The business case for responsible corporate approaches has been debated for decades, but the evidence has grown significantly stronger in recent years. A systematic review of 53 academic studies on the relationship between CSR and financial performance, spanning 1984 to 2021, found that responsible business practices are positively associated with financial outcomes across a range of industries and geographies (Coelho, Jayantilal and Ferreira, 2023). The relationship is not simple or universal; context, sector and implementation quality all matter, but the weight of evidence challenges the assumption that responsibility is a cost rather than a creator of value.
One of the most influential frameworks for understanding how responsible approaches create societal value is Porter and Kramer’s (2011) concept of Creating Shared Value (CSV). Published in the Harvard Business Review, the CSV framework argues that the old model of corporate responsibility that treats social and environmental concerns as constraints on profitability rests on a false premise. Businesses do not operate in isolation from society: they depend on healthy communities, educated workforces, stable ecosystems, and functioning infrastructure. When these deteriorate, business performance deteriorates with them. Shared value, Porter and Kramer argue, is created when organisations identify and act on the overlaps between business opportunity and social need.
Porter and Kramer identify three distinct ways of creating shared value. The first is reconceiving products and markets: developing products or services that meet social needs or serve underserved populations, creating new sources of revenue while addressing genuine societal challenges. The second is redefining productivity in the value chain: recognising that energy use, resource efficiency, employee wellbeing, and supply chain conditions are not just ethical concerns but drivers of operational performance. The third is building supportive local clusters: investing in the communities, institutions and supplier networks that the business depends on, improving productivity and resilience for both the business and the surrounding ecosystem (Porter and Kramer, 2011).
A 2024 study published in Tandfonline examined how CSR activities influence internal organisational processes to create value, finding that responsible practices strengthen cross-functional collaboration, improve employee engagement and enhance innovation capacity (Tandfonline, 2024). Similarly, Camilleri (2017) argues that CSR 2.0, a more strategic and integrated form of corporate responsibility, unlocks value precisely because it treats stakeholder demands not as constraints but as opportunities for differentiation and growth.
There are important caveats. Critics of the shared value framework, including Crane et al. (2014), argue that it can be used to justify selective corporate engagement with social issues rather than genuine transformation. An organisation that creates shared value in one area of its business while continuing to cause harm in another has not fundamentally changed its relationship with society; it has improved its story. Carroll’s (1991) pyramid of corporate social responsibility provides a useful complement: it argues that organisations have economic, legal, ethical, and philanthropic responsibilities, and that all four must be addressed, not traded off against one another.
For CR&S practitioners, the practical implication is clear. Building the case for responsible corporate approaches requires evidence. This means identifying the specific mechanisms through which responsible practice creates value in your organisation’s context: whether through operational efficiency, reduced regulatory risk, stronger employee retention, enhanced brand trust, or new market opportunity. It also means being honest about where current practice falls short and what the cost of inaction is likely to be. Societal value is not a by-product of good business; it is something that must be actively designed, measured, and reported. Organisations that treat it as such are better positioned to attract investment, retain talent, and build stakeholder relationships that sustain long-term performance.
Action Point
Think about one area of your organisation’s activity where responsible corporate approaches are already creating societal value for employees, communities, suppliers or the environment. Now think about one area where that value is not yet being created but could be. Reflect on what is preventing it and what the opportunity cost of inaction might be. Share your thinking with your skills coach.