In response to the recent Harvard Business Review article on Creating Shared Value I wrote with Michael Porter, I’ve received questions about the relationship between corporate social responsibility (CSR) and creating shared value (CSV). Aren’t CSR and CSV the same thing—doing well by doing good?
We believe that CSR is a different—if overlapping—concept from creating shared value. Corporate social responsibility is widely perceived as a cost center, not a profit center. In contrast, shared value creation is about new business opportunities that create new markets, improve profitability and strengthen competitive positioning. CSR is about responsibility; CSV is about creating value.
Certainly the phrase “doing well by doing good” covers both shared value initiatives like the Chevy Volt—a new product we see as shared value—and more traditional CSR activities such as GRI reporting that responsible companies accept as a cost of doing business. But they represent very different strategic and management decisions.
It’s true we wrote about CSR in Strategy and Society, although we deliberately avoided using that term in the title because even in 2006 we knew that we were trying to describe something different—we used the phrase “shared value” but it seemed too new, at that time, to replace the well-accepted terminology of CSR, and we are always reluctant to create new jargon.
The fact is we see management behavior regarding the social impact of business changing dramatically at many leading global companies. Whether called a “new form of CSR” or “shared value” it is fundamentally different than the CSR activities of 5 or 10 years ago.