Environment & Poverty Times


06 2009


UNEP/GRID-Arendal


12 13


Sulabh’s coin‐operated toilet facilities provide low‐cost sanitation to poor consumers. Sulabh.


energy generation, agriculture, recycling, or tourism (see examples below). They show that commercial success, environmental sustainability and poverty alleviation can go hand-in-hand, although many constraints specific to the markets of the poor stand in the way. Innovative strategies are therefore needed to overcome these market constraints and develop successful models.


Technology, for instance, can help companies to do business under difficult conditions and more sustainably. For example renewable en- ergy sources can generate electricity for the 1.6 billion people who still lack access to it without exerting further stress on the world’s climate. Clean sanitation technology is a sustainable and cost-effective alternative for low-income population. Biodigesters can transform waste from pig farming into energy, food for fish breeding and biofertilizers. Business models adaptations, such as sourcing from local communities or deploying recycling, are ad- ditional ways for businesses to contribute to environmental sustainability.


Providing cleaner energy In Mali, where only 10% of the population has access to electricity, the rural energy service companies set up by Electricité de France and its partners are providing elec- tricity to underserved rural areas through so- lar home systems and diesel generators. The elimination of kerosene lamps has improved indoor air quality. In addition solar systems and generators – which might be replaced by biofuels in the future – save respectively around 95% and 85% of CO2 emissions compared to traditional energy sources. The companies are already breaking even and profits are expected to reach 12 to 15%. At the same time the service will generate a significant human development impact for the 40,000 people currently being served, improving their ability to pump water for livestock and electrifying healthcare centres, schools and small businesses, with over 50 new local jobs and economic spin-offs.


Promoting ecologically-friendly tourism In Egypt, Environmental Quality Interna-


tional (EQI), a Cairo-based consultancy, has implemented the Siwa Sustainable Devel- opment Initiative, with a portfolio of enter- prises and projects that include eco-lodges, women’s artisanship, organic farming and community art, all of which contribute to revitalizing cultural heritage and nourishing ecologically-friendly tourism. EQI is also implementing a renewable energy initiative that uses biogas digesters to produce biofuel for lighting and cooking, as well as organic fertilizers. It also contributes to prevention of water depletion and further deterioration of soil resources, and raises staff aware- ness of environmental conservation. These initiatives have created 75 direct jobs and income-generating opportunities for over 300 members of the local community, while generating a profit, partly used to support local entrepreneurship and enhance living standards for the poor through the provision of financial services, as well as the construc- tion of a cinema and library.


Improving Sanitation Systems It is estimated that 2.6 billion people lack adequate sanitation around the world. In India, Sulabh International, a local NGO, has developed a commercially viable business model, training 60,000 poor people, mostly women. Sulabh employed low-cost sanitation technology using locally available materials to design environmentally-friendly toilets that require little water for flushing. By 2006 Sulabh had installed 1.4 million household toilets and maintained 6,500 public pay- to-use toilets, with an estimated 10 million people using the facilities across the country. Most of the public toilets run by Sulabh break even in eight to nine months, and some are highly profitable. In 2005 Sulabh’s revenues reached $32 million, with a 15% surplus reinvested in social programmes.


Using forest biodiversity sustainably In 2000 the Huatai Paper Company Ltd, the largest newsprint manufacturer in China, launched a new strategy to substitute wood pulp for straw pulp. Paper production from wood pulp reduces the amount of pollutants six to seven-fold and does not require chlo-


Towards triple impact. Toolbox for analysing sustainable ventures


Sustainable ventures can make a significant contribution to poverty alleviation and environ- mental sustainability. These business initiatives and activities improve human well-being and the environment on a profitable basis (people, planet, profit), contributing to decoupling economic growth and improvements in well-being from natural resource use.


Developing and managing sustainable ventures is a challenge. Key questions related to the identification of opportunities, the understanding of the determinants of success and the assessment of costs and benefits appear repeatedly.


The UNEP publication, Towards triple impact. Toolbox for analysing sustainable ventures in developing countries, introduces a toolbox that helps to answer such questions. It addresses initiatives that support sustainable ventures including donor programmes, award schemes, private and public investors, professional education programmes and policy makers. They can use the tools to systematically identify, evaluate, advice, and promote sustainable ventures.


The toolbox can be downloaded in English, Spanish and French from www.unep.fr/scp/pov- erty/publications. Publisher: UNEP


“Central Forest”, one of Huatai’s fast‐growing trees model districts, covering about 60 hectares. Huatai.


rine for bleaching. The key was mobilizing local farmers to plant fast-growing trees. Farmers get support through technology, education and irrigation from Huatai and the local government, convinced by the company about the potential win-win nature of this initiative. About 6,000 households have taken part, planting 40,000 hectares of fast-growing trees and generating a sig- nificant new source of income. The triploid white poplar trees grow on formerly unused salty land. Meanwhile, Huatai has grown its newsprint business and is minimizing the risk from volatile import prices for pulp.


Investing in the recycling industry Together with water and sanitation sys- tems, or electricity grids, waste collection is often part of the missing infrastructure that characterizes the markets of the poor. With about 85,000 tonnes of waste gener- ated every day, Mexico is the tenth largest garbage producer in the world. At the same time, tens of thousands of people, including children, are making a living by scavenging saleable items from open-air dumps in very tough, informal conditions. The founders of the Petstar company saw an opportunity in this challenging situation. They realised value could be added to the plastic collected, by closing the recycling value chain, linking the scavengers to the bottling industry. They built the first bottle-to-bottle recycling facil- ity with high-tech automated machinery in Latin America. This innovative project will improve the scavengers’ working conditions by creating separation centres and offering formal contracts. It will also reduce child labour through specially created community education centres, and increase social aware- ness of the importance of recycling through organized visits to the recycling plant. Last but not least it will yield returns for the company through the sale of the recycled material.


In Philippines, CocoTech, thanks to a fruitful collaboration with a government research institute, managed to turn the challenge of waste into a real business opportunity by converting unused coconut husks into a whole range of environmentally-friendly


products such as coco pots, pot liners, grow poles, brushes and rope, while producing a strong social impact on the local community which processes them. CocoTech grew from a small community-based project with an initial capitalization of about US$7,000 and five employees in 1993 into a medium-sized enterprise of 25 employees with revenues exceeding US$300,000 in 2006 and more than 6,000 families involved in the manu- facture of CocoTech products.


Evidence from the field reveals that there is a lot of untapped potential for companies willing to develop business models that have positive impacts on the bottom line, the lives of the poor and the environment simultaneously. However, grasping this opportunity 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. And yet, as the case stud- ies show, entrepreneurs have found success- ful strategies to overcome these constraints, from adapting their products (Sulabh), to investing in infrastructure and education (PETSTAR), leveraging the strengths of the poor (EQI), combining resources and capa- bilities with others (CocoTech), or engaging with governments (Huatai).


However, 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 will therefore be one of the focuses of the second phase of the Growing Inclusive Markets Initiative and its next set of case studies currently be- ing commissioned with a view to highlight good practices, share lessons learnt, and thus encourage the private sector to action.


About the author: Sahba Sobhani is a Pro- gramme Manager, and Austine Gasnier is a Research Associate at Growing Inclusive Markets Initiative, UNDP. The views expressed in this paper are the authors’ and do not necessarily represent those of the United Nations Develop- ment Programme.


Green Jobs: Towards decent work in a sustainable, low-carbon world, by the Worldwatch Institute (2008)


This report by the Worldwatch Institute has been commissioned and funded by UNEP, as part of the joint UNEP, ILO, IOE, ITUC Green Jobs Initiative. The report is the first compre- hensive study on the emergence of a “green economy” and its impact on the world of work. It includes new data that shows a changing pattern of employment in which green jobs are being generated in many sectors and economies around the world as a result of measures to tackle climate change and reduce greenhouse gas emissions. This has also led to changing patterns of investment flows into areas such as renewable energy and energy efficiency at the household and industrial level. Within current policy frameworks, only a fraction of the potential benefits for jobs and development is forthcoming.


The Report is available for download (English & Chinese) at www.unep.org/civil_society/Publi- cations/index.asp and www.unep.org/labour_environment/features/greenjobs.asp. Publisher: UNEP EP 8-08 #200763569


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