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A South Indian female farmer is happy with buckets of dairy products in the background

Photo credit: iStockphoto/lakshmiprasad S

The demand for adopting more inclusive value chains in the private sector is apparent on all fronts. Customers are more mindful of their purchases, with extensive access to product information. Investors now prioritize environmental and social impacts alongside profitability, driving the growth of green and impact investors. International regulations increasingly emphasize sustainability and traceability. Companies, especially after COVID-19 disruptions, seek resilience by ensuring commercial viability and risk mitigation. While it might seem like the obvious choice, many companies are yet to adopt inclusive business models. This could be due to a willingness to operate "business as usual" and a lack of awareness about the benefits of inclusivity.

Many companies have not engaged with their source communities and are ill-equipped to incorporate their socio-economic needs into their business plans.  They often need help understanding how addressing these needs can lead to business growth and improved revenues. In such cases, providing inclusive business coaching is critical. ESCAP, as part of its Regional Inclusive Business Models in Agriculture and Food Systems initiative supported by the Bill & Melinda Gates Foundation, is collaborating with local organizations such as Ecociate to provide tailored coaching to 28 enterprises in India and Viet Nam. Partnering with local organizations enables the provision of in-person support and facilitates gaining insights into the regions, ultimately enhancing the impact of the inclusive business coaching.

“Some companies already understand. They are responding to external market requirements, such as the United States and European Union, where questions of sustainability and traceability are now key,” explained Kirti Mishra, Co-Founder and Director of Ecociate.

Unlike social enterprises or corporate social responsibility programmes, inclusive businesses in agriculture use a for-profit model that aim to create value for farmers and their communities – while still creating value for the company. This is because they incorporate smallholder farmers into their value chains in a mutually beneficial way and such opportunities present themselves along the entire value chain.

“We are talking about a sustainable triple bottom line: profits, social impact and environmental sustainability,” Kirti said. “By engaging with the farmers, the social impact is quite extensive. By training them in sustainable production, we are [also] reversing the degradation of our food and climate change, and companies still make a profit. The farmer wins, the company wins, and the consumer wins.”

As the inclusive business coaching continues, more and more success stories emerge of companies making an impact in their local communities by making the low-income and marginalized communities into their value chain as suppliers, distributors, and/or customers. They provide these populations with better income and livelihoods, while generating higher profits, more investment opportunities and visibility, and new market linkages and access.

Photo credit: Vinasamex

“Companies need support to understand and include the multiple needs of the local communities, discover community-based institutions and what value they can bring, collaborate with local and national governments to benefit from existing policies and respond to changing consumer requirements on traceability and ethics,” Kirti explained.

Inclusive business coaching emphasises how sustainability and social impact can be a critical part of core businesses, not just an add-on. It helps companies develop the in-depth knowledge and analytical skills needed to understand how to intentionally engage with those at the base of the economic pyramid and innovate while expanding their business.

While inclusive business models showcase the possibility of achieving economic growth and prosperity while ensuring that no one is left behind, challenges remain in their widespread adoption. Enhancing the policy environment is imperative, but an additional aspect of enabling companies to implement inclusive business models is providing them with the necessary tools and resources. To supplement the inclusive business coaching services and support other firms, ESCAP has developed the “Growing Your Inclusive Agribusiness: A Toolkit for Businesses”, which is based on in-depth sector research and case studies. The toolkit showcases existing experiences and lessons related to related to inclusive agribusiness and distils them into a hands-on guide for practitioners and to help combine social impact with profitability while working with smallholder farmers.

The toolkit will be launched during the Impact Harvest Forum and made available on ESCAP publication channels. The forum will serve as a hub for diverse stakeholders, including coaches and companies participating in the inclusive business coaching program, to explore investment and financing opportunities for inclusive business models. The aim is to foster the scaling up of these models to drive both commercial viability and social impact, uplifting those at the base of the economic pyramid.

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Marta Pérez Cusó
Economic Affairs Officer, Trade, Innovation and Investment Division
Sharon Behn
Consultant, Trade, Investment and Innovation Division
Duygu Cinar
Communications Consultant, Trade, Investment and Innovation
Trade, Investment & Innovation +66 2 288-1234 [email protected]
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