The way to inclusive growth: ‘Create shared value’
BULACAN, Philippines – Social responsibility and profitability are complementary. The key is to innovate business models.
So how can big corporations do their part?
Nestlé Philippines CEO John Miller said the way to ensure inclusive growth is by creating shared value.
“We believe that it is in the interest of business to ensure inclusive growth,” Miller said on the 2nd day of Gawad Kalinga’s Social Business Summit on October 3.
The idea became popular when it was published in the Harvard Business Review in 2011. It is centered on the idea that the competitiveness of a company and the standard of life of the communities where the businesses operator are mutually dependent.
“Creating shared value (CSV) means making lives better for farmers and consumers,” Miller added.
Miller has been head of Nestlé in the Philippines for the past 5 years and said he understands how important it is to apply CSV here in the Philippines.
One way Nestlé does it is through coffee farming. “We can grow coffee here, but we still source from Vietnam.”
According to Nestlé, their agronomy program – or coffee growing program – helps farmers in 4 ways:
- By providing access to farming
- Conducting trials and experiments at the NEDF to discover and develop better techniques of growing coffee
- Researching which scientific tools farmers need to adapt to changing agricultural conditions.
- Planning and propagating planting materials such as coffee seeds, rooted cuttings, and ready-to-plant seedlings, which are made available to interested farmers at cost
Other ways Miller says Nestlé creates shared value is through its nutrition and wellness programs, which he says are good for employees as well as its customers. He believes the quality of Nestlé's products are directly impacted by the well-being of its employees.
Anna Meloto Wilk, CEO of Human Nature, an environmentally friendly cosmetics company, said the way her company creates shared value is by simply paying its workers fair wages. They pay their workers P750 a day in Laguna, despite minimum wage being around P300 a day.
“Most of our talent had to leave because there’s really no value for them here,” Wilk said. “We pay our research and development team what’s due them, and provide them the best equipment,” she said. “We need to invest in people. If they don’t, they’ll produce lower-quality products.”
Wilk, the daughter of GK’s founder Tony Meloto, said that she learned from her father that in order to understand the value of their workers, “You have to stay with them, eat with them, to have that long-term impact,” she added.
“Where you create a higher value for products, you increase the quality of life,” she said. – Rappler.com
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- How to #EndPoverty? Develop state universities
- In entrepreneurship, responsibility is key to sustainability
Follow Rappler's live blog of Gawad Kalinga's Social Business Summit here.