New Report Brings Shared Value to Aussie Miners
5 November 2014 at 9:11 am
The extractives sector, Australia’s leading export market, can best deliver shared value by tying business success to the prosperity of host communities and countries, new research by consultancy FSG reveals.
Extracting with Purpose, the new study published in partnership with the Shared Value Initiative, revealed leading companies were drawing on shared value by building local markets for byproducts created by extractive activity, improving local workforce capabilities, and developing local operating environments to supporting the extractives sector.
Peter Yates AM, Chair of the Shared Value Project in Australia, said the research paper is an important piece because it outlines how companies can generate profit by addressing social problems in a key Australian industry.
“Companies around the world including Rio Tinto and BHP Billiton, have identified opportunities to drive profit while simultaneously improving social conditions. The paper outlines these successes and provides further guidance on the implementation of shared value,” he said.
Mark Kramer, Co-Founder and Managing Director of FSG, said that companies such as BHP Billiton were best placed to address social problems within the communities in which they operate and were able to ensure their long term sustainability by doing so.
“The paper shows how BHP Billiton supported local suppliers in Chile to become ‘World Class Suppliers’ while improving the quality of their own inputs,” he said.
Helen Steel, Executive Director of the Shared Value Project, said that Australian companies such as the NAB and Bendigo Bank had already benefited from shared value thinking.
“We have already seen FSG release a paper on the creation of shared value in banking. Now the focus is on another key Australian industry, mining and resources,” she said.
Shared value is defined as policies and practices that enhance the competitiveness of companies while improving social and environmental conditions in the regions where they operate.
The concept originated in 2011, when authors Mark Kramer and Michael Porter published an article in the Harvard Business Review about a plan to reinvent capitalism and unleash a wave on innovation and growth.
In response to the study, Not for Profit the Shared Value Project is rolling out a program to engage local Australian extractives companies and ignite further interest in creating shared value in the Australian business community.
The Shared Value Project described the new paper as “a significant milestone for the implementation of shared value within the mining and resources industry, and Australia at large.”
“This is a culmination of over a year of in-depth research, and we are eager to collaborate with the Australian oil and gas and mining communities to drive a global conversation around the opportunity for shared value within these sectors.”
In collaboration with the University of Western Australia’s Centre for Social Impact, the organisation will host a forum of key industry stakeholders on November 10.
Find out more here.