Helping business toserve shareholders AND society
SIMULTANEOUSLY
CSR Value ContinuumTriple Pundit guest blog
-by Wayne Dunn
The CSR Value Continuum: From Value Distribution to Shared Value Creation
3p Contributor | Tuesday February 11th, 2014 | 1 Comment
inShare33
Click here to read more in this series
By Wayne Dunn “That is shared value not corporate social
responsibility.”
That is the reaction I received two weeks ago after
sending a note about my value-centric approach to CSR
and highlighting the economic sustainability inherent in
CSR projects that have robust value propositions that
can align the social, economic and developmental
interests of companies, communities, shareholders and
other stakeholders.
CSR is a complex, evolving and exciting area that is
finding new ways to create and distribute value.
Simultaneously, the language and frameworks around
CSR are evolving rapidly and helping executives,
practitioners and academics with practice and
understanding. We are all learning and none of us is an
“expert.” I want to share some of my thoughts on CSR, shared value and a framework that has
helped me to be more effective in this space.
The concept of shared value has been eloquently described with powerful voices that have done
well to help business and society understand what it is, to think about how to develop it and
realize the compelling value propositions that it can create. Professor Michael Porter and his
team, through their work, their writing and the gravitas they carry, have helped many to see and
think about business differently. As they wrote, shared value “generates opportunity, innovation,
and competitive advantage for corporations—while solving pressing social problems.” To my
thinking, this makes shared value an important aspect of CSR and good business strategy.
I believe that we do a disservice to business and corporate social responsibility if we place shared
value actions outside of the scope of CSR, and I don’t think this is what Professor Porter and
others intended at all.
I’ve spent a couple of decades developing, analyzing, evaluating and supporting CSR-related
projects and programs around the world and across industries and sectors. Working on more than
60 projects in that time, I’ve developed some frameworks and tools that I find very helpful to
allow me to analyze and understand specific situations and strategies. One I nearly always use is
the CSR Value Continuum. It helps to look at the various CSR programs, projects and
initiatives that a company is doing and place them on a continuum ranging from value
distribution through to value creation.
Clearly, shared value is at the value creation end of this continuum, focused on finding those
opportunities where 1+1=3; identifying value propositions that can align corporate, stakeholder,
community, environment and other interests — creating new value by making the pie larger. At
the other end of the continuum are value distribution actions. These too are important. They are
where companies share or distribute value in a voluntary and strategic manner so that
communities, stakeholders, environment and other interests receive new value,and some level of
value is created for the company through goodwill, reputational capital, social license
enhancement, etc. Notice that at both ends of the continuum the actions produce value for the
company, that there is some alignment of shareholder and stakeholder interest. If there wasn’t,
why on earth would the company do them?
The mistake that people sometimes make is to assume that those CSR projects and initiatives that
are at or closer to the value creation end are necessarily more important, that companies should
do more of these and less of other projects. The full range of CSR actions — grants, donations,
scholarships, education, training, community development, environmental restoration, local
institutional development, local infrastructure, employment and skills development, local
procurement and business development — are all important tools.They can be important for the
company and for local stakeholders.
Depending on the specifics of each one, they will situate differently on the continuum. But in
general something like grants, donations and scholarships would fit more towards the value
distribution end of the continuum, while local procurement and business development would
tend to be closer to the value creation end. The value continuum is useful in revealing to
companies how their actions fall on a distributive-to-creative scale, and this understanding can
help both strategically and tactically to optimize value return from CSR investments.
Companies and projects stand to maximize benefit by consciously thinking of their CSR projects
and activities in terms of the value continuum and have a spectrum of activities that span the
continuum. This benefit includes discovering new strategies and opportunities for creating and
capturing more value from existing activities — opportunities which risk being overlooked if
focussing only on one end of the spectrum.
CSR is a complex and evolving field. There are some great projects and great innovations
happening, and value is being created in exciting and innovative ways. I’ve found that practical
tools and frameworks like the value continuum can help companies and practitioners to enhance
their understanding of the value aspects of their CSR activities and to be more efficient at
creating and distributing value.
Wayne Dunn is a Professor of Practice in CSR at McGill University in Canada (he calls himself
an accidental academic). He has over two decades of practical experience in CSR at all levels
and all over the world. His work has been used for a Stanford Case Study and has won many
awards including the first ever private sector project to win a World Bank Development
Innovation Award. He is currently the Executive Director of the CSR Training Institute and is
developing and delivering Executive Programs around the world. He is a Stanford Business
School Sloan Fellow and lives on Vancouver Island in Canada. He can be reached at
Comment by Sebastien Mazzuri, FSG•
Dear Prof. Dunn,
Thank you for your insightful post. It is clear to me that successful social engagement from
corporations requires a portfolio of initiatives, which will be positioned at different levels along
the “CSR Value Continuum” you are describing. And I also agree that language and frameworks
are helping stakeholders with practice and understanding.
For this latter reason, one of the potential challenges I see with using a continuum is that it does
not make it easy to communicate some of the key differences between the examples of corporate
social engagement you provide. In particular, the strength of the link between social and business
value creation is very different at both ends of your spectrum. My experience and that of my
colleagues at FSG, especially with a corporate audience, is that there is value in drawing a clear
line somewhere to better spell out the characteristics of these different forms of corporate social
engagement; in particular, why companies engage, what value is being created, how and at what
cost for the business.
With shared value, it is possible to communicate information that is i) forward-looking
(companies know what social outcomes they are after), ii) directly linked to business financial
indicators (it is about increasing sales or market share or reducing costs, all of which will be
showing in the P&L), and iii) data-driven (companies have usually invested a lot in quantifying
the social opportunity as a market, and they should develop a measurement strategy to document
value creation with hard facts). This is more difficult to do in the case of product donations for
example, or compliance with a set of ESG standards. Companies are doing these for good
reasons but the link to business value creation through such factors as increased employee
engagement or brand recognition is more elusive and harder to quantify – as you implicitly point
out.
There are many frameworks that can be used to categorize these different types of initiatives, and
I am sure that the idea of a “CSR Value Continuum” resonates well with some audiences. What I
simply want to emphasize here is that I feel it is important to also go one step further and clearly
articulate, one way or another, the key differences between different forms of corporate social
engagement. This can only help executives, practitioners and academics accelerate the adoption
of these principles for the greater good.
Regards, Sebastien Mazzuri, FSG
Response by Author (Wayne Dunn)
Dear Mr. Mazzuri
Many thanks for your informative comment. My apologies for the delay in responding but I
have been active on field work and CSR projects.
You raise some interesting points and I suspect that our models and frameworks may have much
more in common than our discussion would suggest. I think I may not have communicated
clearly in my article as I certainly didn’t intend for a reader such as yourself to interpret that I
was referring to only product donations or ESG compliance. In fact, I believe that tools such as
the continuum do exactly what you explain is necessary - they help to understand and
communicate better - so please let me try to clarify this.
I agree totally on the importance of establishing metrics that are linked to corporate objectives
and in effective management of progress towards those objectives. I’ve been around this space
for a long time and recall too well the days when many firms measured their CSR in terms of
dollars spent, rather than value created. Metrics and systematic management has been a
consistent theme in my CSR field work, writings and lectures since the 1990s
I see CSR as being predominantly about value; value-distribution, value-creation, shared-value
between company and community, value over time, etc and in my work I’ve found it useful to
have a range of tools and frameworks (buckets, continuums, etc) that help to better understand
and communicate various aspects of value and optimize value-creation for the company and
other stakeholders. Relationships are also critical to realizing latent value but that is another
discussion.
I’ve long been an advocate for more systematic and quantifiable approaches to CSR strategy and
management. Beginning in the 1990s I was helping companies and communities to develop and
implement systems that would make management of CSR more efficient and easier to
communicate and manage. In 1999 I authored and delivered the first paper on CSR and
management that was ever presented at the Canadian Institute of Mining, Metalurgy and
Petroleum (CIM) http://www.slideshare.net/waynedunn/beyond-beads-n-trinkets-cim-
conference-paper-1999 . A core part of this paper illustrates my wholehearted agreement about
the importance of being able to differentiate various actions and activities. In my experience
(which stretches over 2+ decades, across all continents and includes corporate, community,
government, NGO and indigenous audiences) continuums and other related frameworks are
actually more effective at communicating differentiation than the more rigid ‘bucket’ systems. I
have found that, while bucket frameworks can undoubtedly be helpful, there can often be blurred
or confusing lines between different buckets (where does philanthropy stop and CSR begin, or
CSR stop and Shared Value begin? And why?) and that a single set of buckets can create an
artificial hierarchy that can make whole system optimization more difficult to achieve.
For example, if a company were to create a scholarship fund to train engineers, a program to
support science and math in schools, and give support for a University and college to improve
their ability to educate and train indigenous peoples from remote areas, I am sure we would
agree that this would fall into your Philanthropy bucket and be at the value distribution end of
my CSR Value Continuum. However, by applying a second framework, one that looks at the
ability of the CSR Investment to continue to produce value over time, a more nuanced and useful
perspective can emerge. Over time you have on ongoing increase in local workers who are
capable of working at professional and managerial levels, and an overall improvement in the
capacity of local and regional education to produce well-trained professional workers from the
project area. So, while the CSR spending was initially philanthropic and more about value-
distribution, over time the results seem to move down the CSR Value Continuum towards value
creation. And, unlike some CSR spending that is a pure expense in that the value created is used
up and gone in short order, this type performs more like an asset, returning value over successive
time periods. In this case the use of multiple frameworks enables proponents to communicate
more clearly how what seems like an initial philanthropic, value-distribution act can actually
produce longer term, sustainable value creation (shared-value bucket).
I’ve found that a unidimensional, hierarchical bucket type of system, or indeed almost any
framework if used by itself, could easily lead to the rejection of strategic activities such as the
example above and that a set of frameworks, that could include continuums, buckets and other
tools, can be of much more practical and strategic use. A recent short lecture that I presented has
some additional examples of the tools and frameworks
http://www.slideshare.net/waynedunn/csr-its-all-about-value and the full set as well as many
other aspects of CSR is covered in our Executive Program on CSR Strategy and Management
(http://www.csrtraininginstitute.com)
[Incidentally, the above example is taken from the development of the Saskatchewan Uranium
mining industry, one of the most successful examples of extractive sector CSR with Indigenous
peoples that I have ever seen – see http://www.slideshare.net/waynedunn/cameco-community-
relations-report-1998 for more information]
I hope I have been able to explain more clearly how the continuum is just one of a series of
frameworks and tools that we teach and use. Developed over time and based on both practical
field experience and theoretical modeling and analysis, they allow for a nuanced and practical
view of CSR and value. We’ve found that some of them apply better in one situation than
another, that some fit some companies and industries better than others but, in their totality, they
provide a useful set of tools for companies, practitioners and stakeholders and can accommodate
a multi-faceted view of value. And this helps immensely with managing and communicating
value and strategy around social engagement and CSR
Thanks again for contributing to this discussion. I agree that there are many frameworks and
tools and that some will resonate better with some audiences than with others. None of us have
all the answers and we are all learning as we work to help improve the efficiency of value
creation in the space where corporate and community interests meet.
All the very best, Wayne
What about “Shared Value”
The ‘Shared Value’ 4 bucket model
Do Nothing
Bad
Philanthropy
BetterBut not good
CSR
AlrightOK..
The Best
SharedValue
CSR Value Continuum©
• Helps to understand aggregate of project/corporate CSR activities.
• CSR includes a range of activities from Philanthropy through to synergistic value alignment (and a well-rounded and developed program would have activities along the continuum)
• Continuum of value distribution through to value creation
• Shared Value should be created on all CSR projects, not just those at far right. Level and amount of shared value/value creation changes but all are about value and shared value
Value Distribution
Value Creation
• Grants/Donations/Philanthropy
• Local organizations/governance
• Education & Healthcare
• Skills training
• Employment
• Procurement
• New products, markets, ventures
© CSR Training Institute 2013
All Good - All the way
it’s all shared value Every CSR investment and activity
should create value for the company & for one or more stakeholders.
Value Distribution
Value Creation
ValuePropositionAlignment
• Grants/Donations/Philanthropy
• Local organizations/governance
• Education & Healthcare
• Skills training
• Employment
• Procurement
• New products, markets, ventures
1 1 3
CSR Value Alignment Framework©
© CSR Training Institute 2013
Value Sustainability
•CapEx or OpEx?• Does the initial investment continue to
provide value beyond the investment timeframe
• Community Sports Event
• Local Supply Chain Development
Value Sustainability©
Current
Value
Medium Term Value
Long Term Value
• Grants/Donations/Philanthropy• Local organizations/governance• Education & Healthcare• Skills training• Employment• Procurement• New products, markets,
ventures
Does a CSR investment continue to produce value over time
Should Business ServeSHAREHOLDERS?
Should Business ServeSOCIETY?
IT SHOULD SERVE BOTH.
Wayne Dunn is President & Founder of the CSR Training Institute and Professor of Practice in CSR at McGill. He’s a Stanford Sloan Fellow with a M.Sc. in Management from Stanford Business School.
He is a veteran of 20+ years of award winning global CSR and sustainability work spanning the globe and covering many indus-
tries and sectors including extensive work with Indigenous Peoples in Canada and globally. His work has won major international awards and has been used extensively as ‘best-practice’ by industry and academia.
He’s also worked oil rigs, prospecting, diamond drilling, logging, commercial fishing, heavy equipment operator, truck driver and underwater logging, done a couple of start-ups and too many other things to mention. Wayne’s career includes big successes, and spectacular failures. He hopes he’s learned equally from both.
www.csrtraininginstitute.com
WAYNE DUNN, PRESIDENT AND FOUNDER
Helping business to serve society and shareholders, SIMULTANEOUSLY.