Study Identifies Six Ways Companies Can Drive Environmental, Social Change

The Center for Social Value Creation (CSVC) at University of Maryland’s Robert H. Smith School of Business has produced an extensive report on the most effective strategies for driving environmental and social value creation (ESVC).

The report, “The State of Environmental and Social Value Creation,” sets out a framework for understanding how companies, across industries, can generate meaningful, measurable improvement in environmental and social performance.

CSVC identified six concrete ways, or “levers,” that companies can use to drive ESVC outcomes: 1) product research, development and innovation; 2) sustainable production; 3) supply chain management; 4) coalitions; 5) financial and in-kind support; and 6) talent management.

CSVC identified the most effective of these levers for each of nine industries under review: Consumer Goods and Retail, Energy, Healthcare, Technology, Financial Service, Automobile, Hospitality, Telecom and Entertainment. The report further set out three types of institutional change that enable effective use of ESVC levers: operational structure, financing, and measurement-reporting.

The study showed consumers, more than ever, demand values-based commitments to sustainability and social good from brands across every industry, as 80% of ESVC commitments are driven by increased consumer demand. These commitments appear in formal announcements and press coverage under many names: CSR, ESG, sustainability and more.

CVSC relatedly developed the term “environmental and social value creation,” or ESVC, to encompass the wide range of actions and initiatives that seek to benefit the bottom line and the broader world.

“CSVC is excited to offer this groundbreaking survey of how corporations are responding to the upsurge of consumer demand for ESVC initiatives,” says CSVC Director Nima Farshchi. “While the report is comprehensive, it marks a beginning not a conclusion. We hope to convene an ongoing conversation about how businesses can simultaneously drive financial growth and social and environmental value. In fact, the bottom line and ESVC efforts reinforce one another.”

To come closer to a working definition of ESVC in North America, the CSVC and Sattva Consulting undertook a research study between January and July 2022. The team examined ESVC initiatives of companies across the industries.

The findings were substantiated by interviews with senior sustainability-ESG executives of 13 companies and 15 industry experts, and an in-depth review of 150-plus academic and corporate reports.

“The need for ESVC initiatives is clear across industries,” says Kristin Fallon, head of global brand for GE Healthcare and CSVC Board member. “However, every company faces their own challenges and has their own unique interests. So, it’s important to deploy the ESVC strategies that best fit your business. We have a chance to move collectively into a new phase of social value creation. But companies need to know what’s possible, and what steps they can take.”

Visit the Center for Social Value Creation homepage for more information.