The Shell Foundation believes multinational companies have a huge potential to contribute to the public good that is largely untapped and often misunderstood. This social value can only be realised when the knowledge, problem solving and project management skills of these companies are deployed to tackle societal problems.
Why is it that DHL can get a package from New York to Uganda in three days, but it can take health agencies up to 36 months to convert aid funds into lifesaving drugs delivered to sick people in the same country? Why does so little of the development aid approved never get applied in the field but is lost through inefficiency, corruption and mismanagement? It’s partly because the distribution management skills DHL uses on a day-to-day basis, or its business DNA, are in scarce supply in the public health sector – and because if DHL or any company were to lose control of the majority of its operating budget, it would very soon go out of business.
Take, for example, the commitments in 2005 by rich countries to double aid to Africa. The reality is that the aid community has a poor record when it comes to delivery. In the last 50 years more than $600bn of it has flowed to Africa, yet most Africans are poorer now than they were a quarter of a century ago. So, why is this relevant to multinationals?
Well, taking a one-pound coin dropped into a donation tin in a British high street and converting it to construction materials and skilled teachers needed to get life-saving drugs to rural communities in Africa is essentially a complex supply-chain management challenge. So is getting oil out of the ground in a remote and hostile location and transporting it to a British consumer’s car several thousand miles away. In other words, almost all big global companies whether they deliver packages or sell petrol are stuffed full of supply-chain experts. Surely there is an overlap here, where these experts could help aid organisations deliver their aid more effectively.
There are many reasons why squaring this circle can prove difficult. But it’s not impossible as attested to by a few successful examples of MNCs using their skills (rather than their money) in partnership with society to tackle poverty. The challenge comes in getting the majority of MNCs and NGOs (and indeed the media) to step outside the adversarial roles they are used to playing (or pointing out) to see that big companies’ skills and know-how, deployed properly, can generate social value that will dwarf any private value created along the way.
This is where the Shell Foundation comes in. As a corporate foundation, searching for sustainable solutions to poverty, energy and environmental-related issues – we are in a unique position to develop and advance these ideas. Wherever possible we reach back into Shell, the company, and seek to deploy its ‘value-adding assets’ – people, knowledge and infrastructure – in ways that help to deliver our charitable objectives. By doing this through our programmes we hope to prove that multinationals can better serve society. We hope some of these will become ‘best practice’ models for the future.
Sometimes, our close ties also lead to questions about our independence from the company. This is understandable – but our lines of responsibility and accountability are firmly in place and open to all to observe. The foundation reaches back inside the company. The company cannot – and does not – reach back the other way. It is a one-way process. We think challenging the way multinationals operate so that they deliver greater public good is a positive thing – and so is getting society to wake up to the possibility.
Kurt Hoffman is director of the Shell Foundation. A development economist, Kurt was previously a senior fellow at the Science Policy Research Unit at the University of Sussex and then worked at an advisory and operational level for private foundations as well as the UN, EU, the World Bank and various bi-lateral development agencies.
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