1. IFC Against AIDS Protecting People and Profitability

2. Why IFC Takes AIDS Seriously  A priority for the development community  95% of people infected live in developing countries  Most companies not aware of risks  Companies don’t know where to start  An integral part of IFC’s commitment to sustainable development

3.  Reputation risk  Financial impact  Threat to company’s viability The Business Case

4. The Reputation Risk

5. AIDS: Impact On Bottom Line  Medical and other benefits costs  Absenteeism and lower productivity  Labor turnover, recruitment and training costs  Experienced personnel  Enabling environment  Shrinking markets

6. The Business Case Benefits vs. Costs  Boston University AIDS impact assessment on six corporations in South Africa and Botswana.  Six industries: mining, metals processing, utilities, agribusiness, retail, and media.  Findings:  The annual "AIDS tax" on business was as much as 5.9% of the corporations' labor costs.  Workplace AIDS programs would reduce this “AIDS tax” by as much as 40.4%.  All six companies would have earned positive returns on their investments if they had provided antiretroviral drugs at no cost to HIV- positive employees. Source: Harvard Business Review, February 2003

7. The Business Case Benefits vs. Costs  A University of California-San Francisco study on large Ugandan companies (500+ employees) found that even programs offering the most expensive HIV treatment — anti-retroviral care — can be cost-effective especially in light of 85% price reductions offered by drug manufacturers for sub-Saharan Africa. Source: UCSF electronic newsletter Daybreak, 7/14/2000  A study of 16 large firms (average 1,200-1,500 employees in each firm) in Kenya estimated that the AIDS impact could be 3-8% of total labor costs by 2005 and 4% of profits. Source: AmfAR - Treatment Insider Newsletter, January 2003

8. The Business Case Benefits vs. Costs  Most firms pay funeral costs such as coffins, transport of the body and a number of mourners, and 6-12 months payment of death gratuity. One sugar company in Uganda estimates this cost to total US$500 per employee. Source:Nabalonzi et al. 1995  Chilanga, Zambia’s largest cement factory saw a 15-fold increase in funeral-related absenteeism between 1992 and 1995. As a result, the company has restricted employee absenteeism for funerals to only those for a spouse, parent or child. Source: Bloom et al. 2001

9. SMEs Viability  A study of 209 small businesses in South Africa identified HIV/AIDS as one of the three main factors that cause nearly 80% of South African start-up SMEs to fail every year (the other two factors are crime and inadequate management expertise) Source: S. Eeden et al. – 2001

10. When to contact IFC Against AIDS  The company relies on a workforce separated from their families for long periods of time  Mining, construction, shipping, trucking, and other industries employing migrant labor  Employees’ salaries tend to be higher than in the surrounding community  The sector can be a target for activists  Extractive industries, companies with a strong brand name, companies sensitive on their “license to operate”  The company relies on key jobs/individuals  The loss of one of those key individuals can prove catastrophic  Large workforce  The magnitude of direct and indirect costs will be stronger

11. IFC Against AIDS  Awareness  Guidance  Training  Financing Goal: Accelerate the involvement of private sector, and especially of IFC clients worldwide, in the fight against AIDS

12. “It is inevitable that a firm doing business in the developing world will pay for AIDS. It is just a question of when and how much.” Lee Smith Former President, Levi Strauss International