Derek Newberry

How to Combat BoPwashing

greenwashingLet’s face it, this BoP movement has picked up speed since the early days of The Fortune at the Bottom of the Pyramid. We’re getting to a point where we can really glimpse a world, a development space, where the term BoP has arrived in the mainstream, in the media and in business plans of entrepreneurs.

A sure tell tale sign is when consultancies like Triple Value emerge that explicitly use the language of the BoP and advise major corporations on tapping into this market.So as this mainstreaming occurs, it’s valuable to draw lessons from similar experiences early on in the environmental movement within the private sector. Greenwashing, the act of promoting a company image of sustainability without creating real change in daily activities and operations, is now a commonplace idea. As the term BoP infiltrates boardrooms and ad agencies, could we also see a trend of “BoPwashing”?

To preemptively answer critics that might worry about the prospect of BoP business models flourishing that are all PR and no social impact, a few initiatives have sprung up that seek to verifiably measure how much a given business or project actually benefits the BoP.

One notable leader in this area is Ted London of the William Davidson Institute. Others without an explicit BoP focus have devised some pretty sophisticated methods for evaluating broader social impacts of a company – here, the enterprise development group, SEAF, especially comes to mind. I’m still not quite sure how they come to the conclusion that each dollar invested in their enterprises generates $12 in their local economies, but it’s a fascinating read.

With a similar intent, New Ventures undertook a project in 2006 that is just wrapping up now – an attempt to identify the social and environmental benefits of a sampling of our portfolio companies. This ended up being a long and difficult but rewarding process. It has given us and our entrepreneurs written proof they can pull out when the necessary differentiation is made between those companies that understand the market opportunities afforded by mitigating environmental and social risk, and those that are just green- or BoPwashing.

Stay tuned for a full report on the trials, tribulations, and crucial importance of sustainability reporting from the New Ventures team this summer….