{"id":568,"date":"2011-11-08T14:33:13","date_gmt":"2011-11-08T04:33:13","guid":{"rendered":"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/?p=568"},"modified":"2011-11-08T14:33:13","modified_gmt":"2011-11-08T04:33:13","slug":"shared-value-business-the-case-of-stockland","status":"publish","type":"post","link":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/blog\/2011\/11\/shared-value-business-the-case-of-stockland\/","title":{"rendered":"Shared Value Business: the Case of Stockland"},"content":{"rendered":"

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Peter Shergold | CSI Blog<\/a><\/strong><\/p>\n

At the end of August I attended a forum organised and hosted by the Business Council of Australia (BCA) on \u2018The Sustainability Challenge\u2019.<\/p>\n

The invited guest was Bjorn Stigson, President of the World Business Council for Sustainability Development.\u00a0\u00a0 His presentation<\/a> was relatively downbeat, reflecting how difficult it is proving to make significant progress on global issues such as climate change in a \u2018nobody-in-charge\u2019 world.<\/p>\n

Part of the problem, as BCA\u2019s CEO Jennifer Westacott emphasised<\/a>, is that a sustainability agenda is too often portrayed as at odds with an economic growth agenda.\u00a0 \u201cIndeed\u201d, she argued, \u201cthe sustainability agenda is the natural home of business and it should never have been captured as part of some extreme political or ideological agenda.\u201d\u00a0 For business, environmental good practice remains \u201cfundamental to the social licence to operate\u201d.\u00a0 Yet the present debate on emissions reduction \u201cseeks to paint big business as the culprits\u201d rather than a partner for sustainable development.<\/p>\n

How does one overcome that perceptual categorisation?\u00a0\u00a0 How can one portray business as part of the solution rather than simply castigating it as the cause of the problem?\u00a0 Those were the implicit questions in my recent blog <\/a>on the causes of the anger that have characterised the Occupying Wall Street protests.\u00a0 One answer, I suggested, drawing heavily on the recent work of Michael Porter and Mark Kramer, was for companies to articulate their \u2018shared\u2019 economic and societal value.<\/p>\n

Perhaps it is not surprising, then, that for me the highlight of the BCA forum was the presentation<\/a> by Matthew Quinn, Managing Director of Stockland.\u00a0 He argued eloquently the business case for sustainability but in a highly distinctive manner.\u00a0 I am happy to be corrected but to my knowledge his speech represented the first time the corporate ambitions of an Australian company had been presented as \u201ccreating shared<\/em> value for all stakeholders\u201d (Matthew\u2019s emphasis).\u00a0 It was not a desultory genuflection to the latest business school semantics.\u00a0 The speech, from beginning to end, was permeated by the concept.<\/p>\n

Stockland, of course, is known for its development and management of residential, retirement living and commercial property assets.\u00a0 It builds homes, retirement villages and shopping centres.\u00a0 Profits are important.\u00a0 They fund future projects and provide a return to public investors.<\/p>\n

Stockland, as a good corporate citizen, could have continued to present its accountability in terms of separate \u2018sustainability\u2019 and\/or \u2018corporate responsibility\u2019 reports.\u00a0 What Matthew\u2019s presentation recognised, however, is that environmental and community benefits are not additional to Stockland\u2019s business model \u2013 they are central to it.<\/p>\n

Shared economic and societal value begins by understanding that what Stockland is building are not properties but communities.\u00a0 Residential development is not simply a financial transaction based on subdivisions.\u00a0 It\u2019s about creating places where people want to live.\u00a0 Social value (the provision of local schools, childcare and health, retirement and shopping facilities) and environmental value (planning for open space, parkland, water recycling and low energy houses) are not costly \u2018add-ons\u2019 to the business.\u00a0 They represent the lifestyle which is being purchased.\u00a0 Societal benefits contribute to economic return.<\/p>\n

Similarly, shopping centres can be made more valuable to the extent that they are designed and managed as community hubs.\u00a0 Commercial property, not just residential, can bring greater economic returns through the creation of societal value \u2013 making malls a pleasant and safe venue to meet and talk not just a place to park and shop.<\/p>\n

What Stockland is effectively doing is rearticulating in contemporary language the vision of its founder Ervin Graf.\u00a0 Graf, sixty years ago, argued that the purpose of his business was \u201cto not merely achieve growth and profits but to make a worthwhile contribution to the development of our cities and great country\u201d.<\/p>\n

Matthew Quinn\u2019s presentation recognised that these two goals are integrated within a single strategic enterprise.\u00a0 Profits (economic return) and community development (societal return) are the business\u2019 shared values.\u00a0 In the long-term they leverage off each other.<\/p>\n

Stockland is not defining its community activities as \u2018giving back\u2019 to society.\u00a0 Its ethos is driven by social investment not charitable endeavour.\u00a0 The initiatives are the business:\u00a0 it is the nature of the business itself, properly framed and implemented, which creates beneficial social and environmental impact.<\/p>\n

Shared value cannot be just a well-intentioned statement of faith.\u00a0 The challenge now is for Stockland to demonstrate, through robust liveability metrics, that the property developer\u2019s investment in community provides superior financial outcomes and improved shareholder returns over the long-term \u2013 higher sales, greater occupancy and faster speed to market.<\/p>\n

If so, as Mathew Quinn concluded, shared value \u201cis a win-win.\u00a0 It is a better way\u201d. \u00a0\u00a0In my next blog I\u2019ll talk about another iconic Australian company which has the potential to present its activities as \u2018shared value\u2019.\u00a0 I\u2019d be delighted to have other instances drawn to my attention.<\/p>\n

Peter Shergold <\/a>is the Macquarie Group Foundation Professor at the Centre for Social Impact (CSI) at UNSW. This blog post first appeared on the CSI Blog<\/a> 28 October 2011. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

      Peter Shergold | CSI Blog At the end of August I attended a forum organised and hosted by the Business Council of Australia (BCA) on \u2018The Sustainability Challenge\u2019. The invited guest was Bjorn Stigson, President of the World Business Council for Sustainability Development.\u00a0\u00a0 His presentation was relatively downbeat, reflecting how difficult it […]<\/p>\n","protected":false},"author":336,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12673],"tags":[12779,12778],"class_list":["post-568","post","type-post","status-publish","format-standard","hentry","category-social-impact","tag-social-impact-2","tag-stockland"],"_links":{"self":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/users\/336"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/comments?post=568"}],"version-history":[{"count":2,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/568\/revisions"}],"predecessor-version":[{"id":570,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/568\/revisions\/570"}],"wp:attachment":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/media?parent=568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/categories?post=568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/tags?post=568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}