13 DECEMBER 2023

Redefining success – driving economic and societal benefits hand-in-hand in the creation of shared value

A growing global awareness of how businesses can have an impact, both positive and negative, on a variety of environmental, social and governance (ESG) factors, has spotlighted the concept of shared value. Challenges like resource consumption, waste production, climate change, poverty, education, unemployment, corruption and governance matter to stakeholders – not just shareholders, but customers, partners, and the communities we operate in.

As corporate South Africa, we have become increasingly more accountable for the way in which we tackle these issues. Are we contributing to the problem, or are we contributing to resolving the problem? Shared value has evolved to encompass the ability of businesses to contribute economic and societal value at the same time, and it has never been more important.  

A journey, not just a goal

In contrast to corporate social responsibility (CSR), which typically involves allocating a certain amount of profit after tax to help society in some way and ESG, which is driven by regulation in response to rating agencies, shared value must be embedded within the very fabric of a business. It is executed by a company as an integral part of strategy, rather than as a side-line or an afterthought, and there is no generic formula or box to tick, because what represents shared value is highly specific to each business.

Shared value must be driven from the top down as a core element of maintaining and growing profitability – economic and societal value are intrinsic to each other and cannot be separated – and it must constantly adapt to changes in the business and the macro environment, as it is not an end goal but rather a constant journey of growth.

As businesses, we need to be intentional and up front about what we are trying to address, and leverage our unique assets to deliver scalable solutions that positively impact society as well as have positive economic outcomes. This requires a long-term view where societal benefit is the profit lever of the business, driven by purpose.

It begins with a single step

Shared value is, by its nature, a broad and generic concept. The key is to find the ways in which it can be effectively applied. RMB Ventures’ goal is to drive these ideals within our portfolio companies to incubate the mindset shift to drive the change required.

The first step is to look at ESG challenges through the lens of opportunity – what is the shared value journey of our portfolio companies’ stakeholder groups, customers, partners, and communities. What are they trying to achieve and what opportunities does this create? How can we achieve strategic societal and economic benefits throughout the value chain, and how do we work together and within our own RMB ecosystem to achieve this?

This will inevitably shape and alter strategy, as we adapt products or develop new ones and generate ideas to become more efficient while having a broader positive impact on society. This in turn aids in the creation of the circular economy of mutual benefit, growing businesses, creating jobs and increasing economic participation.

Think differently

Effectively engaging in shared value requires new ways of thinking that may seem to be at odds with past business logic. We need to build supportive industry clusters, and work with other companies rather than in competition to understand the bigger picture and address social challenges.

The reality is that if you uplift your community and make it more productive this creates more value, not only for the people in the communities, but for your business as well. We need to think differently to unearth opportunities and understand the impact of our actions and what we can do differently.

We need to open the conversation at board level and infiltrate this from the top to become part of corporate DNA, to always be conscious of both the societal and economic impact of our actions. This can prove challenging, as societal impact is more difficult to measure than profit, which is why it is critical to be intentional from the start and put the right metrics in place to measure accountability and achievement.

There are many shapes and forms that shared value can take. At RMB, for example, we have worked with other corporates and government as a collective to put backup power solutions in place in the Sandton CBD to ensure the traffic lights can function during load shedding. This benefits society in general as it contributes to ensuring the free flow of traffic rather than the frequent gridlocks that were occurring, and also benefits us as a business because it means our employees can get to work on time and be more efficient and productive.

We all have a part to play in making a positive impact and committing to solving global challenges. The key is to find the levers and imbed this as part of core business strategy to drive sustainable change.