Business and Development
Geneva, 2 September 2008
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?
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
How can business best engage to
address development challenges?
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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
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
Development community
• Value business as an
integral part of povertyreduction strategies
• Develop new ways to
leverage the capabilities of
the private sector
• Identify opportunities for
strategic and operational
partnerships
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
Accessing cash via mobile phones
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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.
Empowering rural women
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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
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
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
“Golden rules” for engaging the lowincome 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.)
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.
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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.
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
Thank you…
www.wbcsd.org/web/development.htm
www.inclusivebusiness.org