inclusive business challenge

The Inclusive Business Challenge: Identifying opportunities to engage low-income communities across the value chain

December 2009

1. Getting started: Challenge to opportunity

2. Defining the issues: Debates and dilemmas

3. Learning from experience: Case study examples

4. Building inclusive business: Simulation5. Making it happen: Aspirations and actions

Challenge?

Opportunity?

4

Charity?

Business?

Local farmer?

Global supplier?

5

Enabler?

Barrier?

6

Aid?

Talent?

Luxury?

Necessity?

Developed?

Developing?

Challenge?

Opportunity?

• Coalition of 200+ leading companies

• Market capitalization: US$8 trillion

• Total member company employees:13 million

• Supplies products and services to half of the world’s population

The WBCSD

WBCSD Development Focus Area

2002 2004 2005 2007 2008

Doing business with the poor: a

Field Guide

Finding capital for sustainable livelihoods businesses

A business guide to

development partners

Business for Development

Investing for Sustainable

Development

Sustainable Livelihoods: the

business connection

Promoting Small and Medium

Enterprises for Sustainable

Development

Doing Business with the World

Investing in a low-carbon

energy future

Measuring Impact

Framework

2009

Mobility for Developme

nt

Inclusive Business

blog & video with SNV

Inclusive Business Alliance

with SNV

Video library

Sustain magazine

• Creates awareness amongst business on risks and opportunities

• Defines & advocates the role of business in development to stakeholders

• Demonstrates leadership by promoting business-led action

• Key issue areas: Measuring Impact, Inclusive Business, Mobility and Energy for Development, Local Content

Future Leaders Team 2009

Dynamic and diverse business leaders shaping the future of sustainable

development thinking

IB Challenge Objectives

• Raise awareness of the role of business in development

• Introduce the challenges, drivers and principles of inclusive business

• Present good practice examples along the value chain

• Identify risks and opportunities in building inclusive business through simulation

• Suggest ways to integrate inclusive business into company strategy

The markets of the future are in the developing world

What percentage of the global population is expected to live in today’s developing countries in 2050?

World Population 1950 - 2050 (billions)

Source: United States Census Bureau, International Database, 2008

World12108

4201950 1975 2000 2025

6

2050

Population growth in the developing world

What does this mean for business?

85%

Opportunities for companies to develop affordable products and services that

meet the needs of low-income communities


What percent of the world’s population live on less than $10 a day?

14

Source: World Bank Development Indicators, 2008

World population living above and below the stated income level (2005)

86 2051607378

80

49402722

$1.00 $1.25 $1.45 $2.00 $2.50 $10.00Below income level Above income level

80%

Which areas of the world face the greatest income inequality?

What does this mean for business? Exclusion from market opportunities can

lead to barriers to business and resistance to globalization

China and Latin America

World income inequality

Source: UNDP, Human Development Report 2007/2009; World Bank

How many people in the developing world do not have access to electricity?

What does this mean for business? Access to energy is one of the key

drivers of economic growth. Business has a key role to play in

improving access.

Source: IEA. World Energy Outlook 2006

1.6 billion

What is the proportion of population under 24 in developing countries?


Global median age (2009)

Source: CIA World Factbook 2009

The growing number of young people in developing countries represents

major new labor and consumer markets for business.

48%

How many people in the world still have no access to any sanitation facility?

What does this mean for business? Business cannot thrive in societies where people do not have access to

basic services such as sanitation, clean water and health.

Access to Sanitation (2009)

1.2 billion

Source: UNESCO, The United Nations World Water Development Report 2 (2006)

Inclusive business enables organizations to tackle these challenges and seize the opportunities they present

“Our political leaders aren’t the only ones who’ve been handed a mandate for change. Leaders of businesses and institutions everywhere confront a unique opportunity to transform the way the world works.”

Samuel J. Palmisano, President & CEO of IBM Corporation

1.Getting started: Challenge to opportunity2.Defining the issues: Debates and

dilemmas3.Learning from experience: Case study

examples4.Building inclusive business: Simulation5.Making it happen: Aspirations and actions

Business contribution to development

Business

“Corporations are social institutions. If they don't serve society, they haveno business existing.”

Henry Mintzberg, Professor, McGill

University

Why now? Why change?

Globalized economy and free movement of goods and services

Political pressure to affect poverty through goals & targets

Recognition of the drivers and impacts of SD

Increased expectations of the role of business in society

New information and communication technologies

Microfinance

Base of the Pyramid

So what? Business action...

SME linkagesPhilanthrop

y

Inclusive Business Social

Investment

Corporate Social Responsibility

Social enterprise

Microfinance

Social Investment

Base of the Pyramid

Inclusive Business

SME linkages

Corporate Social

Responsibility

Social enterprise

Philanthropy

Inclusive business

Definition: profitably engaging low-income populations across companies’ value chains and developing affordable products and services that meet the needs of low-income populations.

Design Procurement Manufacturing Distribution

WBCSD believes multinational companies can support poverty alleviation and meet

profitability goals through inclusive business.

What’s in it for business?

“As an engine of economic growth and employment and a source of technology and innovation, business has a key role to play in providing system solutions for a more sustainable world.”

Björn Stigson, WBCSD President

Protecting

•Reducing risk and stronger supply chains•Strengthening the license to operate•Increasing brand value and reputation

Managing

•Reducing costs•Enhancing productivity•Raising the quality of people/new labor sources

Growing

•Improving cost of capital•Accessing new markets

•Stimulating innovation•Promoting revenue growth

Government Business

Society

It is not just the responsibility of business

“Public governance is a global issue. No longer can businesses, governments, or non-governmental organizations afford to act independently of each other - the stakes are just too high. Only through a combined effort can we achieve economic growth, sustainability, and create an opportunity for a better life for people everywhere.”John Connolly, Global Chairman, Deloitte

So what? Business action...

Scale up

Speed up

Innovate up


dilemmas3.Learning from experience: Case

study examples4.Building inclusive business: Simulation5.Making it happen: Aspirations and actions

In practice, it’s not easy

...core business?

…our role?

…profitable?

…a growth

opportunity?

…too risky?

…required?

…scalable?

…viable to partner?

…ethical?

Is it…

The value chain


Design


1

Design explained

• Designing affordable and appropriate products and services that meet the needs of low-income populations

Grundfos Vodafone Allianz

Philips Reuters

Allianz

What? Affordable life and non-life insurance products catered specifically to low-income populations.

Why? Less than 80 million people in the 100 poorest countries have access to insurance (3% of the population). Without insurance, they risk losing everything. Developing micro-insurance products for the poor helps Allianz reach new markets.

How? Allianz joined forces with NGOs to overcome the high administrative costs and lack of awareness about insurance to reach villages across southern India, Indonesia, Egypt and soon West Africa.

Results… More than 1.8 million people in India, Indonesia and Egypt are now protected by Allianz microinsurance policies. Allianz aims to reach 3 million clients with microinsurance products by the end of 2009.

Keys to success

• Understand how people use products & services and individual/family needs & aspirations through research

• Adapt products to needs & incomes of low-income markets

• Be aware of cultural dynamics, including the influence of status symbols and gender roles

• Consider maintenance & packaging options for available infrastructure

• Engage stakeholders including NGOs and communities in design of products

Procurement2


Procurement explained

• Sourcing from local producers• Building the skills of small-scale,

often low-income producers to be part of a company and industry’s supply chain

Natura

MichelinPronaca

Natura

What? In 2000, Natura launched the EKOS product line, which uses Brazilian biodiversity as a business and innovation platform.

Why? Company interest to enhance brand value and growth while fulfilling its commitments to environmental responsibility and social justice, including support of low-income communities in the Amazonian region.

How? Reaching communities that supply raw materials and ensuring these materials are extracted or planted sustainably throughout the entire production chain demands specific knowledge and partnerships. A Relationship Quality System was designed to assess the links with communities based on seven criteria.

Results… Currently, EKOS accounts for 10% of Natura’s sales and adds to its brand value. Natura has 56 natural asset supply agreements with companies, farms and communities in Brazil and throughout Latin America. Of these, 19 are with traditional communities and local providers of raw materials.

Keys to success

• Identify local skills and find ways to leverage them

• Build new skills and capacities among producers

• Support primary and secondary education

• Act as guarantors for micro-medium loans for suppliers

• Advocate for regulatory environments that support SMEs

Manufacturing


3

Manufacturing explained

• Mitigating negative impacts of operations on communities surrounding sites and supporting access to basic services for employees and communities

• Support local employment as well as fair and healthy working conditions

ArcelorMittal Novartis

InterfaceFLOR

Novartis

What? In 2005, Novartis made a commitment to pay a living wage to associates across the globe.

Why? In many cases, minimum wage levels are not adequate to fulfill the basic daily needs of workers and their families. The living wage policy is a key benchmark of the company’s commitment to the UN Global Compact and helps employees’ & their families meet basic needs.

How? Novartis joined forces with Business for Social Responsibility to develop a methodology to determine Living Wage levels based on a basket of goods. Each year a living wage is calculated and proposed for each country based on the methodology. Once the figures are established, salaries for associates are reviewed and any associate found below the agreed level has their pay adjusted immediately.

Results.. In the first year of the program 93 Living Wage cases were identified and adjusted to Living Wage levels. Living Wage cases have decreased steadily to zero in 2009, after only 3 cases were identified and adjusted in 2008.

Keys to success

• Work with communities to manage negative impacts of operations

• Comply with & enhance labor and environmental standards

• Increase direct local employment

• Support community access to basic services

• Promote the empowerment of women

Distribution4


Distribution explained

• Developing distribution networks for products and services among small-scale businesses and improving access to products and services

Coca-Cola Holcim

Unilever

Coca-ColaWhat? Manual Distribution Centers (MDCs) are independently owned, low-cost manual operations created to service mainly emerging urban and peri-urban retail markets where classic distribution models are not effective or efficient

Why? Crowded urban settings as well as peri-urban settings with poor road infrastructure are hard to reach by large trucks. There is also a lack

of support for entrepreneurship, particularly for women in many parts of the world

How? Coca-Cola Sabco first developed the MDC model as a pilot in Ethiopia in 1999. By 2002 is had implemented the model on a broad scale throughout East Africa.

Results… Across Africa, Coca-Cola has supported the creation of over 2,800 MDCs and other similar small independent distributors, generating over 13,000 jobs and more than USD 550 million in annual revenues. MDCs account for over 80% of Coca – Cola’s sales in East Africa and its use is growing in West Africa. The system has created new economic opportunities for women, who own about 30% of the MDCs across Africa. .

Keys to success

• Consider low-and high-tech modes of distribution

• Understand the barriers to access to markets and basic services for communities

• Use local knowledge of the market

• Consider educational campaigns with distribution

1.Getting started: Challenge to opportunity2.Defining the issues: Debates and dilemmas3.Learning from experience: Case study

examples4.Building inclusive business: Simulation5.Making it happen: Aspirations and actions

Ready?

Source: Chris Toole & Jayne Barrett

Player’s brief

HQ:

Background:

Client needs:

• Washington DC, USA

• Produces and sells clothing in the USA• Has no experience in developing markets

• Diversify into Indian market with a long-term perspective

• Develop a clothing line for low-income sector • Search for opportunities to support socio-

economic development in country while remaining economically viable

You are a group of competing consultancies helping YOUR COMPANY© build an inclusive business plan in India.

YOUR COMPANY© profile:

Instructions

Design: YOUR COMPANY© intends to use a large Indian design company that normally designs for the middle classProcurement: YOUR COMPANY © intends to source standard materials from a multinational company Manufacturing: YOUR COMPANY © intends to use a US specialist that is looking to expand its operations into India in a sustainable wayDistribution: YOUR COMPANY © intends to use an existing Indian brand that has stores all over the country to distribute the product

Across the value chain:1.Discuss alternative options 2.Choose one 3.Justify your choice4.Record your scores (Inclusive business points, costs and revenues)

Note:Reality and risks: Newsflashes(They might change your scores)

The team with the highest profit is the champion

Scoring

Design Procurement

Manufacturing

Distribution Total

Selected OptionInclusive Business ScoreR

EV

EN

UES

Initially 0 0 0 500m 500m

Option changeNewsflash changeTotal

CO

STS

Initially 100m 100m 100m 100m 400mOption changeNewsflash changeTotal

Total Revenues - Total Costs = Profits

Team Name

Product Design


ROUND

1

The Brief

• Your goal:– Design your product range for the

Indian market– Develop cost-effective products for low-

income groups

• Current situation:– YOUR COMPANY© intends to use a

large Indian design company that normally designs for the middle class


Your Options

11

33

22

44

You have

5 minutesto choose

which optionto take

Do the design in conjunction with an international NGO partially financing training for low-income Indian artisans to become designers for the company

Do the design in-house in the US employing a well-known Indian designer who will consult several people from low-income Indian communities

Inclusive business points: 2Revenue change: +20Cost change: -20

Outsource the work to an Indian start up business with graduates from an Indian design school that won a prize for their designs

Inclusive business points:4Revenue change: +40Cost change: -10

Inclusive business points: 1Revenue change: 0Cost change: 0

Inclusive business points: 3 Revenue change: +30Cost change: -30

Use the large Indian design company but encourage them to consult low-income communities in their design process


Product Design

TrainingTraining Bad DesignBad DesignGood DesignGood

Design

Delivery Delay

Delivery Delay

Management

Problems

Management

Problems

Copy-right ViolationsCopy-right Violations


ScoringDesign Procurement Manufacturing Distribution

Design Procurement

Manufacturing

Distribution Total


EV

EN

UE

S

Initially 0 0 0 500 500Option changeNewsflash changeTotal

CO

STS



Team Name

ProcurementROUND

2


The Brief

• Your goal:– Procure materials and parts for your

product

• Current situation:– YOUR COMPANY© intends to source

standard materials from a multinational company


Your Options

You have

5 minutesto choose

which optionto take

Procure from a multinational company but one which is certified fair trade Procure materials from individual Indian farmers in one region, providing training in sustainable farming techniques

Procure materials from a large Indian supplier with their own farms all over India that is working to become more inclusive

Procure materials from a farming cooperative that is present in several different areas of India

11

33

22

44

Inclusive business points: 1Revenue change: +10Cost change: +10

Inclusive business points: 3Revenue change: +20Cost Change: +20

Inclusive business points: 2 Revenue change: +20Cost change: +10



AwardAward Natural DisasterNatural Disaster

Fake Fair Trade

Products

Fake Fair Trade

Products

Quality ProblemsQuality

Problems

ProcurementDesign Procurement Manufacturing Distribution


Design Procurement

Manufacturing

Distribution Total


EV

EN

UE

S


CO

STS



Team Name

Manufacturing


ROUND

3

The brief

• Your goal:– Choose the most appropriate

operations and manufacturing option

• Current situation:– YOUR COMPANY© intends to use

a US specialist that is looking to expand its operations into India in a sustainable way


Your Options

You have

5 minutesto choose

which optionto take

Use a US specialist but one with manufacturing facilities in India

Contract a big Indian manufacturing company that offers access to basic healthcare to employees and their families

Build up own manufacturing in India using local labor including training individuals from low-income communities to become employeesUse a series of small but growing Indian businesses to manufacture your goods

11

33

22

44



Inclusive business points: 4Revenue change: 0Cost change: +20

Inclusive business points: 3Revenue change: 0Cost change: -30


Quality ProblemsQuality

Problems MediaMedia

Child LaborChild Labor Productivity ProblemsProductivity Problems

ManufacturingDesign Procurement Manufacturing Distribution


Design Procurement

Manufacturing

Distribution Total


EV

EN

UE

S


CO

STS



Team Name

DistributionROUND

4


The brief

• Your goal:– Choose how to distribute your product

• Current situation:– YOUR COMPANY© intends to use

an existing Indian brand that has stores all over the country to distribute the product.


Your Options

11

33

22

44

You have

5 minutesto choose

which optionto take

Use a different existing Indian brand retail store that has stores all over the country including in low-income areas

Work with a local NGO to distribute your product via direct selling by individual low- income women all over India

Use several existing unbranded independent local stores in low-income communities all over India

Build up your own stores in India together with an NGO employing low-income people from local communities

Inclusive business points: 1Revenue change: 0Cost change: 0





Distribution

TaxTax NGONGO SME GrantSME Grant

Employee Engagemen

t

Employee Engagemen

tBad DebtBad Debt



Design Procurement

Manufacturing

Distribution Total


EV

EN

UE

S


CO

STS



Team Name

The winner is ...

Team 1 Team 2 Team 3 Team 4

Profit

Inclusive Business

Score

Your feedback

In the simulation:• What were some of the challenges you faced when

making decisions? Is the ideal option always feasible?• To what degree did you consider risks in your decision-

making? • What actions might provide building blocks in the

future?• Was it easier to identify opportunities at particular

stages of the value chain and why? • What surprised you about inclusive business in

practice? What dilemmas did you face?• How would your choices have differed in a different

timeframe? Or in a different country or sector?

Source: Ferran, Flickr

Back to reality


dilemmas3.Learning from experience: Case study

examples4.Building inclusive business: Simulation5.Making it happen: Aspirations and

actions

From simulation to reality

Inclusive business is difficult. Looking back at the case study examples, the simulation and real life experience…

What are the barriers to building inclusive business?

From barriers to solutions

Understanding societal and company context e.g. market fluctuations / local conditions

Making it part of the business e.g. company buy in

Consulting and influencing stakeholders e.g. building capacity

U

nders

tandin

g a

nd

com

munic

ati

ng

impact

s e.g

. sc

ala

bili

ty

How can business overcomethese barriers?

Understanding societal and company context

Adapt to your customers’

needs

"The needs of people in developing and emerging markets can provide significant potential for business…It’s about business growth and value creation that truly enhances the quality of people’s lives through social, environmental and financial returns." Gerard Kleisterlee, President and CEO, Royal Philips Electronics

Meet global and local requirements

Localize goods and services

Stay dynamic and adapt to changing

context

Think small but apply big

Consider business as unusual

Others..

.

Consulting & influencing stakeholders

Listen, learn and share

Manage community expectations

Build local capacity where appropriate

Initiate partnerships

Draw on knowledge of experts

Influence government policy where

appropriate

Others..

.

"There is a need to step up dialogue between the main actors, between the public and private sectors and to ensure that the poor are part of the market. They need to be part of globalization – an inclusive globalization."

Ad Melkert, UN Special Representative

Making it part of the business

Ensure your CEO is on board

Explore opportunities along value chain

Build governance structures

Build skills and understanding

Understand and direct innovation

Others…

“Business cannot succeed in a

society that fails.” Björn Stigson, WBCSD President

Understanding & communicating impact

Monitor progress over time

Identify KPIs

Gather data

Identify what works and what doesn’t

Celebrate success

Share with stakeholders

Others..

.

“Companies do not normally measure their social, economic and environmental footprint in the markets in which they operate and, as we all know, communication without facts is tough.”Patrick Cescau, former Group CEO, Unilever

Identifying opportunities

Where are the challenges and opportunities for your business along the different parts of the value chain?

Where and how can you build inclusive businesses along your value chain?


Business integration

Ref: Five Winds International

Future vision: Identify the ideal state – what the processes should look like in the future

Required actions: Develop the actions necessary to realize the goal

Goal: Select one business activity and explain how it can incorporate inclusive business principles

Current reality: Explain the current reality – how are decisions currently made around this business activity?

Make it happen!

Seize the opportunity!

“Companies that master inclusive business will be those that realize

great success in the coming decades.”Sam DiPiazza, PriceWaterhouseCoopers

References, Resources & Case Studies

WBCSD Others

WBCSD-SNV Alliance blog Case Study library Business for development Doing business with the poor Sustainable Livelihoods Video - Measuring Impact Framework

• UNDP Growing Inclusive Markets

• WRI Next 4 billion• Harvard CSR Initiative Reports• Business Call to Action• IFC Business Linkages

programs• Monitor Inclusive Markets

Additional resources

Grundfos

What? Grundfos LIFELINK aims to provide rural communities in Africa, Asia and Latin America with a sustainable supply of safe drinking water at affordable prices. It uses solar powered pumps and mobile banking techniques to make clean water affordable and accessible.

Why? Commitment to supporting the MDGs and an interest in being an industry leaders in providing sustainable water systems and other infrastructural platforms.

How? LIFELINK uses a single-point water supply with a solar powered submersible pump. It has the capacity to pump 8-16 m3 of water per day. Through a mobile banking platform, communities are able to pay back their investment over 5-7 years.

Results… LIFELINK has reduced the waiting time for water, made it easier to cultivate and sell crops, and improved health standards among the population who used to fetch water from polluted sources. By 2015, LIFELINK aims to touch the lives of more than 1.5 million people.

Vodafone

What? Launched in Kenya in 2007, M-PESA is a mobile payment solution that enables customers, many of whom do not have a bank account, to complete simple financial transactions by mobile phone.

Why? Many people in remote, poor regions of the world are not able to open a bank account because they do not have access to a bank or because they do not have sufficient income to justify a bank account. This lack of access to basic financial services prohibits many from opening a business. The company saw an opportunity to develop a new business model that supports access to financial services and responds to the way people use mobile phones.

How? Vodafone worked with its subsidary in Kenya, Safaricom, and a microfinance institution partner, Faulu, to develop a payment gateway allows mobile talk time to be converted into currency and vice versa.

Results… M-PESA currently has about 7.5 million users and over US$ 3 billion has been transferred peer-to-peer using mobile phone. The company is also testing new services such as international money transfer between the UK and Kenya and bill pay for electricity, water and television services.

Philips

What? Philips woodstove project addresses issues of indoor air pollution for families relying on biomass for daily cooking needs through both philanthropic and commercial channels. The company’s philanthropic design program developed the Chulha, a built-in woodstove which is now being offered to local entrepreneurs. At the same time, a range of portable woodstoves have been developed and integrated into a sustainable business model for the BOP.

Why? 1.6 million people die annually due to smoke inhalation from indoor wood burning stoves. Company interest in exploring new markets, particularly in India and building Philips health and well-being brand.

How? Originally started as part of Philips “Philanthropy by Design“ program, the company is now exploring new distribution channels and social networks, building marketing campaigns, engaging with government, and investigating the potential of using carbon finance

Results… Allows efficient use of wood and reduces health risks of indoor air pollution; up to 90% reduction in carbon monoxide. The company is currently establishing the distribution route after successful product development and promotion.

ReutersWhat? Reuters Market Light (RML) is a fee-based mobile information service

for farmers in India. It brings commodity prices, crop and weather data to farmers via mobile phone.

Why? Reuters aims to help customers succeed by providing indispensable information-based products and services. Nearly two-thirds of India's billion-plus population depend on agriculture for a living, and with only 40 % of its farmland irrigated and markets often distant, farmers are vulnerable to shifts in prices or weather conditions.

How? RML makes available weather reports over a 50-mile radius and local crop prices within a 5-hour journey in the subscriber’s local language for a small fee. RML has built an extensive system of hundreds of full-time dedicated content professionals, product delivery network, and distribution partners to cover news and data on over 250 crops, 1000 markets, and 2,000 weather locations across 11 states in India.

Results… In 2 years, RML has sold some 300,000 quarterly subscriptions to nearly 135,000 farmers in over 15,000 villages across Maharashtra, Punjab & Haryana in India. Some farmers have made as much as US$ 8,000 using the service that costs only US$5 per quarter. Farmers indicated that RML has facilitated greater transparency in the Indian agricultural markets, allowing them to increase productivity, maximize revenue and open up new distribution channels.

Pronaca

What? Program to integrate small-scale maize producers into the company’s supply chain.

Why? Pronaca, one of the largest companies in Ecuador, is a leading buyer of maize. Pronaca wanted to improve the stability of its supply of maize, to source locally and lower production costs.

How? Farmers receive training, access to credit and new technology to increase productivity and develop an extra crop rotation.

Results…The pilot began with 80 small maize producers and has now grown to 200, with plans to increase to over 650 producers. Productivity increased by 20%, which has helped raise producer income from US$ 0.63 to US$ 2 per capita per day. The initiative created 234 new jobs.

MichelinWhat? Acquired by Michelin in 1984, the Bahia plantation in Brazil is comprised of very small

and uneven plots, which are difficult to farm on an industrial scale. The plantation is nonetheless a major source of income for the local communities of Igrapiúna and Ituberá, home to more than 40,000 people. In a context of insufficient productivity and profitability (due to the South American Microcyclus Uleï fungus), Michelin, conscious of its responsibilities, sought to preserve local jobs and safeguard the primary forest.

Why? Respect the values of the company: the need to assume responsibility for environment and people living from these jobs.

How? In 2003, the Group launched the Ouro Verde project, which entailed selling 400-hectare plots of land to twelve Brazilian managers of the plantation, helping them obtain reduced-rate loans and providing them with a commitment to purchase their latex production. The on-site Michelin latex transformation plant remains in operation, as does the research unit that supplies the regional producers and smallholders in more resistant and productive seedlings at cost price. In parallel, Michelin is creating a 3,000-hectare ecological reserve and is pursuing its research on Microcyclus Uleï. In 2007, the creation of a college of agriculture for rural young people enabled 16 to 21 year-old youths to attend lessons, alternating with work on the plantation.

Results Thanks to this project, jobs on the plantation have increased from 568 in 2003 to 1,005 in 2008. An independent review of the project, carried out by the International Labor Office in 2007, concluded that the project had made it possible to maintain existing jobs, create new ones and preserve the workers’ benefits and rights.

Interface

What? FairWorks is about producing beautiful products with social integrity. It grew out of a collaboration between InterfaceFLOR in Europe, a division of the US based Interface Inc., and Industree, an Indian social enterprise working to contemporise and market traditional Indian handicraft skills.

Why? FairWorks is an extension of Interface’s Mission Zero – a commitment to eliminate any negative environmental impact of the business by 2020 – this time focusing on the social aspect of sustainability. Through InterfaceFLOR’s partnership with Industree, FairWorks supports rapidly disappearing traditional skills and plays a part in providing sustainable livelihoods to people around the world living on less than $2 USD/day.

How? FairWorks sources locally available materials and works with local skilled artisans (primarily women in rural India) to produce flooring tiles for consumers in developed markets. FairWorks fuses the best of the company’s textile and market knowledge with traditional textile design. Industree and InterfaceFLOR also help the artisans access microfinance and build capacity to manage their own businesses.

Results… JustTM, the first product in the FairWorks category was launched in 2008 and was co-designed by Industree, InterfaceFLOR, and EXDL – a sustainable design practice. Over 150 families in six villages are involved in FairWorks and many artisans who work with Industree have tripled their income over a 3 year period.

ArcelorMittalWhat? Since 2004, ArcelorMittal Brazil’s supplier engagement program has

focused particularly on sustainability. The success of the scheme inspired Instituto Ethos to work with the Inter-American Development Bank to create their own scheme to strengthen the links between large companies, such as ArcelorMittal Brazil, and small and medium sized enterprises in their supply chains to help them improve their sustainability performance, develop better commercial relationships, reduce costs, and open up new markets and new product opportunities.

Why? Opportunity and necessity to support the adoption of sustainability principles of SMEs and especially those in the company’s supply chain.

How? Over the last two years, ArcelorMittal Brazil, as the sector champion for steel, has been working with 15 companies in their supply chain, helping them to incorporate social and environmental standards into their business practices.

Results… All 15 companies in the group developed their own codes of ethics and 11 created new initiatives to save energy, water and paper. Likewise all 15 companies made real improvements in their production or management processes, and they all gained new clients.

What? Unilever‘s Lifebuoy hygiene education program, Swasthya Chetna (Health Awakening) is designed to promote basic hygiene habits, including hand washing with soap.

Why? Hand washing with soap is one of the most effective and inexpensive ways to prevent diarrheal diseases. Nearly half of Lifebuoy soap sales are in rural Asia and Africa where many people live on less than US$1 a day. Lifebuoy’s social mission is to bring safety, security and health to 5 billion people through active promotion of hand washing with soap.

How? One of the key elements of the Lifebuoy program is the “glowgerm” demonstration performed in schools. When held under ultra-violet light, glowgerm powder glows on the dirt left behind on hands washed only with water. Unilever works closely with NGOs, government and local authorities to adapt messages to specific audiences and educate children on the importance of hand washing.

Results Since the campaign was originally launched in 2002 in India, it has reached 120 million people in nearly 51,000 villages. It has also provided commercial benefit with sales of soap up in districts where the campaign has run. Similar programs have been launched in other countries including Sri Lanka, Indonesia and South Africa. Unilever has also initiated a process to measure the impact of the program on hygiene habits, health and family welfare.

Unilever

What? “Mi Casa” is a service and distribution scheme developed by Holcim Apasco to bring affordable and accessible housing solutions to communities in Mexico.

Why? Company interest to explore developing markets. Large housing shortage in Mexico and little access to acceptable standard and affordable construction materials as well as professional advice.

How? Focus on core product and competencies (cement) which is produced and sold locally. The company brought together trades people, local authorities, housing law experts and credit institutes to offer holistic housing solutions. Since 1996, the company has set up more than 1100 standardized “Mi Casa” centers (building materials depots) that allow resellers to have the full range of building materials and products available locally at reasonable prices.

Results… Holcim Apasco has trained more than 400,000 self-builders and supported the construction or improvement of about 250,000 homes all over Mexico during the last eight years (2000 to 2008).

Holcim

Information and disclaimer

The Inclusive Business Challenge was developed on behalf of the WBCSD’s Future Leaders Team 2009 with participation from Allianz SE, ArcelorMittal S.A., CIMPOR, CLP Holdings Limited, ConocoPhillips, E.ON AG, EcoSecurities Ltd, KPMG, Michelin and Natura Cosméticos S.A. We would like to thank the Future Leaders and their companies for their commitment and contributions. The work was a joint initiative by the WBCSD’s Development and Business Role Focus Areas with project management by Jessica Davis and Katherine Madden.

This material is released in the name of the WBCSD. Like other WBCSD publications, it is the result of a collaborative effort by members of the secretariat and member companies. A wide range of membersreviewed drafts, thereby ensuring that the document broadly represents the majority view of the WBCSD membership. It does not mean, however, that every member company agrees with every word.

Copyright © World Business Council for Sustainable Development, October 2009

Design: Futerra Sustainability Communications, www.futerra.co.ukPictures: World Bank photograph collection, various photographers.

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