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Business and Development Geneva, 2 September 2008.

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Presentation on theme: "Business and Development Geneva, 2 September 2008."— Presentation transcript:

1 Business and Development Geneva, 2 September 2008

2  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? Outline

3 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

4  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 How can business best engage to address development challenges?

5  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 WBCSD & 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

6 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.

7 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

8 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

9 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

10 “Golden rules” for engaging the low- income segment - Innovation along every step of the value chain -Revisiting basic business questions (drivers and motivations? market needs? finance? affordability? measuring success? etc.) FOCUS on core competencies PARTNER across sectors LOCALIZE value creation

11  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. Roadblocks…

12  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 Conclusion

13 Thank you…

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