In their final communique of 2015, the leaders of the G20 recognised inclusive business as an important tool in achieving the new sustainable development agenda. In doing so, they presented a comprehensive framework (pdf) for governments and the private sector to support and expand inclusive business. The group held its final meeting of the year on 15-16 November in Antalya, Turkey.
“We are firm in our resolve to ensure growth is robust and inclusive, and delivers more and better quality jobs”, the leaders said in their communique. “Advancing inclusive growth and entrenching confidence require the use of all policy tools and strong engagement with all stakeholders.”
The framework presents options for governments, companies and international financial institutions to promote and support inclusive business in four core policy areas. These options can be adapted to meet the unique needs of individual countries, including those outside the G20. They include: establishing an enabling environment; enhancing financial resources and providing financial incentives; providing information and raising awareness at all market levels; and enhancing the capacity of both inclusive businesses and people at the base of the economic pyramid.
The framework drew on the case studies of inclusive businesses from a cross-section of industries. These case studies included a number of members of the Business Call to Action (BCtA), each showing how inclusive businesses are “expanding markets and helping tackle poverty, generating commercial returns and advancing development”.
L’Occitane en Provence (L’Occitane), the French multinational cosmetics firm, is one of the largest buyers of shea butter in Burkina Faso. Through its inclusive business model, the company is buying directly from five cooperatives of women representing more than 17,000 women in 10 provinces across the country. In 2011, L’Occitane bought more than 500 tonnes of shea butter, which directly benefitted the women producers and indirectly benefitted up to 200,000 people through benefits to household members and jobs created.
BCtA member Itaú Unibanco (pdf) is one of the largest multinational financial corporations in the southern hemisphere and the largest bank in Brazil, where the informal economy represents 16% of the country’s GDP. As of 2014, Itaú’s microcredit business was serving 100,000 micro entrepreneurs, and has an active loan portfolio in this market segment of R$350m (£60m).
Bridging the digital divide is an important goal of the SDGs. TTNET (pdf), Turkey’s leading internet service provider, is providing access to 30,000 households with access to an online platform which provides educational content targeted at primary and secondary-school children in remote areas of the country.
In Kenya, cook stove manufacturer Envirofit has partnered with Kaluworks, a leading provider of cookware – to improve production, supply chain, business development and increase sustainable revenue. To date, Envirofit has sold more than 850,000 stoves across Africa, Asia and Latin America. The company assists its customers in obtaining microfinance loans in order to pay for the stoves, but also estimates that the stoves “pay for themselves” in fuel and time cost savings within six months.
These are some of the successful BCtA member inclusive business models that supported the development the G20 framework. Other members include Hapinoy, Novartis, Cemex Patrimonio Hoy, and Phillips Healthcare Services Ltd (all pdfs).
“Inclusive business approaches go beyond corporate social responsibility, philanthropy and impact investing by connecting poor people to markets,” said Magdy Martínez-Solimán, UNDP assistant administrator and director of bureau for policy and programme support. “They encompass business approaches that directly improve the lives of poor people by making them a part of companies’ value chains as suppliers, distributors, retailers and customers.”
Content on this page is paid for and provided by Business Call to Action, sponsor of the role of business in development hub
