Emerging Market Companies Win by Using Innovative Strategies for Sustainable Business, a Joint IFC and SustainAbility Report Reveals
What do an egg producer in China, a plastic pipe manufacturer in Brazil, and a chemical producer in India have in common? These companies each gained a competitive advantage by developing business strategies to become environmentally and socially responsible. In a new report, entitled “Market Movers: Lessons from a Frontier of Innovation,” IFC, a member of the World Bank Group, and SustainAbility tell the stories of four emerging market companies that have pioneered new sustainable business strategies.
Although companies from emerging markets are making their presence felt increasingly in the global business community, only a few are known for their environmental and social management. The report captures key moments in the companies’ histories that determined their strategic directions and motivations. It shows that companies from emerging markets, even more than in developed countries, can lead the way in sustainable innovations, which act as strong market differentiators.
Richard Caines, who led the work for IFC, said, “Sustainability is ‘home grown’ with these companies. Unlike many companies in the North, they did not develop their sustainable business models as a reaction to outside criticism, but rather because they could see the business case. The goal was to create new value, rather than protect existing value. Sustainability originated from a different place.”
Jodie Thorpe, who heads SustainAbility’s Emerging Economies practice, said, “While some of the companies that we interviewed talked explicitly about sustainability strategies, others described their approach as sound business sense—a strategic response to trends they observed around them.”
The report features examples of the successful combination of profitability and sustainability in four companies, along with data on their environmental, social and governance performance. These companies are:
Amanco, a Latin American water pipe manufacturer that decided to develop a new water-tight technology and cater to low-income customers.
Deqingyuan, an ambitious Chinese entrepreneur who supplies high-quality eggs in Beijing.
Jubilant Organosys, an Indian chemical producer that has been able to reassure and attract investors with its high environmental, health, and safety record and efficient sustainability reporting.
MAS Holdings, a Sri Lankan apparel manufacturer that increased the retention of its mostly female employees by offering them benefits, including training courses in information technology. The company is now a supplier to some of the world’s leading retailers.
The report is available on internet at: http://www.ifc.org/enviropublications
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit www.ifc.org.
Established in 1987, SustainAbility is a strategy consultancy and independent think-tank that specializes in the business risks and market opportunities of corporate responsibility and sustainable development. With offices in Europe and the United States, it works with leading companies, nongovernmental organizations, and key players around the world. Representing over 10 nationalities, it multidisciplinary team works to clear rules of engagement to achieve traction and change. For more information, visit www.sustainability.com.
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