Michael Porter advocates for a shift from CSR to Creating Shared Value (CSV). He believes that current CSR work is primarily philanthropy and about compliance with the rules. He states that
“It’s not getting us there. It’s well meaning, it’s well intentioned, but ultimately it doesn’t have enough impact. It’s not focused on results, it’s not scalable, it’s not sustainable and therefore we actually have to see if we can move beyond that formulation of business’s role. In a sense that’s given business an easy role, it’s a cop out.”
I would like to examine this a little closer utilizing one of the companies he cites as creating shared value; Nestle. One of the projects Nestle advocates as creating shared value for the company and the local population is a recent capacity addition to a cereal production plant in Ghana. According to Local Sourcing and Environmental Improvements – Ghana
“A CHF 36.2 million investment in our Cerelac infant cereal production plant in Tema, Ghana, will double its production capacity and foster rural development by sourcing more locally produced rice, wheat, flour and sugar from local Ghanaian suppliers.”
If the claim by Nestle of sourcing more local rice, wheat, flour, and sugar from Ghanaian suppliers is examined some major inconsistencies appear. According to a 1998 report on The Derived Demand for Imported Wheat in Ghana over 90 percent of wheat is imported from the US and states:
“Although there is some local production, domestically produced wheat accounts for less than a tenth of a percent of total available supply.”
Consider rice, according to Rice and Politics in Ghana over 70% of rice is imported into Ghana and major improvements are required to change this. The article acknowledges that there is a significant quality gap between domestic and imported rice.
Consider sugar and the same is true. Ghana to have new sugar factory discusses a new 100 million dollar sugar processing plant that will be built by Cargill and the main raw material, raw sugar in syrup form, will be imported and not produced locally.
I am aware that this is the analysis of only one project and others may be different but it begs the question of how Nestle views this as creating shared value. According to Porter CSV is different than CSR but this seems like the same old greenwashing to me. I believe that the real issue is not whether it is called CSR or CSV or something else; it is the attitude of the company. What do you think?