Make money and do good is the new corporate buzz
Admitting you are making money by doing some good in the world is no longer a dirty little secret, it's called creating shared value -- the new catch phrase in corporate and philanthropic circles.
More than 70 chief executives met in New York on Monday, International Corporate Philanthropy Day, for a Committee Encouraging Corporate Philanthropy conference, where one of the key topics discussed was creating shared value.
As the U.S. economy slowly recovers from the worst economic downturn in decades, corporate philanthropy is no longer just about writing a check for charity as executives look to use their core business to do social good.
Once you understand the impact you can have ... then you are on mission, then it becomes spiritual, it becomes part of the DNA of the company, said Bill Green, chairman of Accenture, who spoke at the conference about maximizing profit and improving society.
Shelly Lazarus, chairwoman of Ogilvy & Mather Worldwide, said that many of the business leaders agreed that being a good corporate citizen had to be at the center of a company.
There was almost an acceptance from the start that the days of check writing philanthropy were over, she said. Doing the right thing ... actually drives revenue.
Green, Lazarus and Doug Conant, chief executive of Campbell Soup Company, said shared value was essential to attract talent as it had emerged as a priority among younger generations.
The corporate world is built to respond to the environment and the environment clearly needs the corporate world to play a greater role in having impact on society, Conant said.
The growing trend has been dubbed creating shared value by Michael Porter of the Institute for Strategy and Competitiveness at Harvard Business School, who said companies need to reconnect business success with social progress.
We need to understand that what's good for the community is actually good for business, said Porter, who spoke to business leaders about the idea at the World Economic Forum in Davos last month.
MAKE MONEY, DO GOOD
If we can organize ourselves to do this stuff inside our operating units rather than on the side we can have a profound effect on many of the most important social issues of our time, he said.
Porter said Swiss food company Nestle had helped poor coffee farmers produce higher yields and quality, increasing their income, reducing their environmental impact and boosting Nestle's reliable supply of good coffee.
Robert Harrison, chief executive of former U.S. President Bill Clinton's Clinton Global Initiative (CGI), said more and more companies are building into their DNA doing social or environmental good.
The idea of making money and at the same time achieving some social good or environmental good, I would say, is the accepted ideal or the goal for many corporations, he said.
Harrison said an example of this was a CGI commitment made by Wal-Mart Stores Inc to work with its tens of thousands of suppliers to reduce packaging, saving the company billions of dollars and cutting its carbon footprint.
The Clinton Global Initiative, which has brought together chief executives, world leaders and humanitarians annually since 2005 to address global woes, hopes to further encourage U.S. companies to create shared value with a summit in Chicago on June 29 and 30 to address the fragile U.S. recovery.
Corporations made up 4 percent of U.S. giving in 2009, while individuals accounted for 75 percent, giving $227 billion, according to a Giving USA Foundation report researched by The Center on Philanthropy at Indiana University.
Charitable contributions by corporations were valued at $14.1 billion in 2009, the report said. Two-thirds was cash and in-kind contributions from company budgets and the rest grants by corporate foundations.
(Editing by John Whitesides)
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