An Ethical Valentine’s Day

Passions are rising again this Valentine’s Day. But this time the UK’s Department for International Development (DFID) is also getting emotional – with the launch of its shopping for development campaign. In a press statement today, the International Development Secretary Douglas Alexander encouraged “romantics in the UK to buy Kenyan flowers this Valentine’s Day”.

While it is unusual for Her Majesty’s Government to issue Valentine’s Day messages, this one is particularly heart warming as it debunks a whole set of myths that environmental campaign organisations have been peddling to the British public.

As I’ve argued before, there is a lot of nonsense spoken about “food miles”, with campaign groups arguing against buying Kenyan flowers because of the impact that flying them into the UK has on the environment. As the DFID statement says, “It’s important to remember that flowers flown in from Kenya aren’t grown in heated greenhouses so they use less energy than most of those produced in Europe."

Aside from exposing the environmental claims, DFID’s research also highlights the huge importance of the flower trade to Kenya and its workers:

“Kenya is the lead exporter into the European Union of cut flowers, and the world's largest producer of roses. International demand for Kenyan flowers accounts for almost 10% of the total income it receives from exports. By meeting demand for roses used on 14 February, exporters earn more than from the rest of the year's sales combined. Between 40,000 and 70,000, about 75% of them women, are employed on Kenyan flower farms, and indirectly 1.5 million are employed.”

Buying products from Africa is a way in which everyone can make a direct and sustainable contribution to poverty reduction in Africa. In a statement last year, Business Action for Africa, welcomed the boom in fair trade, but called for the world trading arrangements to be made fair too. African’s don’t want charity, they want a fair opportunity to grow their business and trade their way out of poverty. By highlighting that, the DFID Valentine’s message is a welcome one.

Story-time’s over: CSR grows up

There’s nothing like a good story to engage and excite an audience. The human story behind the numbers is what communications experts always look for as they try to transform dry facts into something that will capture the imagination of a message-overloaded public.

But in the world of corporate social responsibility (CSR), it is precisely this reliance on the simple story that is now holding back progress. CSR has tended to be dominated by stories. Polished case studies from corporate affairs departments on the one side, and half-baked horror stories from campaigners on the other.

The problem with this confrontational approach – this briefing and counter-briefing, descriptions and counter-descriptions of reality – is that we actually miss the real story: that business can have a hugely beneficial impact on international development.

The answer lies in dry facts. What’s been missing is an evidence-based dialogue. For too long CSR has been led by hearsay and anecdote. Thankfully, things are changing.

Unilever set the pace with the publication in 2005 of a groundbreaking study, done in partnership with Oxfam, about the actual impact of its Indonesian subsidiary in the country ("Exploring the Links Between International Business and Poverty Reduction: A Case Study of Unilever in Indonesia"). The report looked at everything from the impact on employment to the impact on the wider economy. Unilever have now published the sequel – a study of their impact in South Africa, done in collaboration with INSEAD ("Measuring Unilever's Economic Footprint: The Case of South Africa").

Commenting on the INSEAD study, Gail Klintworth, Chairman of Unilever South Africa says:

"until now, although we had an opinion of our impact, we did not have the empirical evidence to understand our broader economic impact, and exactly what “making a difference” should be and the path we would need to follow to get there."

Others are following Unilever's lead, including the World Business Council on Sustainable Development, the International Business Leaders Forum, the Harvard CSR initiative and Business Action for Africa.

Finally, we can get excited: hard facts are bound to reveal more about how we can really make a difference. Time to get beyond the stories.

The Africa Enterprise Challenge Fund: a better way to make poverty history

Behind the headlines and campaigns, the key to making poverty history in Africa actually lies with its indigenous entrepreneurs. Not only an engine for economic growth, small businesses are also the source of most jobs and opportunities for poor people.

That’s why the Africa Enterprise Challenge Fund (AECF), launched last year, and with the search for its Fund Managers about to get under way, is so important.

The Fund will offer grants, matched by private sector contributions, to innovative business ideas which encourage greater participation of poor people in markets – as consumers, workers or entrepreneurs.

The Fund is backed by an array of donor agencies, including the African Development Bank, the Consultative Group for Assist the Poor, the International Fund for Agricultural Development, the Dutch Ministry of Foreign Affairs and the UK's Department for International Development.

Interestingly, the Fund will be hosted by the Alliance for a Green Revolution in Africa (AGRA) (which former UN Secretary General, Kofi Annan, chairs), hinting at one of the Funds likely and welcome areas of focus: agriculture - the sector on which most poor people depend for their livelihoods. Finance is the other initial focus, reflecting the difficulty small entrepreneurs often report having in accessing credit and other financial services.

As Business Action for Africa – the network of businesses, business organisation and development partners – this is just the sort of innovative partnership we have been calling for, and we stand ready to engage with the successful Fund Manager to make the AECF the success it needs to be.

Davos 2008: The business of tackling poverty

The latest World Economic Forum in Davos has added further momentum to the UK Prime Minister's Call to Action on the Millennium Development Goals (MDGs) - the set of 8 goals to be met by 2015, adopted by world leaders in 2000 to drive action on poverty, health, education and the environment.

In his original speech last July, Gordon Brown called for a new global partnership to deal with what he sees as a development emergency: the shortfall in progress in meeting the MDGs, particularly in sub-Saharan Africa. The Prime Minister stressed that business has a key role to play in meeting the MDGs.

The 21 business leaders who originally signed a statement in support of this “Call to Action”, have now been joined by other stars of the business and development world, including Bono, Bill Gates and Queen Rania of Jordan. In a joint statement , they have commited to "work to make 2008 a turning point in the fight against poverty...And...to work together to help the world get back on track to meet the MDGs".

This reflects an important trend: the recognition by progressive donors (including the UK's Department for International Development), businesses and non-government organisations that business has a central role to play in meeting the MDGs. In fact, unless the private sector is put right at the heart of the approach of making poverty history, we will never make the lasting progress at the scale and speed that is needed.

In May, the British Government will host an event in London that will bring together government and business leaders to highlight a number of business initiatives that are both transformational and contribute to growth. The agenda will be picked up in September, at broader meeting at the UN of governments, businesses, civil society organisations, NGOs and faith groups to mark the halfway point to the MDGs and to accelerate action.

These events in Davos, London and New York are great news - raising the profile of the MDGs and strategies needed to meet them. But ultimately the test will come when we are able to track real progress on the ground.

Afrika! Afrika!

Apart from being one of the most spectacular shows I have ever seen, Afrika! Afrika! is also hugely important. With over 100 outstandingly talended performers from 17 countries, this André Heller show presents Africa in all its vibrancy - a welcome antidote to the overly-pessimistic nature of much of the reporting on the continent. Businesses - including those in Business Action for Africa - know that Africa is a continent of enormous diversity and opportunity, and the recent positive data backs up this view. Currently at the O2 in London, Afrika! Afrika! is a remarkable showcase of a great continent, and I recommend you join the 1.5 million people who have already seen it as soon as you can.

Tough Talking in Lisbon: the EU-Africa Business Forum

This being the third meeting in the series (after Accra in July and Brussels in Nov last year), we knew what we wanted from this, which was just as well as it was in danger of being hijacked a few times.

In terms of politics at the event, Zimbabwe didn't really feature but there was plenty of heat over the EPAs with Senegalese delegates in particular apparently pre-armed with a "knocking brief" authorised from the top. EU Commissioner Louis Michel, having delivered a good and sincere pitch about all the things the EU was doing for Africa, would be justified in being a bit surprised by the slapping he received.

So, all things considered, it was not a bad outcome for a half-day programme - the short speech by Vincent Maphai of BHP Billiton to the Summit itself may have been a bit light of specific actions, but there are some quite solid platforms developing in the various working-groups which will carry us forward for next time, probably in Sept 08 in Paris under the French EU Presidency.

Fresh thinking at DFID

A wind of change is blowing through the UK's Department for International Development (DFID). A string of speeches over the last month have signalled a new and welcome direction: speeches by Douglas Alexander (the Secretary of State), Baroness Shriti Vadera (a DFID Minister) and Suma Chakrabarti (the top DFID civil servant) have all highlighted the importance of economic growth as the source of long-term wealth creation for poor people, and the value of engaging with the private sector.

In his speech to the United Nations on 31 July 2007, Prime Minister Gordon Brown stated that “trade, wealth creation and job creation are the only routes to long term prosperity”, and that business has a key role to play, in partnership with others, in meeting the MDGs. He argued that “for too long we have talked the language of development without defining its starting point in wealth creation – the dignity of individuals empowered to trade and be economically self sufficient.”

According to DFID, they are looking to engage more intensively with business to discuss what more can be done to advance the growth agenda. They would like to see business scaling up its activities in pursuit of a more transformative agenda, recognising that the most important contribution the private sector can make is through their core business – moving beyond traditional philanthropic Corporate Social Responsibility (CSR) or meeting minimum standards towards innovative and effective, long-term development partnerships.

Suma, in his speech, identifies two approaches that DFID would like to see taken more often in the private sector: voluntary collaborative partnerships, and pursuing profitable opportunities that transform the lives of the poor. On the former, DFID have experience and expertise in collaborative initiatives, such as the Extractive Industries Transparency Initiative (EITI), the Construction Sector Transparency Initiative (CoST), and the Medicines Transparency Alliance (MeTA), and see this as an area where they can offer support to business.

On the latter, DFID say that they recognise that core business, market opportunity and competition can drive activities which meet the needs of poor people. DFID is seeking to work with companies to develop new business models, based on their core business, that can be scaled up to have a transformative economic impact on the communities affected – in terms of jobs, investment, goods and services. There most innovative work in this area has perhaps been in their work around "challenge funds" - pools of funding over which the private sector competes to deliver specific development objectives – including, for example, the Business Linkage Challenge Fund (BLCF), the Financial Challenge Deepening Fund (FDCF) and the recently-announced Africa Enterprise Challenge Fund (AECF). DFID also recognises that creating the right climate for business is also critical to enabling the private sector to thrive, drive growth and reduce poverty, with DFID's interested reflected in their support for programmes such as the Investment Climate Facility (ICF), itself a collaboration with the private sector.

As a long-standing DFID-observer, I believe this shift of emphasis - if it is followed through in practice - is one of the most significant of recent times. Other donors should take note. And business must stand up to the challenge of engaging effectively.