Market Movers
Lessons froma Frontier of Innovation
A companion piece to
Developing Value:
The business case for sustainability in emerging markets
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ACKNO W LEDG EM ENTS
IFC Team
Richard CainesMaria GallegosRachel KyteVanessa ManuelPiotr Mazurkiewicz
SuSTaInabIlITy Team
Kelly CruickshankIvana GazibaraKavita Prakash-ManiMichael SadowskiJodie ThorpePeter Zollinger
ProjeCT advISory GrouP
Melissa Brown, Executive Director, Association or Sustainable and Responsible Investment in Asia (ASrIA)George Dallas, Managing Director, Standard & Poor’sWilliam Frater, independent, ormer Senior Analyst o Frater Asset ManagementDr. Subir Gokarn, Executive Director and Chie Economist, CRISILDr. Aileen Ionescu-Somers, Deputy Director, Forum or Corporate Sustainability Management, IMD
amanCo HoldInG InC.
Andreas Eggenberg, ormer Executive Director, Amanco Agricultural SolutionsJuan Luis Gomez, ormer Business Analyst, Amanco Agricultural SolutionsJorge Ramirez, Financial DirectorRoberto Salas, CEO
beIjInG deqInGyuan aGrICulTural TeCHnoloGy Co. lTd.
Liu Xumin, Environmental ManagerWen Nanying, Human Resources ManagerZhang Wenjiang, Financial ManagerZhong Kaimin, Chairman and CEO
jubIlanT orGanoSyS lTd.
Shyam Bang, Executive Director, Manuacturing and Supply ChainShyam S. Bhartia, Chairman and Managing DirectorAshok Ghose, Chie o Environment, Health & SaetyP. Ravishankar, President, Human ResourcesR. Sankaraiah, Executive Director, FinanceRajesh Srivastava, President, Fine Chemicals and CRAMS
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Ajay Amalean, Managing Director, MAS Corporate SolutionsMahesh Amalean, ChairmanRavi Fernando, Director, Corporate Branding and Strategic CSRKamani Jinadasa, Manager, Women’s Empowerment and Go BeyondDave Ranasinghe, Joint Managing Director, MAS IntimatesSharmini Ratwatte, Director, MAS InvestmentsDeepthi de Silva, Director, Group Human Resources
In addition, we gratefully acknowledge the comments, input and company nominations from:Rajni Bakshi, freelance writerJeremy Baskin, Programme for Industry, University of CambridgeCecilia Bjerborn, IFCAndrea Castro, Fundación PROhumanaAimilios Chatzinikolaou, IFCAnne Copeland Chiu, IFCMaría Emilia Correa, GrupoNuevaDeborah Feigenbaum, IFCNicholas Flanders, IFCAndre Fourie, National Business InitiativeMiguel Angel Gardetti, Institute of Studies for Corporate SustainabilityLouise Gardiner, IFCLucie Giraud, IFCDr. Aditi Haldar, Confederation of Indian IndustryJonathan Hanks, IncitePaul Kapelus, African Institute for Corporate CitizenshipRitu Kumar, ActisDana Lane, IFCJoan Midthun Larrea, Global Environment FundClarissa Lins, Brazilian Foundation for Sustainable Development (FBDS)Mike Lubrano, IFCMalini Mehra, Centre for Social MarketsViraf Mehta, Partners in ChangeMario Monzoni, Center for Sustainability Studies, Fundação Getulio VargasJulio Moura, GrupoNuevaKhurram Naayaab, Partners in ChangeFei Pei, IFCTarcila Reis Ursini, EkobeSarah Ruck, IFCEnrique Sanchez-Armass, IFCRobin Sandenburgh, IFCKalim Shah, IFC Bernard Sheahan, IFCSameer Kumar Singh, IFCSimon Winter, TechnoServe Inc.Finally, we are deeply grateful to Lijian Zhao, who stepped in to help us with the case study research and to Tim Hindle, who so eloquently turned our thoughts into words.
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IFC and SustainAbility have been the stewards o the Market Movers project, but we are indebted to many others, notably our project advisory group, the interviewees rom the case study companies and our colleagues, without whom the content would have been less rich, i not impossible to write. It is thus with enormous gratitude that we would like to acknowledge:
Market Movers
Corporate pioneers are using sustainability to create business opportunities in emerging economies
How can business combine long-term success with sustainability – with demands for a healthy environment and a just society? Few chief executives would admit that this question was not near the top of their agenda. And it is not just of concern to boardrooms in London and New York. According to a World Economic Forum CEO survey, sustainability has emerged as a challenge for companies globally, with some of the most innovative practices undertaken in developing countries.
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Market Movers
tells the stories of a number of firms in emerging economies that have managed to find business value in strategies based on sustainability. The firms are driven by world-class business leaders and range across the globe, from Beijing to Sao Paulo – in many cases operating in some of the most challenging environments in which to foster commercial success. The report goes on to draw some lessons from their experiences and to make recommendations as to how other emerging-market businesses might create value from sustainability.While we recognise that any measure of the value added either to their bottom line or to society by businesses’ sustainability strategies is necessarily imprecise, it is none the less real for that. In all our cases there is a close correlation between sustainability and business success, even if there is no irrefutable evidence of causation between the two. The entrepreneurs who built up these companies invariably attest to it.This report is a companion piece to
Developing Value: The Business Case for Sustainability in Emerging Markets
published in 2002 by the International Finance Corporation (IFC), SustainAbility and the Ethos Institute. It was the first large-scale study to examine specifically the risks and opportunities of sustainability for businesses across emerging economies. At that time, there was a widespread assumption that good governance and corporate responsibility were the almost exclusive preserves of western corporations. Yet the report found that many businesses in emerging economies were gaining benefits (such as higher sales, reduced costs and lower risks) from better corporate governance, improved environmental practices, and investment in social and economic development.Throughout the case research we have used the same conceptual underpinnings as in this earlier report. Unlike that report, however, where we focused our analysis on specific actions and investments, here we look at enterprises as a whole, seeking examples where sustainability has been integrated into business strategy. The aim is to show by example that sustainability strategies can work almost anywhere in the world.
FOREWORD
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“Perceiving social responsibility as building shared value rather than as damage control or as a PR campaign will require dramatically different thinking in business. We are convinced, however, that CSR will become increasingly important to competitive success.”
Michael Porter and Mark Kramer (
Harvard Business Review
, December 2006)
A note on language
Discussions around sustainability and business strategy are frequently confused by the language being used. In
Market Movers
, we have provided a glossary (see page 46) to help reduce any such confusion. But in general we use the term ‘sustainability’to refer to a business approach that creates value by embracing opportunities and managing risks derived from environmental, social and governance issues. Many investors, however, prefer the acronym ‘ESG’. So we use that term also, as and when it seems appropriate.
Market Movers
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World Economic Forum,
Responding to the Leadership Challenge: Findings of a CEO Survey on Global Corporate Citizenship,
2003.