Defining the Inclusive Business Features
BY BUSINESS CALL TO ACTION AND IBAN
As the world grapples with the impact of Covid-19 and the severe challenges of climate change, the need for sustainable business models is greater than ever. Inclusive businesses (IB), by engaging poor and low-income populations through their core business models, can play a key role in this aspect as we build more inclusive, resilient, and equitable societies for the future.
IBs contribute to poverty reduction and inclusive economic growth through commercially viable and scalable businesses that have purpose and impact built into their core. They help move forward the Sustainable Development Goals (SDGs) while also providing market opportunities and competitive advantages for the private sector.
To further the role and space for inclusive business, leading inclusive business stakeholders have come together for the first time to define what the key features of IBs are based on their own first-hand experience of it.
This consensus, on defining the features of IB, is much needed today as companies and investors are increasingly incorporating inclusive practices to pursue growth opportunities while boosting development impact. However, “inclusion can have different meanings for different stakeholders,” explains IFC’s Kathy Mignano. “That’s why a consensus about the basic features of inclusive business is key. It creates a common understanding, so all stakeholders can speak the same language.”
These resulting Inclusive Business Features are being launched on September 23 at Business Call to Action’s side event at the 76th Session of the UN General Assembly. They seek to act as a guiding document for the adoption of IB through clear and practically defined features for businesses, investors and governments and have been developed specifically for them.
“As COVID-19 impact increases the need to provide access to affordable quality health and education services for low-income segments to create quality socially sustainable jobs, we hope this guide will help align private sector thinking on how to do more and do better inclusive business,” says Susan Olsen of the Asian Development Bank, one of the collaborating organizations in creating the Features.
For companies, the features can be used as a framework to develop and implement IB models and at the same time act as guidance on how to scale them. The features outline the distinguishing characteristics of an inclusive business model, making it easier for businesses to succeed in their efforts while encouraging more stakeholders to get involved, adds Mignano.
For investors, IBs represent sustainable investment opportunities that combine impact with financial return. The Features define clearly how inclusive business fit into SDG and ESG-centered portfolios and can be used to evaluate criteria for investments. In particular, they aim to highlight and broaden the understanding of investors seeking to address poverty solutions through their portfolios.
For governments and policymakers, the Features can be used as guidance in developing enabling policies and frameworks for IBs. They can also increase private sector engagement in addressing social issues and lead to more enabling environments for business communities to adopt such models.
As the Inclusive Business Features are launched this week, it seeks to not only promote IBs as a viable answer to providing development solutions by developing new and sustainable business models, but also to remind us of the ‘wins’ the private sector can generate in building more equitable societies.