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Hybrid Metrics: Connecting Shared Value to Shareholder Value

by Carina Wendel; Erin Sullivan; Kerry Rodriguez; Mark R. Kramer; Nina Jais

Sep 4, 2020

Today, investors are able to identify "good" companies and "profitable" companies but not companies doing the most good most profitably which is a missed opportunity for business, investors, and society.

In Hybrid Metrics: Connecting Shared Value to Shareholder Value, we introduce a new approach that combines companies' social and environmental impact with standard measures of financial performance, making the connection between the two explicit. Hybrid metrics are still in the nascent stages, but the benefits and potential they hold are promising. We hope this report inspires companies, analysts, and investors to experiment with this concept and bring us closer to demonstrating the causal link between social/ environmental and financial performance — underscoring the importance of creating shared value.