24 abril 2014

Could companies be genuinely interested in equality or is just marketing?

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judith_02

At one point in my development career I faced the challenge of actively including the private sector in every community-level development operation in my portfolio. What started as a requirement became a passion. In part, because companies brought important know-how in business development, economic development and job creation – primary concerns of disadvantaged communities.

A job or a long-term relationship with a stable client wasn’t just a source of income, for many it represented a sense of economic empowerment and belonging to society. This was particularly true for members of vulnerable ethnic groups and women.

Companies focus on profits because of their shareholders. In order to make sure that equality based initiatives do not get cut in lean times, concepts such as shared value or advancing economic and social conditions through investments in policies that are beneficial for both businesses and communities should be aggressively promoted where there is evidence that there is a clear and proven business case. There is a growing body of evidence that doing good strengthens the bottom line whether it is through better corporate decision making mechanisms or making companies more resilient to economic crisis (my colleague Sanola Daley has explained it in a previous blog, but you can see more examples here and here).

IDB-developed shared value appraisals help make the business case for equality by showing how gender and ethnicity can potentially improve profits in sectors as diverse as agribusiness, ports, and higher education. The most recent shared value case, from the Universidad San Ignacio de Loyola (USIL) in Peru, proposes to increase the number of deserving and qualified indigenous, Afro-Peruvian and female students who would otherwise be unable to attend college due to external financial pressures and social exclusion, by demonstrating that these students are indeed a good investment. To learn more about this operation see the recent blog post by Bettina Boekle-Guiffrida or watch this video.

Certain industries are able to innovate or overcome business challenges by equitably involving local communities as producers, suppliers, or workers. Several strong examples of this that I have seen in my career include an international truck manufacturer in Brazil that incorporated grassroots indigenous and African descendant communities in the supply chain, and an electric plant in Peru supported by the private sector of the IDB that employs a local recycling cooperative to remove and recycle waste that was damaging turbines and halting production.

Discovering innovative ways for generating profits from equality may indeed prove to be one of the most sustainable private sector approaches – and the way to move gender and ethnic equality into the boardroom and the core business where CEOs and CFOs discuss equality, not just marketing professionals and human resources staff.

So, answering my initial question, yes, companies can and should be interested in equality. One of the ways of doing this is through shared value, which is a way to integrate local communities as partners in the core business objectives of firms. It is particularly appealing because it positively impacts the bottom line of companies, and therefore has greater chances of being continued and expanded in the medium and long-term.

Do you know if the companies you are familiar with promote shared value? How many times have you noticed a potential business solution or opportunity that it based in promoting greater equality in society?

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