Co-Author: Roshini Prakash
5 min read
Having a positive impact on the environment, society and government has shown a strong positive relation with your firm’s value, with a 2015 study by Nielsen showing that 66% of global consumers are willing to pay more for sustainable goods. While most corporates are already engaging in a wide range of sustainability efforts, there are emerging pathways to do more, and more effectively.
Identifying your organisation with the Inclusive Business (IB) sector is a starting point to improving your company’s sustainability efforts. IBs are size and industry-agnostic for-profit organisations, and are similar to other businesses in all ways except one: that they deliberately engage with the base of the pyramid at various points in their supply chain.
Here are three ways for you to incorporate IB practices in your firm, depending on its size and the maturity of its sustainability framework:
1. If you are a small or medium-sized business looking to grow: Identify investors who are aligned with your mission to support you with investment and technical assistance
If you have an SME that is developing sustainable solutions to address community needs, you are not alone as you are part of the IB community. Identifying yourself as being part of this ecosystem is an important step as it allows you to think about interesting opportunities that can provide you access to capacity building resources, both financial and non-financial.
Javara is an interesting example from the region. Established in 2008, the Indonesia organic and direct sourcing food company that has effectively employed inclusive business principles to expand its business and impact smallholder farmers in Indonesia. In just over 10 years it has partnered with 50,000 smallholder farmers across Indonesia, strengthening the capacity of its suppliers and improving workplace safety standards. It now sells over 600 artisanal food products, marketing them both nationally and internationally and has been successful in securing premium prices for the farmers and processors in its supply chain. It’s market access has grown to include 18 countries over 4 continents making up 90% of its total turnover.
2. If you are a medium – large corporate starting out on your IB journey: Integrate IB activities into existing CSR programmes
Your firm’s corporate social responsibility (CSR) programme can be an effective launchpad to engage in inclusive business. This will amplify the strategic nature of your efforts, deriving benefits both for your company and the communities and organisations you engage as part of your efforts.
Many companies have made strong commitments to CSR, partnering with key players in the space to drive social impact. Inclusive business presents the opportunity for such companies to engage with the base of the pyramid more holistically, as an integral part of the business strategy, increasing the value of CSR to the business. By partnering with the BoP and organisations that work with them, you can equip them to contribute sustainably to the corporate supply chain. Building the capacity of the BoP can have the effect of accelerating productivity, increasing incomes and bolster the growth of the sector. There is an inaccurate assumption that any activity with social intent cannot simultaneously be financially viable or that any financial viability will be limited or incidental. IBs can and must be financially viable and at scale, driving home the idea that business can be both socially enabling and profit-making.
Kellogg, the world’s largest food and beverage company, has been engaging in IB activities for several years, and has grown to address a range of social issues – including hunger alleviation, health and nutrition, and environmental sustainability – through its business. It not only ensures that its top ingredients and materials are being sourced responsibly, but also has trained 500,000 farmers in climate-smart agriculture practices that improve yield productivity, reduce greenhouse gas emissions and ensure sustainable livelihoods. These initiatives have benefited Kellogg in securing access to reliable, cost-effective and high-quality commodities, while catapulting their public-private relationships and brand perception.
3. If you are a medium – large corporate looking to accelerate IB integration: Leverage partnerships to grow effectively
Even the largest international corporation cannot be a master of all trades. To drive successful IB activities, you need to re-envision your goals and strategies on a structural level. Integrating IB models means engineering new ways of thinking and doing in every part of your operations. One way is to engage partners with existing networks to expand your access and accelerate the growth of your IB model effectively.
Essilor is the world’s largest manufacturer of optical lenses and its mission is to correct and protect the visual health of all people, including those at the base of the pyramid. Recognizing the need for innovative solutions to meet this goal, It established the Bottom of the Pyramid (BoP) Innovation Lab, which incubates new business models and solutions that are reaching consumers in the BoP across the markets.
Notwithstanding its clear commitment, Essilor knows that it cannot achieve its goals alone. It is regularly looking for partners, especially in more rural communities, where people with vision needs do not have access to qualified support. For example, in Indonesia, Essilor’s Mitra Mata Programme taps on primary vision care providers to support Indonesians whose safety and ability to learn and work are negatively impacted by uncorrected poor vision. Partners in the programme can gain medical qualifications through special business training from Essilor to even set up their own optical store.
Developing conditions that will help you become an IB take time and intentionality. Regardless of the stage of development you are in, or the type of capital resources you hold, there is a way in which you can integrate IB practices in your business. To kickstart your IB journey in Asia, find the right partners and deals on the AVPN Inclusive Business portal.