The Business Case for Development

October 11, 2012

No doubt, a growing number of companies are tackling social and environmental issues in emerging markets. But what’s the most effective path to success?

During BCLC’s CSR: Business Solutions for Emerging Markets Conference, a panel of corporate and government officials held a lively discussion on the strategic benefits of the Business Case for Development. In other words, integrating CSR investments to support an organization’s core business.

Following such a path presents any number of internal and external challenges, but the convergence of business objectives and global development objectives can lead to stronger, more sustainable solutions.

“These emerging markets are key for multinational corporations,” said Raj Kumar, co-founder and president of Devex and moderator of the panel. “It’s where their new customers are, it’s where the workers are, and it’s where they will find the greatest opportunities for growth.”

In Nigeria, for example, Chevron launched the Niger Delta Partnership Initiative (NDPI) in 2010 in partnership with local and international organizations. The following year, NDPI helped analyze potential high-growth commodities in the Delta, identifying cassava, palm oil, and farm-raised catfish as the best prospects.

The initial pilots are focused on fish farming with various associations and cooperatives operating from a cluster of more than 3,600 ponds across the Delta. This early success clearly shows the potential for not only increasing its own operating efficiency, but also enhancing the enabling environment in which it is working.

“What Chevron’s done,” said panelist Jeri Jenson, principal at Business Driven Development LLC, “is to help develop an agricultural supply chain that has created jobs beyond oil and gas and made it easier for them to operate their own business in that region of the country.”

Companies from diverse industries have crossed this Rubicon of operating with a business case for development. Agriculture, energy, consumer goods, and financial services companies are among the early adopters. Multi-national companies both large and small have taken the first steps toward implementation, as have companies from Africa and Europe.

Working side-by-side with these companies are partners such as the United States Agency for International Development (USAID). Eric Postel, USAID assistant administrator for the Bureau of Economic Growth, Education and Environment, said that his agency now manages more than 1,000 partnerships with private sector companies, which is creating a shifting dynamic in the development world’s macro environment.

“As an agency we are more closely tied to the core issues of business,” he said. “We’re more in tune with company objectives and are looking for opportunities to integrate companies more effectively in development discussions.”

Still, obstacles remain that keep more companies from seeing the business case for development. “For some, difficulty in finding an entry point is holding them back,” said panelist Katherine Pickus, divisional vice president, global citizenship policy at Abbott and vice president of the Abbott Fund. “Others need to discover that their old play books are not relevant in these new markets. We realized early on that we needed to improve access to our products, which led us to re-examine our entire value chain and find opportunity in each locale.”

While panelists conceded that there are no shortcuts to success, Merryl Burpoe, director of stakeholder management at the AES Corporation, outlined several steps she’s successfully used in the past. Her key steps are:

  • Develop a project that leads to policy or market change
  • Identify all the relevant players up front
  • Focus your attention to maximize impact
  • Determine who is in on the project design (include all stakeholders)
  • Define the project timeline (Nothing more than two years)
  • Focus on what’s important to the target audience
  • Always think about what’s coming next, how we move this forward

Movement is taking place toward stronger alignment between a company’s CSR strategy and its core business objectives. We are witnessing a moment of change. The corporate community is finding an entrepreneurial spirit in shifting out of its traditional CSR paradigm, the donor community is more willing than ever to embrace the value the business sector provides, and government agencies better understand the importance of business partners in solving complex social issues globally.

What’s the business case for development? It works!