Sus­tain­abil­ity Makes Good Busi­ness Sense – Ex­am­ples from Thai­land

Thai-American Business (T-AB) Magazine - - Contents - Writ­ten by: Em­manuelle Bour­gois

Busi­nesses that op­er­ate in­ter­na­tion­ally, if they are to be suc­cess­ful, must adapt to the cul­tures within which they op­er­ate. I have learned the im­por­tance of this tru­ism by work­ing in the food and agro- prod­ucts sec­tor for nearly 20 years on five con­ti­nents. Fail­ure to ad­just can be life- threat­en­ing.

Nat­u­rally, no busi­ness would opt for cer­tain death. At the same time, not ev­ery busi­ness can de­vise ag­ile mar­ket so­lu­tions as quickly as the chal­lenges arise. But com­pa­nies that un­der­stand the sus­tain­abil­ity par­a­digm are bet­ter pre­pared than most to do so. This is be­cause a sus­tain­abil­ity per­spec­tive has a built in lon­grange view of busi­ness. It of­fers dis­ci­pline to what oth­er­wise could be a catch- as­catch- can ap­proach to plan­ning, es­pe­cially when sus­tain­abil­ity is tied in with the United Na­tion’s sus­tain­able de­vel­op­ment goals ( SDGS).

Once an or­ga­ni­za­tion has made the com­mit­ment to op­er­ate sus­tain­ably, a care­ful study of goals can sug­gest fu­ture proof­ing choices for long- term prof­itabil­ity through prod­uct de­sign, through part­ner­ing, and through strate­gic phi­lan­thropy. Your com­mit­ment will lead you to iden­tify and en­gage your stake­hold­ers around the con­cerns they find most im­por­tant – what we call “ma­te­rial is­sues.”

The good news is that this is not rocket science, but it does re­quire a strate­gic ap­proach, ded­i­ca­tion, and pa­tience. More good news is that it is af­ford­able to a busi­ness of any size which is will­ing to take the time to think through its strat­egy and mar­ket po­si­tion­ing.

What fol­lows are a few in­spi­ra­tional ex­am­ples from the Thai con­text to in­spire in­no­va­tion and to show­case the va­ri­ety of op­tions avail­able. All were on dis­play at last month’s Sus­tain­abil­ity and CSR Fair or­ga­nized by sev­eral for­eign chambers of com­merce in Thai­land and held at the Ananda Cam­pus at the FYI Cen­ter. The ex­pe­ri­ences of the fea­tured busi­nesses il­lus­trate that any in­dus­try and any size of busi­ness has the po­ten­tial to shape sus­tain­abil­ity strat­egy and based upon that, to de­sign a range of projects to in­crease prof­itabil­ity while tend­ing to the needs of the planet and of so­ci­ety.

Above all, for­eign chambers such as AMCHAM play a key role in en­cour­ag­ing and doc­u­ment­ing the sus­tain­abil­ity jour­neys of their mem­bers by shar­ing these and other in­stances of how re­spon­si­ble busi­nesses im­pact their host coun­tries fi­nan­cially, en­vi­ron­men­tally, and so­cially. Most im­por­tant is the les­son that sus­tain­abil­ity and prof­itabil­ity are not at odds, but in fact go hand- in- hand.

PROF­ITABIL­ITY AND SUS­TAIN­ABIL­ITY BY DE­SIGN

A few com­pa­nies have demon­strated that the sus­tain­abil­ity out­look is part of their DNA. It is built into their innovative prod­ucts or ser­vices. One ex­am­ple is Aloe Drink for Life whose aloe drinks are no­table for their fresh­ness, which has re­sulted in a pre­mium prod­uct serv­ing the high end of the mar­ket. This has been made

Once an or­ga­ni­za­tion has made the com­mit­ment to op­er­ate sus­tain­ably, a care­ful study of goals can sug­gest fu­ture proof­ing choices for long‐ term prof­itabil­ity through prod­uct de­sign, through part­ner­ing, and through strate­gic phi­lan­thropy.

pos­si­ble through the com­mit­ment of their farmer sup­pli­ers who are at the core of their busi­ness model.

Us­ing a co­op­er­a­tive struc­ture to en­gage these farm­ers, to­gether with a short and fast sup­ply chain, the ven­ture has re­sulted in above- av­er­age fi­nan­cial re­turns. This out­come came about or­gan­i­cally through the co­op­er­a­tive con­tri­bu­tions of farm­ers on the one hand and the com­pany on the other.

Aloe Drink for Life con­trib­utes man­age­ment ex­per­tise and prod­uct mar­ket­ing skills, plus ac­cess to in­ter­na­tional dis­tri­bu­tion chan­nels. For the farm­ers’ part, they grow a prod­uct to the re­quired world stan­dard. The en­ter­prise prof­itabil­ity en­sures the long- term health of the farm­ing com­mu­ni­ties and the en­vi­ron­ment. With con­sis­tent at­ten­tion to qual­ity, im­proved farm­ing prac­tices have led to the in­tro­duc­tion of “Bio,” a new and pop­u­lar or­ganic prod­uct line.

An­other in­spir­ing ex­am­ple of a sus­tain­abil­ity- in­spired busi­ness is Wheig, a com­pany de­voted ex­clu­sively to con­vert­ing waste to en­ergy. With lo­ca­tions around the world, their sig­na­ture project in Thai­land is cen­tered around Mega Mall Bangna Shop­ping Cen­ter, the largest in Asia.

Cap­i­tal­iz­ing on tech­nolo­gies de­vel­oped else­where, Wheig is able to con­vert mixed waste from the 35,000- square- me­ter shop­ping cen­ter into bio­gas to gen­er­ate elec­tric­ity, and into com­post and lesser by prod­ucts.

Be­yond the pos­i­tive con­tri­bu­tion to the en­vi­ron­ment, the unique­ness, adapt­abil­ity, and trans­fer­abil­ity of the sys­tem are key. Also no­table is the co- de­sign com­po­nent de­rived from the com­bined in­ter­ests of the ma­jor re­tail stores which were seek­ing waste dis­posal so­lu­tions that did not neg­a­tively im­pact the en­vi­ron­ment.

SUS­TAIN­ABIL­ITY BY PART­NER­ING

In ad­di­tion to the in­no­va­tion shown in the de­sign- driven ven­ture above, a sus­tain­abil­ity minded pro­gram can be de­vel­oped around busi­ness part­ners who have shared en­vi­ron­men­tal and com­mu­nity de­vel­op­ment goals with sim­i­lar tar­gets and key per­for­mance in­di­ca­tors ( KPIS).

Col­lab­o­ra­tion is of­ten a great way to get started with sus­tain­abil­ity while fo­cus­ing on re­turn on in­vest­ment.

To il­lus­trate this, here are two mean­ing­ful part­ner­ships where in­ter­na­tional busi­nesses iden­ti­fied lo­cal needs which lo­cal part­ners have helped build on to cre­ate mar­ket dif­fer­en­ti­a­tion.

The first ex­am­ple is the Con­rad Bangkok Ho­tel, from the high- end hos­pi­tal­ity in­dus­try, show­cas­ing their ef­forts and con­tri­bu­tion to en­vi­ron­men­tal and plan­e­tary im­prove­ment.

Con­rad Bangkok has part­nered with a food com­pany, Asia Ar­ti­san, which pro­duces rice crack­ers based on tra­di­tional recipes and pro­duced in lo­cal com­mu­ni­ties. Nat­u­rally, the crack­ers meet all food safety stan­dards while of­fer­ing an au­then­tic lo­cal taste. The Con­rad presents these snacks it its rooms in place of the tra­di­tional “ap­ple and ba­nana” fruit plate, which too of­ten ends up as food waste.

Along with the crack­ers is an ex­plana­tory note de­scrib­ing the rice cracker tra­di­tion and its con­tri­bu­tion to the com­mu­nity’s earn­ings.

In the sec­ond ex­am­ple, Bangkok ad­vi­sory Light­blue En­vi­ron­men­tal Con­sult­ing col­lab­o­rates with pri­vate com­pa­nies to work to­wards so­lu­tions to the food waste is­sue. Light­blue of­fers tech­ni­cal ex­per­tise and im­ple­men­ta­tion guid­ance at the ho­tel oper­a­tions level through a vol­un­tary sys­tem known as the PLEDGE ™ , a reg­i­men that can re­sult in as much as a 20% to 25% de­crease in food waste.

One PLEDGE ™ sub­scriber, the Sam­pran River­side Ho­tel, is an eco- tourist des­ti­na­tion with a com­mit­ment to sus­tain­abil­ity that is sit­u­ated an hour from Bangkok on the idyl­lic Ta­chine River. The ho­tel’s F& B de­part­ment sources its pro­duce from neigh­bor­ing or­ganic farm­ers and man­ages waste in ac­cor­dance with its PLEDGE ™ com­mit­ment. This not only min­i­mizes waste but also cuts costs while serv­ing as a role model for guests and em­ploy­ees alike re­gard­ing the han­dling of food.

SUS­TAIN­ABIL­ITY BY PHI­LAN­THROPY

One fi­nal case show­ing how sus­tain­abil­ity think­ing can de­liv­ery prac­ti­cal busi­ness ben­e­fits is in the area of strate­gic phi­lan­thropy.

The Airasia Foun­da­tion is the phil­an­thropic arm of the air­line that sup­ports so­cial en­ter­prise by of­fer­ing seed fund­ing and busi­ness men­tor­ing to qual­i­fied start- ups. One ben­e­fi­ciary has been the Muser Cof­fee Hill project, a sup­port pro­gram run in part­ner­ship with the Thai so­cial en­ter­prise in­cu­ba­tor, Change Fu­sion. The goal is to in­crease Muser Cof­fee Hill’s pro­duc­tion ca­pac­ity and ex­pand its dis­tri­bu­tion chan­nels.

Cof­fee plant­ing in Doi ( Moun­tain) Muser was ini­ti­ated over 40 years ago as part of a Thai Royal ini­tia­tive to erad­i­cate opium cul­ti­va­tion from the high­lands along the Myan­mar bor­der. The plan in­volved switch­ing farm­ers from opium to corn cul­ti­va­tion. But we now know that mono- crop­ping is harm­ful, with nu­mer­ous side ef­fects in­clud­ing soil ero­sion and de­te­ri­o­ra­tion, bio­di­ver­sity loss, and nu­tri­ents leach­ing neg­a­tively im­pact­ing the ecosys­tem.

The ef­fect of the shift to corn cul­ti­va­tion on farmer liveli­hoods proved se­vere. Farm­ers be­came vul­ner­a­ble to crop fail­ures, price fluc­tu­a­tions, over- re­liance on mid­dle­men, and over- de­pen­dence on chem­i­cal fer­til­iz­ers and pes­ti­cides. The re­sul­tant loss of for­est cover and bio­di­ver­sity in­ad­ver­tently de­graded hill tribe cul­tures, val­ues, and well- be­ing.

Con­se­quently, the Muser com­mu­nity sought an al­ter­na­tive to corn farm­ing, and some among them be­gan cul­ti­vat­ing shade- grown cof­fee. Those who did so recorded greater in­come sta­bil­ity over time. They also faced less pres­sure to re- lo­cate from Doi Muser lands des­ig­nated as part of the Taksin­ma­harat Na­tional Park, be­cause keep­ing the cof­fee- grow­ers in place was an aid to for­est re­ha­bil­i­ta­tion: farm­ers re­planted na­tive trees to cre­ate the canopy needed to cul­ti­vate shade- grown crops.

To en­cour­age still more farm­ers to switch, Muser Cof­fee Hill be­gan pur­chas­ing beans at fair trade prices from area farm­ers. The com­pany’s fur­ther ex­pan­sion is lim­ited only by the ca­pac­ity of its cof­fee roaster and its ac­cess to cap­i­tal to buy larger quan­ti­ties of fresh beans.

To help im­prove sales and reach new buy­ers, Airasia con­nected Muser Cof­fee Hill with mar­ket­ing and com­mu­ni­ca­tions spe­cial­ists to de­velop a new brand iden­tity that bet­ter po­si­tioned shade- grown cof­fee in the mar­ket. With a logo re- fit, new pack­ag­ing, and pro­fes­sional com­mu­ni­ca­tions ma­te­ri­als, Muser Cof­fee Hill prod­ucts have be­come well known.

This brand iden­tity high­lights the Muser hill tribe her­itage, the so­cial en­ter­prise’s so­cial and en­vi­ron­men­tal mis­sion, and the qual­ity of its shade- grown cof­fee beans. Since Jan­uary 2016, Muser Cof­fee Hill’s new drip cof­fee has been avail­able on Thai Airasia flights. Muser Cof­fee Hill prod­ucts are also dis­trib­uted by the Bangkok- based or­ganic and fair trade so­cial en­ter­prise, Nokhook Group.

The Airasia Foun­da­tion case shows how strate­gic phi­lan­thropy can play a cru­cial in­cu­ba­tion role given a mar­ket- ori­ented so­lu­tion as a long- term value- added driver. It demon­strates how glob­al­ized econ­omy driv­ers are rel­e­vant to the lo­cal busi­ness eco- sys­tem, with the abil­ity to build pos­i­tive change for prof­itabil­ity.

All ex­am­ples cited above can pro­vide in­spi­ra­tion for the cre­ativ­ity needed to think, de­sign, and build sus­tain­abil­ity op­tions with the right part­ners. And, as un­der­lined be­fore, these cases show how for­eign busi­nesses can add value to the lo­cal ecosys­tem, cre­at­ing pos­i­tive im­pact by rec­og­niz­ing the im­por­tance of cul­tures, val­ues, and po­ten­tial syn­er­gies to cre­ate sus­tain­able prof­its.

Em­manuelle Bour­gois is Founder and Di­rec­tor of Fairagora Asia. She can be con­tacted at emabour­gois@fairagora.com.

The or­ga­niz­ers of the Sus­tain­abil­ity and CSR Fair with the au­thor ( third from left)

The Pled­getm Food Waste Pre­ven­tion Pro­gram - an in­de­pen­dently ver­i­fied 9- point com­mit­ment pro­gram de­signed to cut food waste, save on food costs and get your ef­forts recog­nised

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