Creating shared value : measuring social impact

Abstract

The business environment is currently requiring corporations to regain the trust of the public which was lost due to the series of scandals that accompanied the 2007-2008 economic crisis. In fact, in the current business environment, which is greatly linked to these scandals, and with the emerging awareness about social and environmental concerns, corporations have come to realize that they cannot just look for mere economic profit when running their businesses and therefore the social and environmental components should exist embedded within their culture and procedures. Achieving a positive social impact, while still being able to gain economic profits, is usually accomplished through Corporate Social Responsibility (CSR). . In order to maximize both the social impact and the long-term business benefits, Michael Porter and Mark Kramer proposed the Creating Shared Value framework where companies perform their CSR either by changing their products and markets in such a way as to achieve social and environmental benefits or improving their value chain (through energy, water and waste reduction for example), as done by company 5. Another way to create shared value is done through enabling local cluster development , by investing in the community and empowering local suppliers, investors and infrastructure (Porter and Kramer, 2011). The project focuses on acquiring an understanding of the concept of CSV and the main challenges facing social impact measurement. It also aims at exploring how companies implement their CSV strategies in Lebanon with main emphasis on how they identify the social needs they address and how they measure the resulting social impact. This will be implemented through an empirical framework that analyzes the practices of four multinational corporations operating in Lebanon and two large local companies in the area of CSV. The research and analysis will be used in order to identify the challenges in implementing the CSV strategy as well as to come up with a set of recommendations.