Is it really so hard to be socially and environmentally responsible and make a profit?

The Bangladeshi rug-making initiative ‘Connecting Extreme Poor Women to the Export Markets’ shows that it needn’t be.

The back story? Local entrepreneur with social conscience struggles to grow his rug-making business without resorting to a sweatshop approach; international value retailer looks for sustainable source of responsibly produced craft-type products. Step in Care Bangladesh who are committed to rural sourcing and an inclusive business approach to poverty alleviation.

Rather than reducing costs by inducing women to move out of the villages into large factories in Dhaka, the business model involves these rural women walking to work to weave rugs, made from RMG factory scraps, on traditional hand looms situated in 25-person units sited adjacent to local villages. Assisted and supported by CARE Bangladesh, Classical Handmade Products (CHP) developed the model, initially employing 75 workers, and forged links with the export market with KIK Germany being the first to place a regular order for this sustainable and profitable product line.

Five years on, 2.1 million rugs have been sold and conditions for 1,025 extreme poor rural families and their communities have been transformed. Plus, plans are well advanced for the building of a large semi-rural unit built along strict pro-environment lines with women being bussed in from a number of local villages.

So what useful lessons can be learned from this super project for supporting and growing inclusive businesses? They include, for me: that

1. the value chain approach continues to be a useful tool to use both to plan initiatives and to support their development. Link with Results Chain methodology to examine the details, overcome obstacles and build on strengths.
2. there is a need to focus on every link in the chain, not just on the rural employment end. No buyer – no jobs. No jobs – no local economy improvement.
3. building long-term partnerships with key stakeholders at very point in the value chain can strengthen the chain as a whole.

- local community: get buy-in from local people by engaging them in discussions about the prospective jobs; continue to work with communities over time; have open days; involve people in decision-making; ensure decent pay and conditions.

- employees: empower them by providing training and information in health and hygiene, contraception, money management, small business development etc.

- local entrepreneurs: need ongoing support with recruiting and training prospective employees; stay involved with the business at local level; use international contacts to source export buyers; support relationship building with the buyers.

- export buyers: use international-level networking to identify buyers in the market for responsibly produced goods; build long-term relationships; demonstrate understanding of the business imperative.

In this example, Care Bangladesh had the experience, expertise and contacts to be effective at each point in the chain, showing the continued importance of INGOs to the development of successful inclusive business initiatives.

To change the subject. One question crosses my mind. Have we let men off the responsibility hook by focussing on asking women to do even more? Discuss.