An increasing number of major Australian companies are adopting shared value strategies, according to a project aimed to encourage businesses to adopt practices that boost competitiveness while at the same time creating benefits for the wider community.
In its first survey, the Shared Value Project has found that 19 Australian companies out of the 163 surveyed confirmed they were pursuing a shared value strategy or had done so in the past.
The report found that with the shared value concept still in its infancy in Australia, companies that pursue it, like GPT, “need to continue to share their experiences and communicate with each other so we can embed the approach in more companies and optimise its potential impact”.
It found the three key area of focus that companies were pursuing a shared value strategy were:
• Improving the local business environment through building the capabilities of suppliers and civil institutions, or working to redesign the regulatory framework to enable trade while improving conditions.
• Working to address social (including environmental) issues in order to reduce costs and increase productivity in their value chain.
• Reconceiving products and services to either meet a societal need (at a profit) or address an underserved or unserved market.
GPT was one of six case studies to feature in the Shared Value Project report which was launched this morning by the project’s chairman Peter Yates in Sydney.
“The shared value approach is one that offers strategic benefits including, in some cases we have observed, specific competitive advantages,’’ said Mr Yates.
The report highlighted some of the shared value initiatives GPT has taken to help the communities it operates in to prosper. These included working with non-for-profits such as the Smith Family, the social enterprise STREAT, the Property Industry Foundation and developing a Reconciliation Action Plan to increase the group’s engagement with the Aboriginal and Torres Strait Islander community.
Shared value is embedded in GPT’s purpose which is “maximise the financial potential of Australian property with solutions that fulfil the aspirations of our investors, tenants and communities”.
GPT’s chief financial officer Mark Fookes said the report confirmed that shared value was starting to become part of normal business practice.
“A shared value philosophy makes perfect sense and is a key way of achieving business goals,” said Mr Fookes. “Creating healthy communities, market places, economies and companies take time to establish and thrive but the end result can be more prosperous for all.”
The shared value philosophy was articulated in a 2011 paper by the academics Michael Porter and Mark Kramer in a Harvard Business Review paper which said: “Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center.”