hinges on a revolutionary idea: Social programs need not be a cost of doing business; they can even be done in a way that increases a business’ profitability. According to Kramer, businesses would even spend more for programs that benefit society in such a case.

 “Traditionally, the relationship between business and society has been viewed as in opposition to one another. That is not necessarily true. In fact, you can find ways in which businesses and society can work together for their mutual benefit. The reality is, business and society are interdependent –one cannot truly thrive and succeed without the other’s help,” said Kramer.

Kramer explained that Creating Shared Value encourages corporations to transform their business philosophy so that it integrates the goal of benefiting society within their core strategies. He also added that when corporations discover that they can increase profits by benefiting society in the course of doing business, they tend to make more investments into social programs.

As an example, Kramer cited one multinational corporation (he declined to specify its identity) that will invest billions of dollars in helping small farmers plant, grow and harvest more of a certain rare plant. The plant, says Kramer, produces an oil that is essential to that company’s product.

Kramer explained further that company is willing to give the farmers all the support they need because it will benefit from the raw material produced. The small farmers, on the other hand, will benefit from increased income and improved livelihood. Kramer added that in such cases, entire communities benefit as incomes increase and standards of living improve.

Nestlé Philippines SVP and Head of Corporate Communications Edith de Leon said that Nestlé organized the event in order to share its business philosophy that has been in place since the company was founded almost 140 years ago.

“Nestlé has been creating shared value long before the term CSV was coined. It is a philosophy that informs all its business decisions. In the Philippines, for instance, Nestlé is supporting the livelihood of some 30,000 small Filipino farmers and their families.

“Mainly, this is done through the Nestlé Experimental and Demonstration Farm (NEDF) in Davao. The NEDF provides free training to farmers of the most effective practices and technologies to increase the quality and quantity of their harvests—and consequently, their incomes. That partnership, forged to ensure the quality and supply of Nescafé, has been a beneficial one for both the farmers and the company through several decades,” she says.

The CSV Forum also featured experts who discussed other urgent challenges affecting corporations and society today. In particular, the forum focused on Nutrition, Water and Rural Development. Dr. Mario Capanzana, Director of the Food and Nutrition Research Council lectured about Nutrition, while Mr. Arjun Thapan, Special Senior Adviser to the President on Infrastructure and Water of the Asian Development Bank spoke about Water. Antonio Meloto, Chairman of Gawad Kalinga, spoke about Rural Development.

Any corporation that wishes to make the leap from CSR to CSV must first decide on which social needs it is best able to address. “There are generic social issues, like workplace safety and fair labor practices, that affect all companies. Then there are social issues that distinctly fit into a company’s core business. For instance, the issue of air pollution and environmental damage will be specific to a car company that decides to sell cars that use hybrid engines,” says Kramer.

Kramer added that a company that is able to use the CSV approach in both generic issues, as well as those that are particular to its core business will be able to gain a competitive edge, while benefiting society at the same time.

From the enthusiastic applause given by the audience at the end of the CSV Forum, it can be said that the seeds for the CSV paradigm shift have been successfully planted.