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The world is largely a capitalistic society, which means that private businesses, corporations, and individuals own capital goods - and the ones that can afford more have more. Capitalism is excellent at creating jobs and allows people to build wealth, but it often overlooks sustainability.

"In the case of Shared Value creation, a company integrates social and environmental impacts as a direct challenge to gain more economic value. The greatest opportunity for growth is found in discovering new markets, new needs that have yet to be met and new ways to operate as a business with a better understanding of the impact on the environment and community." - Kanishka Ghosh, Bangkok Post

In a supply chain, Shared Value can be found within the products, clients, and suppliers that make up the entire supply chain. It also resides within the institutions and companies that help the company's supply chain function properly. In other words, Shared Value can be found in every piece of the supply chain puzzle.

How can Shared Value be Created in Supply Chains?

Michael Porter describes three ways in which Shared Value can be created in supply chains:

1. By reconceiving products and markets or creating more access to products and services that meet the needs of our current society. This will create new opportunities for revenue.
2. By enhancing productivity in the value chain or optimising supply chains from end to end so they are more efficient and less risky. This should be done while also addressing a social issue, like pollution, water shortages, etc.
3. By implementing new frameworks to improve operations throughout the supply chain and address social problems.

Shared Value benefits both the corporation and the everyday person walking down the street. When there are multi-billion-dollar corporations that exist, it can be difficult to ask small business owners, college students, and the rest of the world's population to "do their part" to conserve resources. Especially when there are stats that say corporations use up about 20%-40% of the earth's freshwater resources.

When the world benefits from a corporation's efforts to conserve resources and give back to their communities, the corporation will benefit from having a great reputation, which will drive sales and potentially open them up to new markets. When that happens, they have even more opportunity to make a larger difference in the world.

In short, Shared Value is important because conserving resources and fighting for social justice should be a shared responsibility. When people see their favorite corporations doing their part, perhaps they will be more likely to make an effort, themselves.

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Article by Mr David Rogers - APLF Chairman [2015-2018]