Enabling Green and Inclusive Markets – A Case for Public-private Collaboration

By Ashley Aarons, Assistant Coordinator of the Donor Committee for Enterprise Development

Enabling Green and Inclusive Markets – A Case for Public-private Collaboration

Sustainable development and green growth require real dialogue between private and public sector actors on how to improve the operating environment for green and inclusive businesses. To support this, the Donor Committee for Enterprise Development (DCED), UN Global Compact and the World Resource Institute’s (WRI) New Ventures initiative, organized an event “Enabling green and inclusive markets – a case for public-private collaboration” on 18 June in Rio de Janeiro during the Rio+20 Corporate Sustainability Forum (CSF). This brought together a variety of perspectives to look at such approaches, and in particular focused on business models that work in India, and how donors and multilaterals can support framework conditions in developing and emerging countries.

We made a number of videos to capture some of the key messages that came out of this event. To continue the discussion, the DCED will be organising a similar event in Johannesburg at the 15th International Business Forum, 21-23 October, focusing on the business environment for green and inclusive businesses in South Africa. We are also looking into creating a community of practice for inclusive and green businesses that brings together governments, businesses, academia as well as the bilateral and multilateral donor community. The aim would be to help improve cooperation in generating and disseminating knowledge and effective policy measures to support inclusive and green businesses. We welcome any of your comments on this, and further involvement – progress can be followed on our website, newsletters, or Facebook and Twitter accounts.

Waterlife India: Providing Clean, Affordable Water to the Bottom of the Pyramid in Rural India

In the first video, co-founders Mohan Ranbaore and Indranil Das introduce Waterlife which aims to tackle the acute lack of safe drinking water for the poorest in India. Instead of building large Water Treatment Systems (WTSs), which are often unsuccessful due to a lack of operation and maintenance (O&M), Waterlife has pioneered a business model in which they build smaller village-level WTSs, and cover O&M through small user fees. This model has created employment opportunities for the poorest at WTSs and in water distribution, and improved the health of its 1.4 million consumers (90% of whom earn less than USD 3,000 PPP a year). It has allowed Waterlife, which was founded in 2008, expand to seven states in India and build 1,700 water purification plants. Though the government is very supportive of the water sector, Indranil notes that donors still have a valuable role in helping businesses like Waterlife scale-up and operate in new areas. Further, as co-winner of the G20 Challenge on Inclusive Business Innovation, Waterlife will attend a series of workshops on the challenges business face replicating business models in other countries.

Greenlight Planet: Delivering Reliable and Safe Solar-powered Lighting to Developing World Households

Kerosene oil lamps are expensive, dangerous and inefficient. Mayank Sekhsaria, Co-founder of Greenlight Planet, notes how this and the needs of poor, rural communities for lighting, led Greenlight Planet to start developing affordable and reliable solar-powered lanterns. Mayank notes that though the large off-grid population in India is a large potential business market, reaching numerous remote rural communities is a significant problem for Greenlight Planet and for other inclusive businesses. He details how Greenlight Planet attempts to resolve this, distributing lanterns both through other partners and through its own innovative distribution system of employing customers. This has helped Greenlight Planet, since its commercial launch in 2009, rapidly scale-up to have over 250 employees spread across 6 offices in India, Kenya and China, and to have already reached over 1.5 million village users across 25 countries, with significant positive impacts on the environment, health and livelihoods. Greenlight Planet is still refining its business model, and Mayank ends by noting that donors have a necessary role in supporting the development of effective business models, before commercial capital can help scale-up operations.

A Policy Maker Perspective: Strengths and Weaknesses of the Indian Business Environment

Bhaskar Chatterjee, Director General and CEO of the Indian Institute of Corporate Affairs, and former Principal Advisor in the Indian Planning Commission, notes that there have been big improvements in the Indian business environment. He states “I don’t know of any other country in the world that has seen so much policy driven reform as in India.” Examples of this, and its successful impact, include how solar panel incentives have encouraged more than 5,000 solar start-ups. Bhaskar notes, though, that policy gaps remain, such as at times a clash between central and state legislation, and that vocal interest groups can drive policy. Future steps for the Indian government include increasing support to long-term business models and restructuring its PPP model to further support the private sector.

Development Agency Support to Green and Inclusive Businesses

The DCED Green Growth Working Group brings together development agencies to address how private sector development can support green growth. Kim Nguyen Van, Head of Project, Sustainable Economic Development, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and Chair of the DCED Green Growth Working Group (GGWG), outlines two of its current activities – researching the links between green growth and women’s entrepreneurship, and compiling diagnostics for partner countries to assess the likely effects of green growth policies. In addition, a number of development agencies are active independently in supporting green growth initiatives, and Kim details GIZ’s economic policy support. He also highlights further multilateral support, including the G20 Challenge on Inclusive Business Innovation. Kim ends by looking at the outcomes from the DCED, UN Global Compact and WRI side-event at Rio+20 on the business environment for inclusive and green businesses. Next steps in the discussion include a side-event at the 15th International Business Forum, 21-23 October, in Johannesburg, focused on green and inclusive businesses in South Africa, and a possible community of practice for green and inclusive businesses.

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