“The limits of the business case for sustainability: Don’t count on ‘Creating Shared Value’ to extinguish corporate destruction”: The final version of Gaston de los Reyes & Markus Scholz has now been published:https://www.sciencedirect.com/science/article/pii/S0959652619305864.
Abstract
Creating Shared Value (CSV) is arguably the leading approach for articulating the business case for corporate sustainability. This article examines the potential of CSV to generate the transformative innovation that the cleaner production literature takes for granted as a core component of corporate sustainability in the future. The article’s major contribution is to make a systematic case for skepticism towards CSV’s capacity to deliver on the dream of transformative innovation that can crowd out and eventually eradicate ecologically destructive legacy businesses. The article’s first contribution in support of this conclusion is to show that the range of examples of CSV in the field can be categorized either as “harm-reducing” or as “giving-back” strategies. In each case, these strategies have sought to “optimize” legacy businesses by offsetting or mitigating impact that is ecologically destructive. The second contribution is to show that the logic of CSV does not question the underlying premises behind legacy businesses. To that extent, we present the case of the German automobile industry to demonstrate that high achievement in the implementation of optimizing strategies is compatible with destructive trade-offs. The third contribution is to explain the systematic failure of CSV to generate transformative innovation that can extinguish destructive businesses. We argue that, while CSV can improve sustainability performance up to a point, the features of the resource allocation process that characteristically deprive disruptive technological innovations from successful investment will also, as a rule, effectively block transformative CSV innovation. The three arguments reinforce and collectively support the thesis: Don’t Count on ‘Creating Shared Value’ to Extinguish Destructive Business.