WBCSD-SNV Alliance: Creating inclusive business opportunities by linking local communities with big business

BASF Grameen Ltd.: promoting better nutrition and protection against insect-borne disease in Bangladesh

A few days ago, BASF SE and Grameen Healthcare Trust announced the establishment of a joint social business venture called BASF Grameen Ltd., aimed at improving the health and business opportunities of low-income communities in Bangladesh. BASF Grameen Ltd. will start by utilizing two products from BASF’s portfolio: dietary supplement sachets containing vitamins and micronutrients, and impregnated mosquito nets that offer protection against insect-borne disease.

Social business is a new business model for BASF, the world’s leading chemical company. The idea is for a business venture to serve a social purpose, cover its own costs and recoup the partners’ initial investment. Any additional profits are reinvested fully in the company. “Our social business joint venture is intended to empower people to take part successfully in business life,” said Dr. Jürgen Hambrecht, Chairman of the Board of Executive Directors of BASF SE, upon signing the agreement with Dr. Muhammad Yunus, Nobel Peace Prize Laureate and Managing Director of Grameen Bank (see picture above). “The more people who do so – be they business partners, customers or employees – the better the economic and social development of a country and its population.”

The Role of the Utilities Sector in Expanding Economic Opportunity

How do multinational utilities companies in the water, sanitation, and electricity domains currently participate in expanding economic opportunities in developing countries? A report (pdf, 40 pages) published by the Harvard University's Kennedy School of Government  provides an overview and critical assessment on this topic.

The report argues that utilities firms play an integral role in creating wealth in both the developed and developing worlds. Water and sanitation, for instance, are fundamental to human sustenance, health and dignity, and by extension to economic opportunity. Affordable and reliable energy is integral to household productivity and the development of most industries, from agriculture to finance to health care to communications.

The central premise of the report is that companies’ most significant contributions to expanding economic opportunity come from their core, profit-making business activities along with the multiplier effects they engender. This is clearly the case in the utilities sector, where providing safe, affordable water, sanitation, and electricity is the firms’ core competence but also the most valuable thing they can do to enable human and economic development.

The Role of the Health Care Sector in Expanding Economic Opportunity

A report (pdf, 48 pages) published by the Harvard Kennedy School and FSG Social Impact Advisors provides an overview and critical assessment of the ways in which multinational pharmaceutical companies currently participate in expanding economic opportunities in developing countries.

The report concludes that, due to its nature, the pharmaceutical industry is unique in the ways it creates economic opportunity. The industry is not well positioned to directly provide large-scale employment in developing countries since many parts of the pharmaceutical value chain only require a small number of well-educated workers. Moreover, the markets that multinational pharmaceuticals target are fairly restricted to developed countries, limiting the scale of employment in emerging markets. Finally, the core competencies of pharma companies lie in expanding access to medicine and health care.