Home' Trinidad and Tobago Guardian : May 25th 2017 Contents MAY 25 • 2017 guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG19
Pulling its weight?
It is news to no one that our country is
bearing the brunt of a maelstrom of
economic, social and environmental
(societal) challenges. A prolonged pe-
riod of structural adjustment, spiral-
ling crime rates, rampant corruption,
ubiquitous land and marine pollution, creaking
public institutions, a lack of public trust; we
have them all and then some.
No one is immune to these challenges. The
corollary of which is that each of us has an
incentive and an obligation to help solve them.
Government, businesses, NGOs and individ-
uals all have critical roles to play.
This article considers the role of business
in solving some of our greatest societal chal-
The business of
In 1970, the economist Milton Friedman fa-
mously stated: "The business of business is
. This perfectly captures his view and
that of many, that the only social responsibility
of business is "to use its resources and engage
in activities designed to increase its profits so
long as it stays within the rules of the game"
Put another way, a business' role is to gen-
erate wealth, create employment, pay taxes
and obey the law.
That being said, surely it is worth consider-
ing whether, in their efforts to generate wealth,
companies are doing their part to help solve
or exacerbating societal issues.
The role of CSR
So, what efforts do businesses make to pos-
itively address societal challenges?
Unfortunately, many companies see cor-
porate social responsibility (CSR) as purely a
public relations exercise, with little genuine
interest in solving society's problems. That be-
ing said, there are some incredible companies
out there that truly have responsibility baked
into their DNA.
Internationally, Patagonia, Unilever, Te-
sla, and IKEA are some current high profile
examples. However, these are the exception
not the rule.
Most common in T&T, is a philanthropic
approach to CSR; often with the aim of giving
back to the community. This usually involves
some combination of sponsorship, financial
contributions and in-kind donations (ie goods
or services other than cash). This is not the
place to dwell on the difference between spon-
sorship and financial contributions, suffice it to
say that they aren't the same and best practice
dictates that the former be classified as a form
of marketing, not CSR.
Several companies also encourage staff to
volunteer in support of a range of causes. Some
even have developed volunteering policies
which set aside a number of working hours
or days that staff can spend volunteering each
These may all be considered traditional CSR
activities. Many leading organisations now be-
lieve that while such approaches have a role
to play and create some positive impacts on
their beneficiaries, these impacts tend to be
narrowly focused and short-lived. Importantly,
an organisation's return on investment (ROI)
for these activities is also low.
Of course, there are reputational benefits,
strengthening of stakeholder relationships and
improvements in employee engagement, but in
reality, purely philanthropic approaches often
only scratch the surface of business and social
It is no wonder why CSR budgets are con-
stantly under threat and often among the first
to be reduced in difficult economic conditions.
CSR practitioners around the world are acute-
ly aware of the continual need to justify their
Luckily, there is another way.
Creating shared value
The concept of shared value, introduced
by Porter and Kramer in their 2011 Harvard
Business Review article, Creating Shared Val-
ue: How to reinvent capitalism---and unleash
a wave of innovation and growth is defined
as, "policies and operating practices that en-
hance 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."
Shared value has a subtle but critical differ-
ence from traditional CSR, which the World
Business Council for Sustainable Development
(WBCSD) defines as, "the continuing com-
mitment by business to behave ethically and
contribute to economic development while
improving the quality of life of the workforce
and their families as well as of the local com-
munity and society at large."
The difference is in their respective ap-
proaches to value creation. CSR initiatives de-
rive social value through a company's efforts to
do good, with business value an after-thought.
Efforts to create shared value utilise a com-
pany's core skills and resources (financial,
human, intellectual, technological, physical,
relational) to solve economic, social and envi-
ronmental challenges through better business
performance and practices.
For example, Unilever articulates its corpo-
rate vision through its global Sustainable Living
Plan (SLP), which aims to grow the business
whilst decoupling their environmental foot-
print from growth, and increasing positive
Among the SLP's many goals is an ambition
to help 1 billion people improve their sanitation
and hygiene by 2020. This is achieved through
an extensive behaviour change programme,
including Lifebuoy's handwashing scheme;
the world's largest.
By the end of 2015 they reached almost 500
million people, improving the life chances of
new-born babies and children under five, who
are particularly vulnerable to hygiene-related
life threatening illnesses. All this while boost-
ing sales of Unilever's personal hygiene, clean-
ing and water filtration products.
Examples like this show that with a bit of
imagination, social and business value creation
can be two sides of the same coin.
Some people take issue with this last point.
They argue that when it comes to CSR, compa-
nies should do the right thing without trying
to generate business value or focusing on the
Such opinions cannot simply be dismissed,
but there is evidence to suggest that companies
who view societal challenges as opportunities
to create shared value tend to be more innova-
tive, profitable and generate greater positive
social impacts than those take a more tradi-
tional approach to CSR.
A future article will look at the practical steps
you can take to create shared value in your or-
ganisation, highlight examples of best practice
and outline the lessons learned from others.
The T&T Chamber of Industry and Commerce
thanks consultant Kyle Santos, a member of
our CSR committee for his contribution of this
The private sector's role in solving societal challenges
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