When we sat with DFID Bangladesh last year to discuss the Business Innovation Facility country strategy, we agreed to see whether BIF could support any companies that are interested in producing fortified food products. Fortification is the addition of micro-nutrients to foods to increase the intake of one or more nutrients that are inadequate in the food supply, and fortified foods are either raw ingredients (eg rice, milk or salt) or processed products that already have market presence (eg biscuits, flavourings or sauces). The purpose of fortifying food can be to restore the nutrients lost during food processing, to increase the level of a nutrient above that normally found in the food, or to add nutrients that are not normally present in a food which is nevertheless a good vehicle for delivering micronutrients to the consumer. 
To the man on the street, the idea of “inclusive capitalism” is an oxymoron. The exclusive nature of big business is everywhere to see: in the trading excesses of JPMorgan, whose “London Whale” can lose more at the push of a button than most people will earn in a lifetime, and the riches to be crystallised in the share listing of Facebook. Friction caused by business excess is epitomised by the rumbling shareholder spring that has claimed several boardroom scalps as well in the riots across southern Europe sparked by record youth unemployment. So it would be easy to dismiss yesterday’s launch of an initiative under the inclusive capitalism banner as just another appeal for clemency from big business. Yet as a manifesto for change, marshalled in part by Lady Lynn Forester de Rothschild, it ticks several boxes, not least because it is upfront about the corporate world’s failings. But nor does it duck the idea that capitalism can be a force for good. In fact, it argues that the world has little alternative but to embrace it. 
When Unilever bought Ben & Jerry's ice cream in 2000, there was talk of Unilever becoming more like Ben & Jerry's and not the other way round. The ice-cream maker certainly does not appear to have abandoned the principles of its founders. Ben & Jerry's publicly supported the Occupy Wall Street movement and, according to co-founder Jerry Greenfield, nobody got fired. "I am pleased that Ben & Jerry's is able to continue its innovative mission," he says. 
Inter-American Development Bank President Luis Alberto Moreno on Monday called on firms to adopt innovative means for including disadvantaged people in the workforce, and making them partners across the value chain. Moreno spoke during CSRAmericas 2012, the region’s leading annual event on corporate social responsibility. He also stressed the importance of innovation for developing growth models that do not rely on the intensive use of natural resources. CSRAméricas, which is organised by the Multilateral Investment Fund (MIF), a member of the IDB Group, this year focuses on the theme Value Chains and Skills: Opportunities for Impact. The event highlights strategies for integrating small-scale distributors and suppliers into agricultural value chains, and on investments that companies can make in improving job skills as an important way to promote sustainable and inclusive business development. “At the IDB, we believe that finding innovative approaches in the region that are comprehensive and effective in combating poverty and promoting equitable growth, and which are sustainable and competitive, requires the combined efforts of many actors,” said Moreno.
‘Inclusive Business’ has enormous potential to contribute positively to development outcomes. Working through core business models, the ‘Inclusive Business’ approach requires minimal outside support and can often reach a scale unattainable by most direct development interventions. Take for example, Vodafone’s M-PESA service, which has reached more than 18.5 million individuals since 2007 and continues to be a profitable business model (BCtA 2011). But when is business ‘inclusive’ and when is it simply business? How does Coca-Cola’s business model in El Salvador contribute more to women’s empowerment than its typical approach to selling fizzy drinks? Accurate information about business impacts—direct and indirect, positive and negative—can help practitioners to better identify (and support) the approaches that can most positively contribute to development. This paper analyses some of the current approaches and frameworks for evaluating ‘Inclusive Business’ impacts. It finds that while they shed light on the complex network of effects that businesses have and the ways in which some firms are attempting to contribute to development, they are unable to provide information about the actual impacts of business activities. More, higher quality, and less partial ‘Inclusive Business’ evaluations are needed to better enable us harness the potential for business to contribute positively to development. 
Europe's politicians are in a flap. With their economies teetering on the edge, they can't decide between growth and austerity. The world's CEOs are in no such doubt. For them, it's all about growth. No surprise there, then. Modern corporations don't do austerity. They are, we're repeatedly told, fit, lean growth-maximisation machines. New product lines, new customers, new markets: it's the growth formula of our age. But what kind of growth are we looking at and how is it achieved? A study by Accenture shows a profound shift in corporate growth strategies. Andy Lower, Executive Director of The Eleos Foundation and CEO of Eleos Investment Management LLC, introduces the final in a series of events entitled The Blueprint of Impact Investing. Andy shows the potential for developing a personal portfolio that achieves a blended value: one that achieves acceptable financial returns across diverse asset classes while creating social and environment impact. 
Earlier this month, 35 men and women gathered in Santa Barbara, California to discuss how to give away a major slice of their $140 billion of personal wealth. Many had already signed on to the Giving Pledge, a pact pushed by software tycoon Bill Gates and value investor Warren Buffett. Having convinced their peers to give away at least 50% of their wealth to charity, Buffet and Gates turned the super group's attention to how to do it well. According to the Economist, one topic dominated the conversation: impact investing -- the lesser-known and perhaps estranged cousin of socially-responsible investing. Impact investors -- like First Light and Gray Ghost Ventures -- make investments in companies they believe can provide financial return while concurrently tackling some social or environmental ill (so-called "social enterprises"). Major players in the field range from the Omidyar Network, an investor in the media company Digg, to Acumen Fund, our co-investor in a rural, for-profit water purification start-up called Spring Health. The industry promises a path by which 'Giving Pledgers', supporters of the Giving Pledge, can deploy dollars to drive social change in a format they already understand. It would seem to be the best of both the financial and philanthropic worlds. 
Because Africa is a continent of 54 countries, finding data on how Africans live in terms of consumption and spending is not easy, but a new report from the African Development Bank (AfDB) helps to fill the knowledge gap. The report is from the AfDB’s Chief Economist department, entitled “A Comparison of Real Household Consumption, Expenditures and Price Levels in Africa.” Using the South African rand (ZAR) as the benchmark currency, the study found that 11 countries of the countries surveyed had per capita household finance consumption expenditure (HFCE) above ZAR 15,000 or USD 1,800. Nineteen had per capita HFCE of between ZAR 5,000 and ZAR 15,000, while 21 countries recorded per capita HFCE of less than ZAR 5,000. 
Most companies trying to do business with the 4 billion people who make up the world’s poor follow a formula long touted by bottom-of-the-pyramid experts: Offer products at extremely low prices and margins, and hope to generate decent profits by selling enormous quantities of them. This “low price, low margin, high volume” model has held sway for more than a decade, largely on the basis of Hindustan Unilever’s success in selling Wheel brand detergent to low-income consumers in India. However, as an abundance of recent experience shows, the model has a fatal flaw: It inevitably requires an impractical penetration rate of the target market—often 30% or more of all consumers in an area. Stories of well-meaning commercial ventures that couldn’t make sustainable profits are all too common in low-income markets. Despite achieving healthy penetration rates of 5% to 10% in four test markets, for instance, Procter & Gamble couldn’t generate a competitive return on its Pur water-purification powder after launching the product on a large scale in 2001. Although the price—equivalent to 10 U.S. cents a sachet—provided a margin of about 50%, on par with that of the company’s products worldwide, P&G gave up on Pur as a business in 2005 and announced that the sachets would be sold only to humanitarian organizations at cost. 
Impact investing is a hot topic. It has recently emerged as an investment approach that aims to solve social or environmental challenges while generating a financial return. Targeted areas are in both emerging and developed markets and include affordable housing, health care, nature conservation, education, renewable energy, and financial services for the poor. It has attracted the interest of a growing number of foundations, development finance institutions, institutional investors, individual investors, and fund managers. Does impact investing have the potential to enter the mainstream? 
The amount of data in our world has been exploding, and analyzing large data sets—so-called big data—will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus, according to research by MGI and McKinsey's Business Technology Office. Leaders in every sector will have to grapple with the implications of big data, not just a few data-oriented managers. The increasing volume and detail of information captured by enterprises, the rise of multimedia, social media, and the Internet of Things will fuel exponential growth in data for the foreseeable future. 
New York, 23 May 2012 – Ten million low-income people living in rural communities in Sub-Saharan Africa, Asia and the Pacific, Latin America and the Caribbean, will gain access to low-cost solar energy by 2015, in part due to a commitment made by solar energy provider Barefoot Power to the Business Call to Action (BCtA). The BCtA is a global initiative that encourages private sector efforts to fight poverty, supported by several international organizations including the UN Development Programme (UNDP). The Australia-based social enterprise Barefoot Power aims to expand access to its high-quality, energy efficient, affordable light-emitting diode (LED) lamps, home lighting systems and phone chargers, to more off-grid communities with expansion in Ghana, Senegal, Nigeria and India as a focus by 2015. The company has already captured the majority market share in East Africa. |
Every once in awhile an article comes along that is so honest and observant that it opens the door for a fundamental shift in thinking. Curtis White’s “The Philanthropic Complex” in the Spring 2012 Jacobin is such an article. White writes about how the politics behind American philanthropy compromise its ability to create real social change. His focus is the philanthropy that funds environmental organizations, but ultimately he makes a larger point about the limitations inherent in American philanthropy overall. I’m not sure I agree with everything White writes, but his unapologetic description of the politics of philanthropy is so raw that it is refreshing. 
More than 90% of rural India is living on less than USD 4 per day. If we add number of urban poor to it, it would be safe to assume that the number of poor in India can easily cross 800 million. This population with an average daily expenditure of USD 2-3 has a potential market size of USD 900 billion. Even then, this segment is largely un-catered to and neglected by large corporations. The Indian government is also struggling to provide basic infrastructure for services such as – food, water, energy, health services & education to the low-income population.
The term impact investing—the practice of investing for financial return and social good—hit the mainstream pressback in 2010. There has been significant excitement about the potential of impact investing, which some estimate to have a market size as large as $500 billion (which dwarfs traditional philanthropy’s ~$300 billion). Yet, current investments have been relatively limited, amounting to ~1% of the estimated market size. This discrepancy between enormous potential and limited investment is reflected in the portfolios of several philanthropies. In one corner, the Mulago Foundation, a private foundation focused on improving the lives of the poorest people in the world, has worked to incorporate impact investing. The result? It has only been the “right answer” for 5% of its total portfolio. Kevin Starr, the foundation’s Managing Director discusses the reasons for this in “The Trouble With Impact Investing.” One reason: Very few investments that help the poor will give you a financial return on your investment, he says. In the other corner, two of the staunchest champions of impact investing, Jed Emerson and Antony Bugg-Levine, suggest that “impact investing is poised to disrupt the traditional systems that organize enterprises, investment, and charity” in their book Impact Investing. 
It has become an article of faith that the “boundaries are blurring” between nonprofits and companies, and that this is inarguably positive. But what we need, today, is a clarifying – not a blurring – of what differentiates the sectors. The proponents of boundary-blurring are often business school faculty, and they’ve been at it a while. Harvard Business School (HBS) Professor James Austin predicted, hopefully, more than a decade ago that, “We’ll see the stark differences between NPOs and business diminish, revealing a new world of integrated, rather than independent, sectors.” (Note: I feel compelled to say that I took a course with Professor Austin while a second-year student at HBS and he was among the best professors I had during my time there, but I disagree with him on this issue.) In a more recent report on trends in the nonprofit sector, LaPiana Consulting argues that “sector boundaries are blurring,” and that the emergence of the L3C, or low-profit liability company, is a harbinger of this trend. A 2010 Chronicle of Philanthropy article on “trends” in the nonprofit sector quotes experts who argue that the blurring of boundaries may make nonprofits “a vanishing breed.” 
The economy is in the tank and thousands of people are out of work. At the same time, the planet is dangerously heating up and ecological systems are declining. What are we to make of these troubles? Are they merely the result of poor policies? Or is something more fundamental at play? The roots of our difficulties are simple, yet for many business and political leaders completely hidden from view. The activities of most firms, and the goals and structure of the economy as a whole, have been shaped by fundamental misjudgments about how the planet functions and what it means to live a good life. To resolve today's challenges, our leaders must overcome the erroneous perspectives that created the predicament. At the most fundamental level, this requires moving from a "linear" way of thinking – where we focus on quickly fixing the most visibly broken parts of what isn't working – to a "systems" perspective that brings thought and behaviour into line with the natural laws of sustainability. Despite years of talk about systemic thinking, few companies or governments actually practice it. This is due, in part, to the lack of a simple framework to guide the implementation of a systems perspective. Tom Bird, Founder and President of Farm Capital Services, speaks to his involvement in a pair of activities within social impact and financial returns exclusively, as well as blended value. He reviews the allocation of, and how he envisions potential in, financial and intellectual capital. Finally, Tom shares lessons learned so you might decide for yourself whether 'leap before you look' should be your motto. 
GS to invest $40 billion in clean tech over next decade.
At Goldman Sachs, we are actively engaged in addressing environmental, social and governance issues every day, throughout our businesses. Sound governance and a responsible approach to social and environmental risks begins with our people. Our commitment to these values extends to the communities where we live and work. We strive to amplify our effectiveness by leveraging our core capabilities and through close collaboration with our stakeholders around the world. 
The context These poor families spend more than 15 dollars per month on energy. The BipBop programme: Business, Innovation & People at the Base of the Pyramid Schneider Electric has developed a sustainable programme to bring safe, clean electricity to the people who need it most worldwide. With the strong willingness to involve local communities and local stakeholders in each country, the BipBop programme addresses three key issues to provide sustainable access to electricity: 
Before the current fascination with celebrities, there were icons. Elvis. Brando. Buffett. Icons are celebrities for sure, but more significant and authentic -- enduring symbols representative of a movement or idea. The closest impact investing has to an icon is Tom Steyer, at least in the United States. Steyer is not an icon for the obvious reason of being a renowned impact investor. In fact, Steyer is not an impact investor at all. Taylor runs One PacificCoast Bank. Rather, Steyer is an icon because he represents the duality at the heart of impact investing; the challenge of bringing together mainstream investing on the one hand, and double- or triple-bottom line investing on the other. 
Target Rock Advisors, LLC today released the results of an analysis suggesting that the value of good sustainability policies and practices could be worth between $20-25 billion to utility investors. This first-of-a-kind estimate was based on a comparative analysis of the total returns over ten years for the 49 U.S.-domiciled utilities included in Target Rock's 2012 sustainability rankings and indexes, previously released on February 14, 2012. "Earlier this year, we demonstrated that as a group the stocks of utilities that scored highly in Target Rock's sustainability rankings outperformed companies with lower sustainability performance over the ten years ended December 31, 2011," stated Richard Rudden, chief executive at Target Rock. "Now, we have been able to place an estimate around the potential value that improved sustainability practices might bring to utility equities, and it is not insignificant. Our analysis makes another compelling case for sustainable and socially responsible investing in the utility sector."
A few electrons can go a long way. We have an insatiable appetite for new juice in industrialized economies: Energy use will likely double between 1990 and 2035, reports the Energy Information Administration. But in parts of the developing world, just getting any power to turn on the lights or charge a cell phone is the problem. Nearly one-fifth of the world will still be without electricity by 2030, while the number of “energy poor” stay virtually unchanged. That depressing statistic led to an idea that is bringing light and energy to rural villages once with neither. Solar microgrids are community-wide distributed power systems consisting of a few solar panels, batteries, wires, and poor yet paying customers. Whereas national power grids are monstrously complex and expensive, running into the trillions to build and maintain, microgrids can cost very little and be deployed in a few weeks or months. 
QUITO - Inter-American Development Bank President Luis Alberto Moreno yesterday called on firms to adopt innovative means for including disadvantaged people in the workforce and making them partners across the value chain. Moreno spoke during CSRAmericas 2012, the region’s leading annual event on corporate social responsibility. He also stressed the importance of innovation for developing growth models that do not rely on the intensive use of natural resources. |
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