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Environmental convergence
Integrating environmental and social challenges in inclusive business

THE RECKONING: THE TIME IS NOW TO TAKE THE "GREEN LEAP"
Publication Date
In 1987, the Brundtland Commission published the path-breaking book Our Common Future, which first introduced the term “sustainable development” into the global lexicon. Now, more than three decades into this journey, I write with some good news and some bad news. First the good news: A growing number of corporations, entrepreneurs, multilaterals and NGOs have incorporated “sustainability” as an important part of their strategies. Indeed, “clean technology” has become a large and growing investment category with more than a quarter billion dollars of investment each year. And, my 2002 article with C.K. Prahalad entitled “The Fortune at the Bottom of the Pyramid” helped to ignite a new business-led movement described variously as “base of the pyramid,” “social enterprise,” and “inclusive business.” In addition, the advent of the Sustainable Development Goals (SDGs) has reinforced the scale and scope of the social and environmental challenges we continue to face. Now for the bad news: We have not yet begun to fundamentally change the unsustainable trajectory of the global economy. Instead, over the past twenty years, we have added nearly two billion more people to the global population and further intensified our ecological footprint on the planet. By 2030, the global “middle class” is expected to grow from the current three billion to more than five billion people, with consequent increases in material consumption, waste generation, and greenhouse gas emissions. And while the quest to eradicate extreme poverty is necessary and important, the science is also clear: we have overshot the carrying capacity of the planet and serious repercussions are now inevitable. To make matters worse, over the past twenty years we have added two new and foreboding crosscurrents to the global sustainability challenge: First, a growing number of people in the developed world that have been left behind by globalisation have realised their plight and flexed their political muscles—witness BREXIT in Europe, the rise of Donald Trump in the United States, and a growing hostility toward global trade pacts. Second, the global spread of information technology and social media has inadvertently helped to fuel extremist movements, information warfare, election hacking, and misinformation campaigns around the world. The result? Nativism, atavism, protectionism and isolationism are now on the rise at precisely the time that we need more cooperation and multilateralism to address the mounting transboundary challenges that we face, including climate change, loss of natural capital, rising inequality, mass migration, and terrorism. We have thus arrived at the Day of Reckoning for business—and the world. With governments in retreat and civil society overburdened, the world is turning to the private sector to address the monumental challenges we now face. The time is now to move beyond “environment” and “poverty” as separate company initiatives. We are now past the point where even aggressive “clean tech” and “base of the pyramid” initiatives enable us to change course rapidly enough. Business cannot long thrive within deteriorating environments and failing societies. This means nothing less than reimagining the world’s inequality and environmental challenges through a new, more integrated business vision. Many emerging “clean” technologies, including distributed generation of renewable energy, biomaterials, plant-based proteins, low-cost connectivity, blockchain, IoT, and 3D printing could hold the keys to addressing both the world’s environmental and social challenges. Indeed, because these emerging technologies are often “disruptive” in character, the base of the pyramid is often the ideal place to focus initial commercialisation attention: China’s towns and small cities, Brazil’s favelas, and Africa’s slums, India’s rural villages, and America’s forgotten towns and deindustrialised cities present vast opportunities to build the markets—and commercialise the clean technologies—of the future. Taking such a “green leap” to the base of the pyramid avoids the resistance, inertia and incumbent bias which pervades the established markets at the top. Once established, these innovations will “trickle up”—and disrupt—the top of the pyramid. First, they must be proven more reliable, affordable—and environmentally sustainable—than the legacy technology and infrastructure at the top. And, inclusive business entrepreneurs must play a central role in building this movement. In my view, taking the “Green Leap”—the creative fusion of environmental and inclusive business agendasis key to achieving the SDGs. If I am right, this holds important implications for both executives and policy-makers. Rather than circling the wagons, building walls, and doubling down, the best thing we could do is craft policies and strategies that get our most promising technologists and entrepreneurs into the urban slums, shantytowns, deindustrialised cities, small towns, and rural villages of the world, where five billion plus underserved (and increasingly disenfranchised) people currently reside. It is here that the Green Leap will take place. And, it is here that the corporations of the 21st century will rise, like the proverbial Phoenix from the Ashes.
Stuart Hart
Stuart L. Hart is one of the world's top authorities on the implications of environment and poverty for business strategy. According to Bloomberg Businessweek, he is one of the founding fathers of the "base of the pyramid’ economic theory".

featured story

A dangerous disconnect: Inclusive Business without environmental sustainability at its core

This issue of the Inclusive Business Online Magazine CLUED-iN brings us from Liberia and Zimbabwe to Thailand, Korea, India, and Brazil—to focus on one of the fundamental, yet sometimes forgotten underpinnings of inclusive business: the environment.

The edition features contributors who are calling for a greater focus on the environment and entrepreneurs who are answering that call.

Dana Gulley

Table of contents

graphic summary

GRAPHIC SUMMARY

A visual summary of the key challenges entrepreneurs need to consider when it comes to integrating environmental and social challenges at the base of the pyramid. Learn more about these aspects by reading this third edition of the newly developed onlin

editorial

THE RECKONING: THE TIME IS NOW TO TAKE THE "GREEN LEAP"

Professor Stuart Hart warns that even “aggressive” inclusive business initiatives cannot save us from having overshot the planet’s carrying capacity, unless we envision—and act on—a more integrated approach to tackling our world’s challenges. Hart calls on social entrepreneurs and big businesses alike to take the so-called “green leap,” by developing—and commercializing—innovative, disruptive, and “clean” technologies in new markets, at the base of the pyramid.

Stuart Hart

featured story

A dangerous disconnect: Inclusive Business without environmental sustainability at its core

This issue of the Inclusive Business Online Magazine CLUED-iN brings us from Liberia and Zimbabwe to Thailand, Korea, India, and Brazil—to focus on one of the fundamental, yet sometimes forgotten underpinnings of inclusive business: the environment. The edition features contributors who are calling for a greater focus on the environment and entrepreneurs who are answering that call.

Dana Gulley

A message to entrepreneurs: this is about missing entire markets, not just marketing opportunities

Sahba Sobhani believes that the work at the “nexus of poverty and the environment,” must be connected to the Sustainable Development Goals—and that it goes far beyond permitting mechanisms like carbon credits.

Green growth: necessary, affordable, and teeming with jobs

Frank Rijsberman of Global Green Growth Institute (GGGI) believes there is reason to be optimistic about the future. Working with some sixty governments worldwide, he sees plenty of examples of those that are creating enabling environments for green, inclusive businesses to thrive.

Supporting nature is key to improving the "GDP of the Poor"

Gomera takes us to his childhood village in Zimbabwe—once bountiful—where poverty has led to extreme environmental degradation and now, “entrenched poverty.” He uses Mhondoro to tell a cautionary tale and to make an argument in support of “GDP of the poor,” a new accounting method that takes into account biodiversity and ecosystem services.

What impact? Without a focus on climate resilience, decades of social investment could be undone

Robertshaw makes the argument that social entrepreneurs must consider climate risk in their business planning and develop businesses to combat climate change. She also calls on impact investors to step up.

Korea-based company works to develop nascent ecosystem of "environmental-lens impact investing"

MYSC has taken notice of the growing environmental public and politically sentiment in Korea. As an impact investor and sustainable business, MYSC is committed to reflecting and expanding this sentiment in the private sector.

Food production systems that work, are inherently inclusive and sustainable

JUST is reimagining food systems, and Emerging Markets Director, Taylor Quinn, shares the four principles of a food system that works. As he explains, when you build a system from scratch, you must account for the environment as a cost of operation, “at the core of what you are doing.”

Inclusive circular businesses have a critical role to play in combatting plastic pollution

Using an inclusive and circular approach, Full Circle Filament is dedicated to not only reducing plastic pollution and improving the wages for the trash pickers, but also to innovating new 3-D printed products at the base of the pyramid.

Environmental sustainability and youth employment must be integrated to address rural housing crisis in India

A scaled version of Drishtee’s Gharaunda pilot initiative will create jobs in sustainable construction with the use of locally-sourced building materials. With high levels of youth unemployment, a scaled version of the programme will create jobs in sustainable construction with the use of locally-sourced building materials.

Give a "nudge" and they go a mile: how so+ma is encouraging environmentally-friendly consumer behaviour in Brazil, and offering life-changing opportunities in return

So+ma is tackling the SDGs by changing consumer behaviour. By partnering with companies to offer valuable opportunities to low-income programme participants in Brazil, families have diverted 91,000 kg of waste to recycling and trash pickers have been able to improve their efficiency by 30 per cent.

Six transitions for entrepreneurs to take the "Green Leap" to an inclusive economy

Echoing the sentiment found in Professor Stuart Hart’s editorial, Casado provides the critical “how to guide” for entrepreneurs to take the ‘green leap’. Casado argues that for an economy to be green, it must also be socially inclusive.

Ask Jack

In this insightful podcast series, Jack Sim answers questions from readers of the Inclusive Business Online Magazine CLUED-iN. This month, he voices his thoughts around the topic of environmental innovation for the base of the pyramid.