Wednesday
July 18
2012

Giulia Christianson and Sreyamsa Bairiganjan

Achieving Green and Inclusive Markets Through Public-Private Collaboration: A Bright Spot at Rio

This article was co-authored by Sreyamsa Bairiganjan

Editor’s Note: This is the first of a two-part series that explores the Rio+20 Corporate Sustainability Forum session, “Enabling green and inclusive markets – a case for public-private collaboration.”

In the midst of the shortcomings of the recent Rio+20 Earth Summit, there were bright spots that offered hope that a sustainable future is possible.

One of these was a half-day session at the Rio+20 Corporate Sustainability Forum called, “Enabling green and inclusive markets – a case for public-private collaboration.” A joint initiative of the Donor Committee for Enterprise Development and the United Nations Global Compact, in collaboration with WRI’s New Ventures initiative, the session offered a glimpse of how “green” and “inclusive” markets can flourish as a result of the collaborative efforts of entrepreneurs, governments, civil society, and bilateral and multilateral donors.

What is meant by “green” and “inclusive” markets and why should we care? As Martin Herrndorf explained, “Inclusive business – the inclusion of the poor as consumers and producers – and green business – reducing environmental impacts – are often highly interlinked.” Green and inclusive businesses can help align poverty alleviation and environmental sustainability goals to achieve the sustainable future that was the focus of so many discussions in Rio.

Solutions from the bottom up

Entrepreneurs around the world are developing innovative technologies and business models that have the potential to help the billions at the base of the pyramid while also preserving the environment. Four such entrepreneurs, supported by New Ventures India, joined the panel in Rio to provide their insights:

  • Waterlife India tackles the acute lack of safe drinking water in India through community water systems;
  • Sustaintech promotes a fuel-efficient wood burning stove for commercial kitchens;
  • VayuGrid focuses on renewable energy solutions, using non-edible oil seeds as biofuels for diesel engines;
  • Greenlight Planet designs and distributes solar-powered lanterns to low-income rural customers in India and Africa.

The entrepreneurs discussed the common barriers they face in scaling their businesses: limited access to commercial loan finance, unbanked customers unable to finance product purchases, poor physical infrastructure (e.g. transportation/roads, electricity), a shortage of properly trained staff and weak rural distribution networks. Still, they persist in running their businesses because, as Svati Bhogle, founder and CEO of Sustaintech made clear, these issues “make our work more challenging, but also more inspiring.”

While the panel agreed that the investment climate supporting green and inclusive enterprises is gradually improving, participants stressed the need for long-term investment policy support from governments. Henry Saint Bris, senior vice president of Strategy at Suez Environment, which invests and manages waste and water assets, told the audience that this support is essential to attracting new investors in green and inclusive businesses in India.

The importance of collaboration

Participants also agreed that smart collaboration between governments, donors, investors and multilateral organizations can support entrepreneurs’ efforts to create solutions from the bottom up. Specific examples emerged during the discussions:

  • Dr.Bhaskar Chatterjee, director general and CEO of the Indian Institute of Corporate Affairs, drew attention to how the policies under the Government of India Ministry of New and Renewable Energy’s “Solar Mission” project have encouraged new solar energy generation and technological and human resource development, supporting over 5,000 solar start-ups.
  • Cristina Martinez-Fernandez, senior policy analyst at the OECD, described the organization’s Local Economic Employment and Development Program (LEED), which aims to create more and better jobs through effective policy implementation, innovative practices, stronger capacities and integrated strategies at a local level; in particular, LEED coordinates with governments to identify ways to support business growth and promote social entrepreneurship.
  • Heinz Leuenberger, director, Environmental Management Branch of UNIDO, spoke about the Green Industry Initiative, which creates awareness, knowledge and capacities. They work with governments to support industrial institutions that in turn provide assistance to enterprises and entrepreneurs in all aspects relating to the greening of industry. The Green Industry Platform (launched earlier at Rio), provides a framework for bringing together governmental, business and civil society leaders to secure concrete commitments and mobilize action around this initiative.
  • Paolo Martelli, director of Latin America & the Caribbean at the International Finance Corporation (IFC), explained how the IFC works with governments to help create “business enabling” environments, while also directly linking small and medium enterprises (SMEs) to investors.
  • Seethapathy Chander, director general, Regional & Sustainable Development at the Asian Development Bank (ADB), highlighted the Bank’s recent “7th Asia Clean Energy Forum” (see a NextBillion post on this event here) that provided a platform to over 800 clean energy stakeholders from over 55 countries to deliberate on energy access, technology, finance and policy related issues. He also discussed the ADB’s Energy for All Partnership that helps green companies identify local support systems to advance their businesses.
  • Susanne Dorasil, head of Division, Economic Policy; Financial Sector at the German Federal Ministry for Economic Cooperation and Development (BMZ), commented on the key role of developing the capacities of individuals, organizations and societies in supporting green companies. She also underscored the importance of improved dialogue on the national and international level about policy measures to support inclusive and green businesses—something that she hopes could be achieved through a new “community of practice” for enabling green and inclusive markets.

The way forward

Towards the conclusion of the session, Dorasil from BMZ, who served as a judge for the G20 Challenge on Inclusive Business Innovation, revealed that Waterlife India was one of 15 challenge winners. The winners, honored that day at an awards ceremony at the concurrent G20 summit in Mexico, were recognized for their innovative, scalable, and commercially viable way of working with low-income people in developing countries. The winning companies will attend a series of workshops focusing on the challenges that businesses face when replicating their business models in other countries.

This initiative, organized by the G20 with support from the United Arab Emirates and the Siemens Stiftung (Foundation) and including participation from bilateral donors like BMZ, provided a tangible example of public-private collaboration in action that can help green and inclusive businesses achieve greater scale.

Green inclusive growth is not yet a reality, but the half-day session at Rio—with its examples of successful entrepreneurs and organizations standing ready to help—showed the promise of what successful collaboration between the private sector, governments, donors, and civil society can achieve.

Categories
Energy, Entrepreneurship, Environment
Tags
New Ventures, renewable energy, SME finance, sustainability, World Resources Institute