Corporate social responsibility has evolved and companies are now exploring ‘inclusive business models’, says Interface’s Miriam Turner
Corporates are increasingly being acknowledged as key players in solving major global development challenges such as poverty and inequity. Indeed, many leading businesses are recognising this and moving from a ‘do-no-harm’ responsible practice approach, to strategies that optimise positive returns for both business and social development. As such we see a growing number of leading sustainable businesses adopting inclusive business models.
Inclusive business isn’t philanthropy. It’s about conducting profitable core business activities, which also provide wider opportunities for poor and disadvantaged communities. Doing this requires new collaborative business models that engage disadvantaged communities either as suppliers, distributors, consumers or employees.
With a proven history of radical thinking and innovation behind it, Interface started to explore the inclusive business approach in 2004. During the mid-nineties, the company made a pledge to become a sustainable business by 2020 and over the years we’ve made significant progress in minimising our environmental impacts.
We began to explore how our products could have a positive impact socially as well as environmentally. Following discussions with the World Business Council for Sustainable Development (WBCSD) and local partners in India, we set about creating a pilot scale inclusive business model, which we called FairWorks. Four years later we launched the first product from FairWorks, a natural fibre flooring range called Just™.
The actual product didn’t sell as well as we had hoped– it was launched in the midst of the financial crisis, and was too different to our usual carpet tiles to be sold through our existing channels. However, we saw a huge opportunity in following inclusive business principles. We learned the importance of good local partners who know the right people on the ground.
We took our experience and lessons learned from FairWorks and have been looking for ways to apply them to our core business and products. In September 2012 we will launch our next product line, which has great environmental credentials as well as socio-economic benefits. The Fotosfera collection is our first commercial carpet tile made from bio-based raw materials. Its yarn is made from castor plant oil, a crop that is grown sustainably in rural India. The local farmers are also often able to achieve revenue more than 10 times what it cost to start the crop, for minimal effort and outlay.
We are also working with the international conservation organisation Zoological Society of London (ZSL) on an innovative pilot project on Danajon Bank, the Philippines. With the pilot, we’re attempting to create a community-based supply chain for discarded fishing nets, which can be recycled into raw material for our carpet tiles. We are plugging this initiative into Interface’s mainstream business model, which, we believe, is the key to any social intervention having real development impact at scale.
When done right, inclusive business models can bring significant socio-economic benefits to disadvantaged communities, whilst providing companies with a competitive differentiator for products. Getting inclusive business right requires management buy-in for openness, collaboration and partnership. Sustainability is the ‘mother of all collaborations’ after all. Pilot programmes will start small. If we develop them to be profitable, scalable and sustainable they will have the most chance of success in the long run.
Miriam Turner is AVP of Co-Innovation at Interface
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