Journalists' Business Briefing for Johannesburg World Summit-Poverty Eradication

www.article13.com have launched a new mini-site, called Journalists Link, that will give you key information and insight on the Earth Summit 2002 and its links to business. We have identified five issues on the agenda that are relevant to business and in the days running up to the Summit will be posting briefing papers on Corporate governance, Reducing poverty, Making globalisation work, Sustainable levels of consumption, Reversing environmental degradation.

Number 2 in a series of 5 below.

Poverty Eradication
- one of the greatest shared responsibilities and possibly the greatest challenges of the 21st Century.

What business can do/is doing: Business, amongst its others functions, can help deliver infrastructure development, primary health care and renewable energy to the world's poor, e.g. Fast-track development of a geothermal power plant in Kenya by ORMAT - an American Geothermal provider - which will provide national geothermal capacity, skilled jobs and infrastructure development.

The business opportunity: Inclusive capitalism focusing and developing products for the world's poor can result in growing profits and contributions to social and human capital. The majority of developing countries with high incidences of poverty still don't have the modern infrastructure or products to meet basic human needs. The development of environmentally sustainable technologies to help them will require radical innovations in technology and business models. Currently, however, must business activity within "poor" markets is undertaken by local micro businesses and by social entrepreneurs.

Business Risks: Business have to get it 'right' as the very poor are the most vulnerable in society and need to be protected from businesses that do not recognise their corporate social responsibilities. Because of this there is a great deal of concern within the NGO sectors and developing countries themselves of the growing role of 'un-regulated' business in the developing world e.g privatisation of water and other utilities. Social justice and environmental NGO's are calling for the regulation of Trans National Companies in the form of a corporate convention at Johannesburg.

Case study - Hindustan Lever LTD (HLL)

This subsidiary of Unilever plc has developed its business plan to explore markets at the bottom of the consumer pyramid.

"Everybody wants brands. And there are a lot more poor people in the world than rich people. To be a global business . . . you have to participate in all segments." --Keki Dadiseth, Unilever

The company developed 'Wheel', a new detergent formulated to substantially reduce the ratio of oil to water in the product responding to the fact that the poorer population of India often wash their clothes in rivers and other public

waterways. HLL also changed its cost structure of its detergent so it could introduce Wheel at a lower cost. Wheel now has 38% of market share.

Case study - PVMTI India

This company are specialists in renewable energy engineering and environmental mitigation who have run over 600 projects in 90 countries over the past 20 years. Over 50 % of its work is with solar energy. Wind the fastest growing energy sector in the world is also a key sector. PVMTI India also offers financial expertise as a service. Using funds from the European Community it sets up businesses selling energy to villages. This develops entrepreneurship and enables urban and rural micro-credit. PVMTI have also pioneered some 'south south' collaborations including the Photovoltaic Market Transformation Initiative in India Morocco and Kenya.

Article 13s co-directors, Neela Bettridge and Jane Fiona Cumming, have extensive experience in a number of critical fields: commerce and communications, social and environmental arenas, legal and business strategy. Article 13 also draws on the wisdom of distinguished advisors: Dr Paul Toyne, Professor Chris Baines, Chris Hoare, Professor Colin Gilligan, Susan Clayton, Neill Irwin, Professor Dave Owen and Andrew Acland. This panel, in turn, is complemented by a network of specialists drawn from the social, environmental, economic, ethical and business worlds.