Business and DevelopmentGeneva, 2 September 2008

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

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

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?

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

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.

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

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 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

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…

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

Thank you…

www.wbcsd.org/web/development.htm

www.inclusivebusiness.org