Maximise Impact: Embrace Shared Value Now
Dear CEOs and brand owners,
Those who matter most to your future business success are re-evaluating how they feel about your brand. How well do you align with their evolving values? Are you still relevant to them? Are you still worth a premium, and what does doing business with you say about them as individuals?
These questions are fundamental for businesses and CEOs globally as the sands shift beneath our collective feet. Stakeholders and consumers are reconsidering their relationships with brands. They no longer engage with those who do not share their changing priorities.
So, Why Is This and What Has Changed?
Everything. To begin with, Milton Friedman, Paul Samuelson, Robert Solow, and the rest of their ilk were wrong. The role of an organisation is not solely to maximise shareholder value and achieve growth at all costs. Unfortunately, the damage that philosophy has imposed on society and our environment is already well-established.
The idea of Stakeholder Capitalism is regaining momentum as a superior business philosophy that goes beyond the outdated “growth at any cost” mentality. Today, businesses recognise that the environment and society are critical stakeholders in the value-creation process.
Business leaders must shift their mindset to take a holistic view of their businesses’ impact on the economy, people, and the environment. We must innovate to solve problems while also providing great products and services. Brands that view themselves as part of a larger ecosystem can build equity by offering fresh and memorable experiences that improve the lives of everyone they touch, even in the smallest of ways.
The New Mindset: Shared Value Creation
It is critical that we push and challenge ourselves today in ways we have never done before. That is the opportunity in front of all of us.
We are living in a moment in time where climate-related environmental and social challenges are coming into focus at the same time globally. The realisation that our fates are all interconnected, reinforced by the global COVID crisis, has created an awareness and energy that we must not squander.
To remain relevant and stand out, leaders must weave comprehensive sustainability strategies into their businesses and do more than make a ‘Net Zero’ commitment. It is essential to uncover distinctive shared value propositions that emerge at the crossroads of urgent social and environmental concerns and their own strategic goals. By recognising these synergies, businesses can transform challenges into opportunities for innovation, cultivating shared value for all stakeholders.
This new mindset understands that to succeed, we must drive shared value by enhancing business competitiveness while meeting societal and environmental needs. This requires a clear corporate purpose that embraces sustainability and firm commitments towards regenerative practices that restore our ecosystems and address social inequalities. We need to do all of this together, and we need to do it right now.
Find the Right Partner for Your Business
A study by the Harvard Business Review revealed that businesses that adopted stakeholder-oriented practices outperformed their peers by up to 3.8%. Other studies have found that over 20% of companies realised modest or significant value gains from sustainability in the past five years. This suggests that sustainability benefits society and the environment, positively impacting financial performance.
Businesses must ensure that they create value beyond profits—for their customers, the environment, and society at large—before these customers switch to competitors who do.
These are hard questions to answer for CEOs with already so much on their minds. Those of you seeking counsel deserve advisors who understand these complexities. You need advisors who can turn these challenges into sources of opportunity and value creation.
Your future customers and employees want to be associated with enlightened brands that drive shared value for the business, society, and environment. They all share this same sense of urgency and a strong desire to be empowered to effect positive change in their personal and professional lives.
Businesses that rise to this challenge will remain relevant and resilient and thrive well into the future, creating a better world for all. Everyone will be better off for it.
At SR, we assist CEOs and their teams in building brands that drive shared value for business, society, and the environment. Let’s talk.
Shared value creation represents a fundamental shift from Milton Friedman’s outdated shareholder capitalism philosophy that prioritized maximizing shareholder returns and growth at all costs, which has imposed significant damage on society and environment. The shared value approach recognizes that businesses must create value beyond profits for customers, environment, and society at large—not as philanthropy but as core business strategy. This stakeholder capitalism framework treats environment and society as critical stakeholders in value creation, requiring businesses to enhance competitiveness while simultaneously meeting societal and environmental needs. Harvard Business Review research demonstrates that companies adopting stakeholder-oriented practices outperform peers by up to 3.8%, with over 20% of companies realizing significant value gains from sustainability integration, proving shared value delivers superior financial performance alongside positive societal impact.
Consumers and stakeholders are fundamentally reconsidering brand relationships as climate-related environmental and social challenges come into focus globally, reinforced by COVID pandemic awareness that fates are interconnected. Today’s customers, employees, investors, and communities evaluate brands based on value alignment, relevance to evolving priorities, premium worthiness, and what doing business says about them as individuals. Stakeholders no longer engage with brands that do not share their changing priorities toward sustainability, social responsibility, and purpose-driven business practices. This paradigm shift means businesses must demonstrate authentic commitment to shared value creation rather than performative sustainability initiatives, as stakeholders increasingly choose competitors who align with their environmental and social values across all engagement decisions from purchasing to employment to investment.
Viewing brands as ecosystem participants requires holistic understanding of business impact on economy, people, and environment rather than isolated profit maximization. This mindset shift means recognizing that long-term business success depends on healthy societies, thriving communities, stable environments, and equitable economic systems. Businesses operating with ecosystem perspective innovate to solve problems while delivering great products and services, building brand equity through fresh memorable experiences that improve lives of everyone they touch. This approach uncovers distinctive shared value propositions emerging at crossroads of urgent social and environmental concerns and strategic business goals, transforming challenges into opportunities for innovation. Companies embracing ecosystem thinking develop regenerative practices restoring ecosystems, address social inequalities, and cultivate competitive advantages through authentic stakeholder value creation.
Effective sustainability strategies require comprehensive approaches that weave sustainability into core business operations rather than isolated Net Zero pledges or compliance initiatives. Businesses must uncover distinctive shared value propositions by identifying synergies between urgent environmental and social challenges and their strategic capabilities, transforming sustainability from cost center to competitive differentiator and innovation driver. This requires clear corporate purpose embracing sustainability authentically, firm commitments toward regenerative practices that restore ecosystems rather than merely reducing harm, systematic integration across operations and culture, and measurable impact addressing social inequalities alongside environmental goals. Organizations seeking to remain relevant must push themselves in unprecedented ways, recognizing that comprehensive sustainability integration delivers both societal benefits and superior financial performance as stakeholder expectations evolve rapidly.
Brand and sustainability consultants help CEOs facing complex stakeholder capitalism challenges by turning these challenges into sources of opportunity and value creation rather than compliance burdens. Sedgwick Richardson assists leadership teams in building brands that drive shared value for business, society, and environment by developing integrated strategies, uncovering distinctive shared value propositions, aligning brand purpose with sustainability commitments, and creating authentic narratives resonating with future customers and employees seeking association with enlightened brands. Effective advisors understand that CEOs face unprecedented complexity balancing shareholder expectations, stakeholder demands, environmental imperatives, and social responsibilities. The right partners provide strategic clarity, implementation roadmaps, and communication frameworks enabling businesses to remain relevant, resilient, and thriving while creating positive change recognizing that brands meeting these challenges will outperform competitors as stakeholder switching accelerates.
