Developing an integrated shared- value creation model to drive social and environmental reporting of JSE listed companies

Abstract

Shared value is a term used to describe business strategies whose policies and practices enable a company to simultaneously create economic, social, and environmental value. Nevertheless, shared-value strategy has been criticised by other researchers as a strategy that lacks originality because its concepts have all been propounded in previous corporate social responsibility approaches. Shared-value strategy has failed to provide accepted and tested or standardised ethical and conceptual frameworks for operationalising, measuring and reporting shared value. Implementing shared value has been difficult because the collaboration processes and roles of participating parties are still vague. It is against this background that this study has embarked on evaluating the value-creation approaches adopted by JSE-listed companies with the aim of identifying weaknesses in collaboration and develop an integrated shared-value model. This study adopted a qualitative research approach, which works with non-numerical data and seeks to understand and interpret meaning from beliefs, values, practices, and shared behaviours of social groups. More specifically, the study adopted an interpretivist paradigm, which allows a researcher to view the world through the perceptions and experiences of the participants. Grounded theory design, which allows a researcher to simultaneously collect, analyse, and interpret empirical data, was adopted with the aim of developing a new model based on social constructs. This study interviewed participants face-to-face for the first time and continued to seek their opinions telephonically throughout the study period (2016-2020) and as needs arose. Integrated reports were collected yearly as soon as they were made available on the companies’ websites and media reports were collected when a phenomena related to the study was published. Integrated report samples were drawn from the Top 100 JSE-listed companies using convenience sampling. The sample comprised of 278 integrated reports; 21 interviews; and 43 media reports. Analysis of data using ATLAS.ti enabled the researcher to uncover and explain patterns and variations as the theory emerged. From the analysis, it emerged that JSE-listed companies collaborate during the planning stage but not on prioritisation and implementation stages. It also emerged that there is no economic value realised from corporate social investment and in its presence, economic value is not being identified, measured and reported. Social cost expended is magnified and reported as a line item; benefits to social and environmental stakeholders are reported but returns or benefits that accrue to the company are not identified, measured and reported. Based on these inadequacies, the study concluded that JSE-listed companies adopted practices, guidelines and frameworks that cannot identify, measure and report economic value gained from social investments. JSE-listed companies lack guidance on collaboration processes that encourage innovation over trade-offs. The study developed a linear, integrated shared-value model that can improve the measuring of shared value and collaboration. The PLOAA model (Process, Level, Outcome, Assessment and Assurance) promotes simultaneous and concurrent measurement of shared value created in relation to the level of collaboration employed. The PLOAA model promotes collaboration that results in innovative solutions to avoid trade-offs. PLOAA proposes measurement of company or social and environmental stakeholders’ behaviour to evaluate its effects on collaboration. The study further recommends future research on the development of tools that can distinctively measure and report shared value simultaneously created.