1. Harnessing the Power of Business to Fight AIDS: Unilever & M·A · C Cosmetics  Peace Through Commerce Conference  Mark Holloway

2. What do these have to do with AIDS?

3. Presentation Overview 1)Overview of the pandemic 2)The case for business action and GBC 3)Companies in Action: Unilever and MAC Cosmetics

4. The Global AIDS Crisis AIDS is the worst health crisis in all of human history 25 million people have died

5. The Global AIDS Crisis Women make up over 50% of infections 25 million AIDS Orphans by 2010

6. Source: UNAIDS, AIDS Epidemic Update 2004 Total: 40 million Adults and Children living with HIV/AIDS at the end of 2005 Western Europe 610 000 North Africa & Middle East 440 000 Sub-Saharan Africa 24.5 million Eastern Europe & Central Asia 1.5 million South & South-East Asia 7.1 million Australia & New Zealand 35 000 North America 1 million Caribbean 330 000 Latin America 1.6 million East Asia & Pacific 1.1 million The Global AIDS Crisis

7. Over 13,000 people are infected every day

8. The Global AIDS Crisis Over 13,000 people are infected every day Over 90% of people do not know they have the virus

9. Emerging Epidemic in Emerging Markets Russia, India, China are increasingly at risk

10. Growing Epidemic CHINA HIV Prevalence Curves: 3 scenarios China, 2000-2025 Source: Nicholas Eberstadt, Senior Advisor to National Bureau of Asian Studies, Copyright © 2002 45.87 Million Infected 14.26 Million Infected

11. Growing Epidemic INDIA HIV Prevalence Curves: 3 scenarios India, 2000-2025 Source: Nicholas Eberstadt, Senior Advisor to National Bureau of Asian Studies, Copyright © 2002 57.89 Million Infected 13.19 Million Infected

12. Growing Epidemic RUSSIA HIV Prevalence Curves: 3 scenarios Russia, 2000-2025 Source: Nicholas Eberstadt, Senior Advisor to National Bureau of Asian Studies, Copyright © 2002 1.6 Million Infected 7.31 Million Infected

13. Why should business take action against HIV/AIDS? 1.Economic Impact

14. Why should business take action against HIV/AIDS? 1.Economic Impact “potential threats to the creation of value”

15. Why should business take action against HIV/AIDS? 1.Economic Impact “potential threats to the creation of value” Devastating to economies Threat to security Diminishes workforce Cuts productivity and profit

16. AIDS Decimates Economies -1.6 -1.4 -1.2 -0.8 -0.6 -0.4 -0.2 0 05101520253035 HIV Prevalence Rate (%) Reduction in growth rate GDP per capita (%, per year) Source: R. Bonnel (2000) Economic Analysis ofHIV/AIDS, ADF2000 Background paper, World Bank. Slide adapted from UNAIDS: “Socio-Economic Impact of HIV/AIDS in Africa,” presented by Anita Alban and Lorna Guiness, ADF 2000. Growth Impact of HIV (1990-97) for 80 developing countries

17. The Impact in Africa is Devastating A – This is the GDP growth rate assumed for South Africa without AIDS. B - Shows that the decline in the growth rate tapers off as the HIV prevalence rate increases from 5 to 30 percent. Source: HIV/AIDS: DOES IT INCREASE OR DECREASE GROWTH IN AFRICA?, René Bonnel, ACTAfrica, World Bank, November 6, 2000

18. Estimated Loss to China’s GDP as a Result of HIV/AIDS, In 2010 Experts project losses to China’s GDP due to HIV/AIDS could be as high as $2 billion in 2010 and will exponentially increase after that The death of one worker due to HIV/AIDS costs China’s economy 25 years of lost labor productivity Over 90 percent of peasants have no access to health care RMB Billions Impact on China’s Economic Development

19. Health consumes more of government budget Declines in family savings and disposable income AIDS Threatens Security & Economic Development MACROECONOMIC IMPACTS Reduced investment Foreign investment and tourism decline Tax revenues fall Brain drain

20. AIDS Diminishes Workforce Source: Nicholas Eberstadt, Senior Advisor to National Bureau of Asian Studies, Copyright © 2002 No HIVSevere Epidemic Deaths CHINA1.46 billion1.37 billion90 million INDIA1.38 billion1.26 billion120 million RUSSIA140 million120 million20 million TOTAL230 million Population in 2025

21. Officials and businessmen are 10 to 22 times more likely to buy sex than physical laborers ■ Truckers in India: more than 40% HIV+ Threats Looming Below the Radar

22. The Impact on Business: Declining Productivity and Profits Increased cost for health care, burials, training and recruitment of replacement employees Decreased revenues as a result of absenteeism due to illness or attendance at funerals Employees in their most productive years are affected

23. Why should business take action against HIV/AIDS? 1.Economic Impact 2.Changing Consumer Attitudes Expectations of private sector Shifting balance of trust Cause-related product marketing

24. 2005 Survey: U.S. consumer attitudes towards business and AIDS AIDS is a serious issue. Think companies should be “actively involved” in fighting AIDS. Would pay more for a brand “if they knew that the extra money was going specifically to a program to fight AIDS.” 96% 71% 67% Consumer Attitudes

25. To mobilize international business in the fight against AIDS, tuberculosis and malaria. Mission of GBC

26. History: Launched in June 2001 Response to Kofi Annan’s call to action Private Sector ‘Focal Point to Global Fund to Fight AIDS, TB & Malaria Leadership: Ambassador Richard Holbrooke – CEO and President Sir Mark Moody-Stuart, Chairman, Anglo American Bertrand Collomb, Chairman, Lafarge Cyril Ramaphosa, Chairman, Shanduka Offices: New York, Paris, Geneva, Nairobi, Johannesburg, Kiev, Moscow, Beijing, Delhi (2007) Overview of GBC

27. Member Companies

28. 1.In the Workplace 2.In the Community 3.With its Core Competency 4.Through Advocacy and Leadership Business Action: Four Components

29. Impact Mitigation: Unilever Tea Kenya Kericho district 20,000 employees Live on company estates with families – 80,000 people

30. Impact Mitigation: Kenya 1999: HIV/AIDS a national disaster More than 1.2 million adults living with HIV/AIDS (2003) 650,000 AIDS orphans (2003) Unilever Tea Kenya Annual medical budget: $1.4 million 22 dispensaries 4 health centers 85-bed hospital Estimated 9% infection rate

31. Impact Mitigation: May 2002: HIV/AIDS Policy Education and Communications Awareness Prevention Medical care Company best practice strategies Non-discrimination policy No routine HIV screening without informed consent

32. Impact Mitigation: Lessons Learned Clear policy and leadership support Involved people living with HIV/AIDS Strategic: targeted groups Capacity building Partnerships Kenya HIV Aids Business Council Kenya Tea Growers Association Walter Reed - PEPFAR National Org. of Peer Educators GTZ Local schools

33. Created by Bono & Bobby Shriver, 2006 NOT a charity Aims to deliver sustainable flow of contributions from the private sector to the Global Fund (Gap) RED, after 2½ weeks raised enough money to: educate 1 million people in HIV training provide 35,000 children orphaned by AIDS with a year's worth of school materials and daily hot meals Market Opportunity:

34. VIVA GLAM lipstick Response to devastation of AIDS in fashion, cosmetics industry Company underwrites all product expenses Collaborates with retail partners Contributes 100% of retail selling price to M·A·C AIDS Fund ONLY advertised M·A·C product Market Opportunity:

35. Five new launches since 1994 Extensive use of celebrity endorsements - Elton John - Missy Elliott - Pamela Anderson - Lisa Marie Presley One of fashion world's most successful fundraising initiatives Contributed $75 million to M·A·C AIDS Fund

36. Market Success: -Pamela Anderson: 200% increase in sales; $3 million in six weeks -Lifted sales across all product lines Spawned additional efforts: -Kids Helping Kids -Get Tested -Good Spirits Become “heart and soul” of M·A·C Cosmetics

37. The Next Wave 1. Co-Investment/Public-Private Partnerships

38. 1. Co-Investment / Private-Public Partnerships -Brings together various sectors with unique and complementary resources -Four pilot projects: -Nigeria (2) -Kenya -South Africa -$1.4 million investment by PEPFAR -“Making Co-Investment a Reality” produced with GTZ Co-Investment Development Goals Private Sector Goals PPP

39. The Next Wave 1. Public-Private Partnerships 2. Emerging Economies 3. Testing 4. AIDS in Black America People Living with AIDS in United States (CDC, 2004)