THE BLOG
07/03/2013 11:18 am ET | Updated Sep 01, 2013

The World According to Grameen Social Inc.

Fancy doing business without necessarily becoming wealthier as a main goal but improving a social situation? Well seems like Social Business is what you have been looking for.

As Danone Vice Chairman, Emmanuel Faber, puts it: "Social Business reconciles the manager with him/herself as well as with her or his employees." And he knows what he is talking about: more than one third of his co-workers prefer to invest in danone.communities social fund rather than the Danone subsidized employee fund that has a much higher yield. Danone recognizes that their initial investment in Bangladesh has spurred radical innovations, motivated its employees and helped open new doors in emerging markets.

Last Friday saw an unlikely gathering of multinational CEOs, experienced social business entrepreneurs, first Nepalese billionaire, Mr. Binod Chaudhary, looking at changing the face of his country, Malaysian Crown Prince Yam Tengku, US Ambassador Dan Mozena as well as academicians in search of advanced forms of social trade concepts at the 4th Social Business Day 2013 organized in Dhaka, Bangladesh by the Yunus Centre. The momentum is definitely there. Lots of young people are involved in coming up with the latest innovative ideas that could change the face of their country, Bangladesh, one of the poorest countries on Earth (ranked 154th GDP (PPP) per capita in 2012 by the International Monetary Fund). Yet Bangladesh is also ranked 42nd out of the first 50 countries analyzed according to the newest Social Progress Imperative (SPI) index. When compared with the GDP per Capita, SPI indicates clearly that Bangladesh has a similar profile as Kenya or Senegal and even next to India, only showing a higher GDP for equivalent SPI index. One reason being the high performance of Bangladesh in providing opportunities for people to improve their position in society. Needless to say that Grameen's Social Business and famous Bank as well as BRAC Bank, ASA (Association for Social Advancement) and other great non-governmental development organizations have something to do behind this first SPI interesting snapshot of Bangladesh, also seen as the social laboratory of the world.

According to its designer and 2006 Nobel Peace Prize -- Professor Muhammad Yunus -- Social Business is a non-loss, non-dividend company designed to address a community objective within the highly regulated marketplace of today. It is distinct from a non-profit company because the business should seek to generate a modest profit that will be used to expand the company's reach and improve the product or service or in other ways to subsidize the social mission. In a Grameen fashion (Grameen means "village" and is well known as Grameen Bank, a micro-credit bank service to Bangladeshi villagers) a typical Social Business is, but not limited to, a joint-venture between Grameen, providing the local cultural and societal background, and an international entity that is an expert in its industry field and ready to invest without expecting to generate a profit, with the capacity to recover its principal investment. Indeed, main objectives of a Social Business are to lift poor people off the poverty line and reinvest a company's profits into expanding the commerce. Entities such as Grameen-Veolia, Grameen-BASF and Grameen Caledonian College of Nursing all have this joint venture setup in common. Veolia Water is the world leader in water services, BASF is the largest chemical company in the world and Glasgow Caledonian University is one of the UK's most dynamic and especially innovative universities (Professor Yunus being the first non-British Chancellor in Scottish history since 2012). Aligning such an incredible pool of experts agreeing to solely focus on people being less vulnerable to poverty is truly remarkable, especially when one knows that these companies have not yet broken-even, with some of their service models having changed several times before finding the right approach to address the bottom-of-the-pyramid market. Grameen-Veolia has a water treatment plant two hours south of Dhaka which provides safe drinking water at the lowest production cost to local villagers and protects them from phreatic water tap national network which contains arsenic. Grameen-BASF is distributing affordable mosquito nets treated with a chemical protection to keep its users safe from bites and malaria for several years and Grameen-Caledonian College of Nursing provides certified nursing education to young girls, amongst them are the daughters of the then poor villagers who received their first loan back in the mid-seventies! This young generation is now looking at post-graduate studies with loans that can only start to be repaid one year into the job.

Some would say that investing in such a venture is a great public relations (PR) move too. True, but which company that claims to participate in Corporate Social Responsibility (CSR) does not do it for the PR and/or cost saving tactic first? The difference is that Veolia, BASF, Glasgow Caledonian University and Danone also do it to find solutions to poverty, to capitalize in the customers of the next generation and to educate skilled nurses who will take care of our baby-boomers, if not ourselves. They are truly, in what sustainability expert John Elkington calls, the intergenerational sustainable vision that any corporate leaders today should have at sight. A "Zero Poverty" planet of tomorrow can be a reality if we all look at the kind of concept that Social Business brings to the groundwork of a solution to fight global poverty with the openness required. Yunus' "putting poverty in museums" is not only a reality that takes shape after 40 years of field analysis, it also builds up a pool of corporate customers of tomorrow in a more well-adjusted economic environment. What is the cost of poverty to our societies, companies and international institutions today? How much money is being spent in so-called CSR programs for PR purposes or even advertising campaigns with poor outcomes? Ask Veolia, Danone, BASF or Glasgow Caledonian University if their investment hasn't generated the best return or goodwill in recent years? On top of that it brought them innovative concepts, dedicated employees, international recognition and ease of doing business in any new market prospected -- nothing to compare with often weak CSR involvement.

In developed countries Social Business is also seen as part of the solution to repopulate campaigns fighting against urban migrations and to generate jobs in a low cost entity well-adapted to the tough times currently experienced by these countries. Furthermore, it brings a comprehensive approach to tackle environmental issues anywhere in the world. In Haiti, after centuries of investments in reforming the lost forestry cover (Haiti has less than 2 percent of forest left nowadays) experts found out that without including society in the effort of seeding a forest that lasts for generations, funds will be wasted as they were too many times previously. The minute a tree reaches young adulthood it is cut for charcoal or other usages. With the inclusive approach of a Social Business addressing not only alternative sources of heat creation or cooking habits, hiring villagers living near these forests, and replanting trees that are valued through new business creations, there is a chance that this new concept of entrepreneurship brings solution to a problem that has remained unsolved for centuries.
It is to the so-called "beautiful dreamer" Professor Yunus to conclude: "let's invent the future without poverty. We have science-fiction cinemas laying the ground for future technology discoveries. Why not looking at developing social-fiction movies to write what will be a future without poverty?"

Any social Steven Spielbergs out there?