About the WBCSD-SNV Alliance

In March 2006, the World Business Council for Sustainable Development (WBCSD) and SNV Netherlands Development Organization created a strategic Alliance to work together to address sustainable poverty alleviation through business-led initiatives across a number of Latin American countries (Bolivia, Chile, Colombia, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Peru).

Working through the local representatives of both organizations, the Alliance focuses on 3 areas of activity:

• Awareness raising of inclusive business models - negocios inclusivos in Spanish - that are both profitable and have a clear development benefit for the low-income segment. More specifically, inclusive business engages low-income communities across a company’s value chain – through direct employment; the development of suppliers, distributors and service providers from low-income communities; or through the innovative development and delivery of affordable goods and services that address unmet needs of low-income communities.
• Brokering of new business opportunities that benefit low-income communities in the target countries
• Advocacy to improve framework conditions for this type of inclusive business

Alliance results up to mid-2009

The Alliance, in close collaboration with the WBCSD's Regional Network partners, co-hosted a series of eight CEO led forums in each of the focus countries. These executive dialogues generated over 80 inclusive business ideas, of which some 40 are currently being implemented by the Alliance.

The opportunities currently being pursued include agricultural supply chain initiatives in Ecuador, creating 8,000 new jobs in the low-income segment and raising average incomes from less than US$ 2/day to about US$ 8/day; the improvement of the quality and traceability of coffee in Peru and Honduras; the expansion of the biofuels market across the region (liquefied petroleum gas for vehicles and biodigesters); and the development of microinsurance and mobile banking services in Bolivia. Overall, the 40 inclusive business initiatives have the potential to improve the livelihoods of some 400,000 low-income people.

Through this initial process the Alliance has worked directly with over 300 business leaders and cross-sector partners from across the region providing insight on networks, resources and opportunities on inclusive business strategies.

The innovative process has attracted the attention of a number of other organizations, including the Inter-American Development Bank (IDB), keen to promote and fund these initiatives, and with whom the Alliance has signed a memorandum of understanding in September 2007.

 

Many of the ideas generated are facing hurdles from the overall business environment and regulatory regime. The Alliance works with business and societal stakeholders at the national level to identify the critical challenges and develop common advocacy messages to address them in a collaborative manner. A significant success has been the Alliance's collaboration with the Ecuadorian government, which resulted in the concept of inclusive business being incorporated into the national public policy agenda with a target to create a quarter of a million new jobs and a commitment of some US$ 90 million in public funds to co-finance projects.

3 examples of inclusive businesses in their implementation phase

Examples of inclusive business opportunities currently being implemented include:

• Despite the success of microcredit in Bolivia, over 3 million people in Bolivia (roughly 65% of the economically active population) are excluded from microfinancial services because of high transaction costs. This is due to the absence of non-credit financial microservices, and other socio-cultural barriers. And unlike traditional banking, microfinance entities are not connected through information technology (IT) networks which would allow small transactions to be made using a bank card. In March 2007, the Alliance began to collaborate with Bolivian company Síntesis SA, an IT company specializing in online transactions, to fill this void. The Alliance and Síntesis SA are currently involved in designing a pilot project with the participation of microfinance institutions FIE (Private Financial Fund for the Promotion of Economic Initiatives), FADES (Foundation for Development Alternatives) and EcoFuturo. As a starting point, the partners will assess the banking habits of some 100 users of an innovative bank card over a three-month period. The project will monitor some 10,000 transactions made through portable point-of-sale devices, in four towns across Boliva as well as a remote rural area. The devices accepting the cards will be installed in petrol stations, mini-markets, hardware stores, and retail shops.
  
• The global coffee market is coming under increasing pressure to make improvements in quality and traceability. This is encouraging large export companies to engage directly with small producers. This in turn allows the small producers to benefit from cooperation with large companies that have access to secure sustainable markets, technical assistance and credit. In Peru, the Alliance identified Perales Huancaruna SA (PERHUSA), the country’s largest coffee exporter, as a good candidate for an inclusive business venture with local coffee producers. Following initial discussions, PERHUSA and the Alliance signed an agreement aimed at strengthening the ties between the company and small producers. Having started in mid-2006, this cooperation is expected to increase income – driven by a higher price and quality of the produce and greater technical assistance – for over 3,000 coffee-producing families in the Amazon, Cajamarca and San Martín regions.
  
• Corporación Dinant is a leading agribusiness company in Central America. Its activities include the production, industrialization and export of fruit and vegetables, oils and other foodstuffs. Looking to the future, Dinant has started to produce biodiesel from African palm and is gearing up to produce it from jatropha curcas. This energy crop has low water requirements and grows in low-fertility soils. However, it requires intensive manpower, providing excellent opportunities for job creation in rural areas. The WBCSD-SNV Alliance, in collaboration with the Honduran Business Council for Sustainable Development (CEHDES), is working with Dinant to set up an inclusive business which will involve 2,000 small producers from the Comayagua region in the production and commercialization of the jatropha seed.

Alliance brochure & video on "Inclusive Business - profitable business for successful development"

• Published in early 2008, the brochure (pdf, 20 pages) introduces the concept of inclusive business and presents the Alliance's work program across Latin America, including examples of the initiatives being pursued.
• In April 2008, the Alliance published a 10-minute video laying out its vision, presenting two inclusive business initiatives being implemented in Peru and Ecuador, and featureing the advocacy work being pursued to improve framework conditions for this type of business. A Spanish version of this video will be available by mid-May 2008.

Forthcoming activities:

The WBCSD and SNV are exploring how best to build on their successful Alliance in Latin America to expand the uptake of inclusive business by kick-starting activities in Asia, Africa and the Middle East. Furthermore, the Alliance is currently working on a publication profiling its achievements in Latin America over its 3 year history. The publication will also capture best practices, key learnings and success factors, as well as core messages to the business community, governments and development agencies.

Contact points for the Alliance's work

• Filippo Veglio, Deputy Director, WBCSD Development Focus Area, +41 22 839 31 08 
• Robert de Jongh, Regional Director, Latin America, SNV Netherlands Development Organization, +593 2 223 2021