Measuring shared value creation with eco-efficiency: Development of a multidimensional value framework for the dairy industry

Abstract

The concept of creating shared value was first advanced by Harvard Business School and adopted by companies to develop sustainability strategies to maximize their positive impacts on society. Eco-efficiency is a sustainability concept and a prevalent operational decision support tool that assesses the environmental performance of a system as a function of its value. This paper proposes a novel multidimensional value eco-efficiency framework based on a life cycle perspective that broadens the value dimension assessment in keeping with the concept of creating shared value. The framework is tested and implemented in a case study in the Canadian dairy industry. It uses a systemic approach to compare the eco-efficiency performance of 11 multifunctional Greek yogurt systems delivering various co-products with different functions and economic values across the value chain. It makes it possible to identify the trade-offs between the environment and various value dimensions (economic or functional) based on stakeholders' interests. The results show that the scenarios that create the most economic value for the Greek yogurt processors do not perform as well for the other stakeholders along the value chain or in terms of overall environmental performance. By developing a multi-criteria value assessment, this enhanced eco-efficiency framework brings consistency in covering the same scope of analysis between value creation and environmental impacts. More specifically it breaks with the industry's prevailing value creation philosophy and value measurement in eco-efficiency analysis, which is usually based on cost-effectiveness and profit maximization for one stakeholder at the expense of the others in the value chain. Ultimately, it contributes to align companies' efforts in improving their eco-efficiency with sustainability goals and minimize the risk of burden shifting.