Sahba Sobhani, Program Manager, and Austine Gasnier, Research Associate at the Growing Inclusive Markets Initiative of the United Nations Development Program (UNDP) recently wrote an article titled The Poverty and Environment Nexus: A Business Opportunity?, in which they highlight inclusive business models that contribute to both human development and environmental sustainability. They showcase examples in the domains of water provision, energy generation, agriculture, recycling, and tourism.
Their article also underlines that grasping these business opportunities “is difficult due to numerous market constraints, such as limited market information, inadequate infrastructure, ineffective regulatory frameworks, missing knowledge and skills, or restricted access to financial services.” Entrepreneurs have found successful strategies to overcome these constraints by adapting their products, investing in infrastructure and education, leveraging the strengths of the poor, combining resources and capabilities with others, or engaging with governments. But Sobhani and Gasnier rightly argue that “further research is needed to get a better understanding of how economic, social and environmental value is created and distributed, and what results can inclusive business models generate.”
This is precisely one of the focuses of the second phase of the Growing Inclusive Markets Initiative, a multi-stakeholder research and advocacy platform led by UNDP that seeks to promote greater inclusion of poor people in markets of goods and services as consumers, producers and employees. The initiative’s main contribution is to create a climate in which intermediary institutions can make markets more inclusive by gathering relevant information, highlighting good examples, developing tools to support business and market development strategies, and creating space for dialogue at both the global and local level. Its 2008 flagship report, Creating Value for All – Strategies for Doing Business with the Poor, was based on empirical evidence from 50 specially commissioned case studies of inclusive business models across regions, sectors and types of companies. The report analyses constraints and strategies for companies to expand beyond traditional business practices and bring in the poor as partners in wealth creation. A number of these case studies feature companies that have developed financially sustainable business models with significant environmental benefits.
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