Creating Shared Value, Looking to Unilever

By Sofia-Marie Mascia

There are several ways to define a responsible business. The concept of creating shared value focuses on the connections between societal and economic progress. Instead of focusing on what a company does with capital, the shared value model focuses on how the company makes its money. The model is at the minimum compliant with all rules and regulations, but mostly identities external risks and added costs that irresponsible business practices create. Creating shared value (CSV) is a different concept from a company purely identifying social costs (i.e. societal externalities which can be positive or negative), that they believe they don’t have to bear. When a firm creates shared value, it is the choice to do business without producing negative externalities.

Unilever is an exemplary case of a company that has designed its ESG strategy around the concept of shared value. The Unilever Sustainable Living Plan asserted the company, whose products are used by 2.5 billion people per day, would double its growth by the year 2020. This growth will not be facilitated through mergers and acquisitions, but rather by changing the business model by improving health and well-being for more than 1 billion people through health and hygiene schemes, cutting down their products’ negative environmental impact by nearly a half, and enhancing the livelihoods of employees along the supply chain as the company doubles in size. With 160,000 employees, 80,000 suppliers, 2 million farmers on the supply chain, Unilever is the fastest moving consumer goods employer of choice in 44 of the 52 countries they recruit from.

If changes are implemented to grow the value of the company by improving the environmental cost of their products and production, in addition to livelihoods workers on their supply chain, the number of people whose lives could be positively influenced reaches billions through a multiplier effect. Unilever’s goals address three critical elements of creating shared value: development, the value chain, and relevant markets. One of my professors once likened the concept of creating shared value to Henry Ford reducing the price of his cars so his employees could afford them. It is this humanistic approach of highly influential, globalized businesses that could make all the difference in how capitalism affects our daily lives into 2019.