ETHICS OF THE ECO-INCLUSIVE BUSINESS MODELS

Maria Saenko
BMN 171

Abraham Lincoln once said: “You cannot escape the responsibility of tomorrow by evading
it today”.

I consider this statement to be relevant to the modern business world. In a term of capitalism, big
companies are aiming mostly on higher profits, not on people’s and environmental wealthness. This creates
a conflict between a need of making money, adding value to its’ shareholders and creating a general wealth
for the society: and that is where ethics should step in.

According to the OECD by 2050, the Earth’s population would be around 9 billion and it is predicted that the
global economy will become almost four times bigger, which will lead to an increase in the demand for
energy and natural resources. Thus, global greenhouse gas (GHG) emissions are expected to increase by
50% and the average temperature will increase to 3-6C.

Biodiversity loss will be the most important consequence of climate change, its decline threatens human
well-being, particularly for the rural poor neighborhoods, who’s living usually depend mostly on resources
and environment. Since our resources are exhaustible, I strongly believe that it could not last long. So not
to have terrible and uncorrectable consequences in future, all businesses should start being responsible,
taking into account more than just making money.

Income indicators (such as income per capita) have a clear correlation with the emissions. However, the
most affected group are the people from the developing countries. Hence, the question of a distributive
justice should be raised here: the benefits and burdens are not distributed fairly. People from low-income
communities are clearly having less advantages and more consequences from the industrial growth and, as
a result of it, higher carbon emissions. Poverty, low-level development, high usage of the natural resources,
dependence on financing from the developed countries and low-educational index are the reasons. Only
with a shift from these problems the crucial impact from the climate change for the low-income societies
could be reduced. One of the important tools of the poverty fight is an inclusive business: it is a sustainable
business that benefits low-income communities. It is takes into account not just business’ commerce
nature, but also commits to the poverty reduction. In other words, the main goal is to discovery effective
ways of engaging the poor in such a way that it benefits low-income communities and creates sustainable
living. Good examples of it could be: employing low-income people; supporting the development of the
suppliers from low-income segment and creating affordable products. However just interacting with the
poor in the business terms is not enough to have a clear impact on the global level of emissions: many
corporations are having factories in the developing countries with insufficient eco-friendly measures, which
create workplaces, but do not provide abiquade level of environmental safety. The consequences of having
such business are very near and clear, such as climate change, for instance, which is already becoming
real. So, speaking from the consequentialism point of view it is becoming clear that something should be
changed. That is why eco inclusive business should step in and change the business game.

Eco-inclusive business includes poor people into its value chain to provide them benefits just as
implements effective carbon-reduction solutions for them and improves the environmental footprint in
general. Low-carbon policy is not a new thing nowadays, however often it targets only large projects, which
have a modest impact on people from the low-income groups. There are many sustainable and eco-friendly
business, which successfully operate but mostly in developed countries. One has to understand here these
models could not be just implemented to the low-income communities, the green strategies must be
adapted to the specific circumstances of the country. This creates the need to design new eco friendly
business models that will be adjusted for the poor.

The key factor here is the synergy between eco-issues and poverty fight, only if those two factors are
working on together, there could be a shift. A great example here could be an energy usage improvement
in rural and poor areas. Only a very limited number of people from the low-income communities are having

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efficient and environmentally friendly sources of energy, such as solar energy or even electricity. Mostly
people are using coal or kerosene, leaving a remarkable footprint in the environment. Not moving from the
basic agrarian over-usage of the natural limited resources could cost us a terrible environmental
consequence.

One has to distinguish here that it is not poor’s people fault and they are not those who should be blamed
for it. Usually businesses in the developing countries are striving for the profits regardless many ethical
norms. It happens mostly because of the overall poverty level and has a connection with Maslow’s
Pyramid. When the basic needs of the people (like hunger) are not satisfied, because of the poverty and
insufficient living level, people care less about the ethics.

Companies, which follow not only profit philosophy, could be called responsible, sustainable and inclusive.
They do not just produce things or offer services, they are trying to make the world better with every dollar
earned. These corporation are working to reduce mass waste and destruction, which used to be the
consequences of the capitalism. Our world is rapidly changing, I see innovations, as the chance of the
changing the business game, so the new eco-inclusive business models, in my opinion, are the best ethical
way to improve the current business impact and should definitely be part of the global plan towards more
eco-friendly economy.

At the beginning I have mentioned the conflict, that modern companies are facing now, while they have to
choose between the profit-aiming nature and sustainability. Ethics should become a solution in such cases.
When implementing various ethical theories and analyzing the problem and potential consequences – the
answer on how to make a better ethical decision could be gotten. Business ethics is a crucial tool in the
decision making, as a way to understand is something in business worth doing or not.

I see eco-inclusive business as a great moral solution for the capitalistic consequences case. Its models
could be also analyzed with the business ethics, which I am going to do further. Since nowadays most of
the money and power are in the arms of the businesses, it’s in their will to help the planet and change the
business game. The best theory that could be applied here is Utilitarianism, which is a form of
consequentialism and is one of the most influential moral theories.  

Broadly the interpretation of the eco inclusive business’ case in utilitarian point of view is quite easy: due to
the climate change degree reduction – more people become happier in general, because it has an
influence on everyone’s lives; poor people become happier, due to the poverty reduction and their living
level increasement; however, there could be those who will suffer in case of the eco-inclusive models –the
shareholders, for instance, but only in the short-run. It usually requests more investments at the beginning
and possibility of declining incomes for the first time. This issue has to do with financial bias – when
shareholders care only about the profits and become unhappy if their value is not added. However, it is a
usual thing, new ideas in business require more investments, but also give the better pay off after some
time.

Stated what the eco-inclusive business is and why is it so crucial, I would like to look at some models in
more detailed and closer way and analyze them from the ethical point of view.

However, firstly I would like to introduce a ”SEED”, according to the information on their official webpage, it
is a global partnership for action on sustainable development and the green economy. They promote
creative innovational thinking in business, innovational solutions and support for the environment.
Moreover, SEED is having a set of programs, called “Direct Enterprise Support” and “Ecosystem Building”,
in which they are working on developing more eco inclusive businesses. Almost all of the examples, that
we will look at further, are from any of these
programs and successfully exist in the real
life.
There are no common business models for
such type of business, everyone is unique,
because of its need to be adjusted to the
special circumstances. Nevertheless, there’re
some similarities and common things that can
be divided into the groups. The first big group

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of the eco-inclusive that I would like to consider are businesses working with “Rematilization”. Basically,
these firms are trying to reduce the massive waste, by creating a business directly connected with
“garbage”, usually they use plastic, paper and other materials, that could be recycled. It also refers to the
Circular Economy, which is an example of doing business ethically and sustainably.
The first real life example is 21st Century Initiatives – a company operating in the Accra, Ghana, which
creates eco-plants and eco-pillows from the plastic, collects different plastic waste, compresses it and resell
to numerous recycling companies. They make wonderful, enduring and eco friendly flowers and plants from
this plastic, serving recycling companies, hotels, restaurants, churches and many other. Another example
of the inclusive business, that follows zero-waste philosophy is “People of the sun” from Blantyre, Malawi.
They produce handcraft homeware goods only from the recycled materials (like paper or glass), which
were found locally, and have a lot of partners with different well-
known designers. “People of the sun” turn out social advantages for
the native communities and sell their distinctive product.
The overall benefits of companies, that are the part of the
Rematilization business model, are more than clear:

 It creates a better, cleaner environment and reduces

pollution. It basically reduces the consequences of the
businesses that do not care about the ecology, by recycling
the materials.
 Creates a workplace for people in Ghana and Malawi (which
are known as, developing low-living standard countries), increasing the income level and overall tax
for the countries’ development.
 It also strengthening the cooperation level between poor communities and more developed world,
through the network building.

About the ethical side of this type of business: all of the actors here a having an advantage, which I have
listed above. There is no power abuse, all of employees are treated fairly and those companies are
constantly getting checked and receiving support from the “Seed”. They cooperate with various
stakeholders, international organization and environmental enterprises. As Charles Darvin, with his theory
of Evolution, stated- “Cooperation leads to such development of mental abilities and moral qualities,
which provides the best chances of survival”; Cooperation is an act of working or acting together for a
common purpose or benefit and it’s one of the ethical ways of the collaboration, which is provided in such
type of businesses.

Another big group

of eco-inclusive
businesses that I
would like to point
out is businesses
trying to protect
Biodiversity. Muthi
Futhi is an
innovative business
from Pinetown,
South Africa,
cultivates and selects autochthonous medicative plants. It
is not only providing communities with jobs opportunities for the marginalized women, but also use only
organic methods of cultivation, protecting rare plants from the vanishing. Muthi Futhi has partnership with
many companies inside the Africa and overseas. One more company that contributes to biodiversity Muliru
Farmers, Nairobi, Kenya. Its idea is similar to the Muthi Futhi’s, it also cultivates herbs in sustainable and
organic way. The main plant that is cultivated here is Ocimum kilimandscharicum, and its properties were
discovered only due to the interaction of the local rural communities’ knowledge and scientific research that
was made. This company cares about saving biodiversity and gives a chance for the poor people to be
engaged in income generation in sustainable way.

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The companies working towards saving biodiversity in the rural areas is a reflection of a case “where
corporations see themselves, as the stakeholder of the problem, not as the center of the network of
stakeholders” (Andrew Crane, York University). They are creating a better sustainable world for all of us,
creating permanent jobs for the woman in the poor areas, supports the local communities (Muthi Futhi
donates 50% of the profits to the community) and creates awareness about the environmental situation
among the members.

The third group of the eco-inclusive models I have considered to be companies working towards
sustainable energy and green innovations. Sahelia Solar
could be a great representative of this group. They are working
in Rural Burkina Faso, Burkina Faso, creating and providing
fair, low-budget sustainable energy for autonomous agro-
factories. It has built up an innovative way of the solar energy,
providing it at a 30% lower price than less green energy,
making local farming more competitive and heavily reduces
carbon emissions.
One more real-life
example is
Mozambikes from the Maputo, Mozambique. They sell high
quality bikes that were made locally as an alternative way of
transport for a really low price. Making bikes affordable for
everyone is possible, because those bikes are used like
moving ads, with placement on its cases. Furthermore,
Mozambikes do not only sell bikes but also provide trainings
for women on bike-riding and possibility for them to generate
income through selling baskets for the bikes. They are fighting
with climate change via replacing usual means of transport
with the eco-friendly bikes, thus reducing the emissions.

Speaking about the ethics of this type of the eco-inclusive business I would like to apply the Categorical
Imperative theory (by Im. Kant) and ask a question – “what if it becomes a universal law?”. Well, if
replacing outdated and non-ecological technologies with greener alternatives and finding creative solutions
for the environmental problems would be a universal law, our world would only become better! We won’t be
struggling with climate change and many other eco-problems. However, there would be some negative
consequences as well: many people from those industries would probably lose a job and there would be a
need for people to adjust for a new technology, which could be difficult for some of them. Anyway, in my
opinion this world would be successful and there could be a solution for every negative consequence listed:
people from the non-eco-friendly industries could be re-educated and employed to the better and greener
ones and also the trainings for everyone who is needed, could be provided.

All the way through I have been proving that Eco-Inclusive Business is ethical and is a great moral solution
for the current business-as-usual situation, and it is not easy to prove the opposite. Nevertheless, there are
some circumstances that should be also taken into account.
First of all, there are some barriers of implementing such a business: if it is done from outside of the local
community, it could be hard to get an access to the information needed. It is very important to understand
that every eco-inclusive business model should be perfectly fitted and adjusted to the current community,
unless it won’t succeed and won’t be profitable. Thus, sometimes a big investment is required for the
company at the beginning to make a market and community research. If those business are done with the
idea from the low-income community itself, it usually needs an investment from outside, which could be
risky. The crucial thing here that even if eco-inclusive business is producing impact along the triple bottom
line, including social, environmental and economic benefits, it is still a real business not a charity
organization and its aim to generate income, thus if it is unprofitable, it won’t work. Nonetheless, it was
proved
in the research maid in the book (Firms of Endearment: How World Class Companies Profit from Passion
and Purpose, Raj Sisodia, David B. Wolfe, Jag Sheth) that conscious companies generate more income
due to the people’s raising awareness about the sustainability.
Moreover, there could be a bias of some companies, being afraid that their small effort won’t change
anything. They believe that they are not able to make any shift. This point of view is wrong in its roots.

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Every effort, every step to the better world is crucial, even if it’s not immediately noticeable, it’s a significant
contribution to the better tomorrow.

And at last but not at least, cooperation is the key factor of the success and it could be not that easy.
Cooperating with people from the poor communities could be challenging, but it is an essential step and as
Charles Darvin wrote in his The Descent of Man (1874), “Those communities, which included the
greatest number of the most sympathetic members would flourish best…”.

As I have already written I see eco-inclusive business, as a right moral and ethical solution, which is having
many positive consequences, such as improving the overall living standard, current eco-situation and
generating income; while the negative consequences are minor and could be solved. One of pioneers of
the environmental ethics Aldo Leopold wrote in his - “Now we face the question whether a higher
“standard of living” is worth the cost in things natural, wild and free.” I believe that Eco-Inclusive
business is a solution when humanity do not have to choose from those things any more. People, as the
part of corporations, standing for something bigger, something better, are the main power of changing the
world.

BIBLIOGRAPHY
All of the pictures were taken from the
"Seed". (n.d.). Seed enterprises. Retrieved from https://seed.uno/enterprises
Darvin, C. (1874). The Descent of Man.
Leopold, A. (1886-1948). A Sand County Almanac.
OECD. (2012). INCLUSIVE GREEN GROWTH: FOR THE FUTURE WE WANT.
Seed, & Endeva. (2016). Replicating Eco-Inclusive Business Models.