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VALUE OF CORPORATE SOCIAL RESPONSIBILITY
How Corporate Social Value© helps assessing the true value of the business
Corporate Social Value© is the answer to building a sustainable business, which creates shareholder value in perpetuity. Companies have little understanding of Corporate Social Value© beyond its reputational impact and the “vote with your feet” effect on consumers.
Two years ago there was some research into how Corporate Social Value© may translate into financial value, however, this had not encompassed all of the facets of the value of Corporate Social Responsibility programmes and had not accounted for the totality of effects of CSR.
Corporate Social Value© includes valuation of economic value of CSR projects, i.e. the value they create in the local and national economies. This is usually much higher compared to the value invested in CSR programmes.
CSR of any company also includes socially responsible business practices and activities, which often create even higher value to the economy and society, and, of course, first and foremost to the company itself. Corporate Social Value© helps to articulate the value of new more sustainable products and uses financial valuation techniques in order to arrive at their value to the business.
Consider the recent news about Anglo American’s coal mining business Thungela, which was announced as worthless by Boatman Capital because of the high clean-up costs. Corporate Social Value© assessment could have uncovered such assets because it would have considered how each business product is sustainable over the long-term and what its real value is notwithstanding what businesses may think of it just because they own something. Corporate Social Value© can help businesses to understand the value of all of their products, R&D, supply chains, through the lens of CSR and arrive at their true value taking into account the best knowledge in valuation techniques.
Corporate Social Value© helps businesses thrive and grow whilst responding to the regulatory, reputational, and political risks and helps developing meaningful ESG metrics.