This post is a follow-on from the earlier primer on strategic ESG integration. It shares a canvas that can be used – in-person or online – to help your strategy team get to grips with opportunities for profit-led ESG impact.
In their seminal article in HBR (2011), Porter and Kramer identify three pathways for Shared Value – or profit-led ESG impact. I remember feeling underwhelmed at the time – it was nothing beyond what many sustainability practitioners had been talking about for the better part of a decade. But those three pathways turned out to be quite a useful way of framing the discussion on profit-led ESG opportunity (see B.1 in ‘The Waves’). Not least because they mapped so nicely onto our Business Model Canvas.
Here’s how we extended the business model into a Shared Value Canvas, with the BM already depicted on the inside. Use it to help make your profit-led ESG opportunities more explicit.
Once you’ve identified the positive ESG impacts that could potentially be scaled through your business model, use the SV Canvas to:
- Explore existing (and potential new) products, services and customers that are associated with positive social or environmental impact. Link these to the revenue drivers.
- Explore current (and potential new) opportunities to increase productivity, linking them to cost drivers. Note that we are looking at productivity increases that actually support a low carbon, circular and /or inclusive economy – not those that simply make it cheaper to produce more widgets.
- Explore how you currently (or might innovate to) improve the social or natural ecosystem. Link these to key activities, resources or relationships within the delivery system.
While these may not demonstrate your capacity for radical innovation yet, they are the best place for your business to initiate strategic integration of ESG. Iterate to improve your understanding and ability to communicate these opportunity areas.
Once you agree that these are the best strategic options to start with, set about making commitments and determine how best to measure progress.