About the WBCSD

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(No Transcript)
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Outline

• About the WBCSD
• The business contribution to development
• Some stories showing how companies are part of
  the solution in addressing poverty
• Lessons learned from businesses engaging the
  low-income segment
• What are some of the issues that are getting in
  the way of making markets work for the poor?

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About the WBCSD

• Coalition of 200 leading companies with a shared
  commitment to sustainable development
• Platform for companies to explore sustainable
  development, share knowledge, experiences and
  best practices, and to advocate business
  positions on these issues in a variety of forums,
  working with governments, NGOs, and IGOs
• Members are drawn from more than 35 countries and
  20 major industrial sectors.
• Additional outreach via global network of about
  55 national and regional business councils and
  regional partners

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How can business best engage to address
development challenges?

• Focus on business action through core business
  activities, engaging the low-income segment in
  companies value chain through direct employment,
  as suppliers, as distributors / retailers, as
  service providers, as well as the consumers of
  affordable products and services that improve
  their overall quality of life
• Business case
• Governments and civil society are paying much
  closer attention to the benefits accruing (or
  not) to their countries from FDI. If nationalist
  and protectionist agendas take over, the losers
  will be multinational firms
• Poverty and income inequality bring about
  political and economic instability, which are a
  significant threat to the pursuit of sustainable
  development
• More importantly for business lost opportunity
  as these companies may fail to realize new
  revenue streams in an increasingly competitive
  and resource constrained world.
• By 2050 a further 3 billion people will be added
  to the global population mainly in Africa (1.1
  billion) and Asia (1.5 billion) and mainly in
  the low-income bracket.
• Challenge find ways to satisfy the needs of this
  income group through the provision of affordable
  products and services (for ex. access to
  financial services, energy, provision affordable
  housing, health care, more efficient and
  affordable agricultural products, etc.
• Business can and does offer solutions to these
  needs and business can clearly do more

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WBCSD development

• WBCSD working with around 50 member companies as
  well as network of regional partners around the
  world to identify, mature and document
  responsible, sustainable, and inclusive business
  activities - the business models that are both
  good business and good for development

• Business community
• Explore new ways of doing business in
  unconventional markets
• Build awareness to  learn by doing  and  learn
  by sharing 
• Identify and disseminate best practices

• Development community
• Value business as an integral part of
  poverty-reduction strategies
• Develop new ways to leverage the capabilities of
  the private sector
• Identify opportunities for strategic and
  operational partnerships

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Accessing cash via mobile phones

• Vodafone - mobile telecommunications company
• Rolling out a service that allows customers to
  access cash via their mobile phones
• allows customers to borrow, transfer and make
  payments using a mobile phone, transforming
  financial services by making transactions
  cheaper, faster and more secure.
• Result of a partnership between the Vodafone
  affiliate Safaricom, DFID (provided matching
  funding for pilot), commercial bank of Africa
  (providing local banking services and the
  regulatory interface), and the microfinance
  organization Faulu (providing the local
  expertise).
• Since its launch in April 2007, M-PESA has
  attracted over 2 million Kenyan customers, with
  200,000 more signing up every month on average.
• A similar service, branded M-Paisa, was launched
  in Afghanistan. Also plans to launch in Tanzania.
  

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Empowering rural women

• Unilever - specialized in hygiene, home care,
  and personal care
• Challenge for its Indian subsidiary, Hindustan
  Lever develop locally appropriate distribution
  channels for customers in undeveloped, and often
  very remote, regions
• Goal work from within these communities,
  promoting health while generating sustainable
  income for the low-income segment
• Through its Project Shakti (strength),
  Hindustan Lever now works with 46,000
  entrepreneurial women, covering 100,000 villages
  in 15 states and reaching over 3 million
  households in India
• provides significant opportunities for local
  women to participate in the economy
• empowers local communities
• promotes health and hygiene (pre- and post-natal
  care, prevention of common diseases, personal
  health, community hygiene)
• Hindustan Lever estimates that by 2010 the
  program will generate an annual combined income
  for Shakti entrepreneurs of over US 25 million a
  year

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Investing in enterprise development

• In the late 1980s, Anglo American, a mining
  company, established an initiative called Anglo
  Zimele to promote the development of SMEs in
  South Africa
• Action take equity positions in what Anglo
  considers sustainable and commercially viable
  small businesses
• Anglo provides capacity building and leverage
  with the banks to ensure access to financial
  services.
• Result SMEs grow and compete more successfully
  for business
• Once the business is financially self-sustaining,
  Anglo then exits the company at an appropriate
  time

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WBCSD-SNV Alliance for Inclusive Business in
Latin America

• Strategic partnership with SNV Netherlands
  Development Organization, provider of strategic
  advisory, knowledge, and advocacy support
  services
• Brokering inclusive business opportunities that
  are good business and benefit low-income
  communities
• Three joint work areas
• Action through inclusive business brokering
• Advocacy to improve framework conditions at
  national level for this type of inclusive
  business
• Awareness-raising and capacity building
• Active in 9 countries
• Some 40 inclusive business opportunities are
  currently being implemented from supply chain
  opps. in the agricultural sector to furniture
  makers, low-income housing, micro-insurance and
  mobile banking, forestry, and biofuels

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Golden rules for engaging the low-income segment
FOCUS on core competencies
PARTNER across sectors
LOCALIZE value creation

• - Innovation along every step of the value chain
• Revisiting basic business questions (drivers and
  motivations? market needs? finance?
  affordability? measuring success? etc.)

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Roadblocks

• Business cannot act in isolation there is
  urgent need for collaborative action among
  governments, business, and other actors need to
  work together to create the right incentives for
  this type of inclusive business to be replicated
  and achieve scale.
•  WBCSD members regard a favorable investment
  climate as an essential prerequisite for the
  success of their projects in the developing world
  main priorities 
• A fair and competitive global market that is
  non-discriminatory
• The improvement of regulatory frameworks to
  uphold property rights, to promote greater
  movement of entrepreneurs to the formal economy,
  and to root out corruption
• Capacity building and access to finance for local
  enterprises and entrepreneurs
• Investment in the necessary infrastructure such
  as roads, energy, telecommunications, and ports.

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Conclusion

• Business is part of the solution to development
  challenges
• Crucial that the role of business in development
  is viewed beyond the provision of resources
• Rather business as a key enabler of social and
  economic progress and as a key stakeholder in the
  efforts to achieve sustainable development
• Many companies are already promoting sustainable
  and inclusive business activities with partners
  from the development community and civil society
• But more can be done through collaborative action
  with governments and civil society
• Ultimately, all have a collective responsibility
  to ensure that markets really work for all

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Thank you
www.wbcsd.org/web/development.htm
www.inclusivebusiness.org