Poor communities prove inclusive business works
Thanks to an oft-repeated byword in companies these days, vulnerable people are finding more opportunities for well-paying jobs, raised incomes and increased roles in responding to challenges related to the environment. Filipino companies like EcoIngenuity Inc. and Gandang Kalikasan, Inc. (GKI) know how inclusive business works—and this model is making an impact in the lives of those they work with.
EcoIngenuity Inc. and GKI belong to the category of businesses that tap suppliers and distributors from poor communities. Sometimes, the poor are the consumers themselves and the firm make relevant products and services accessible to them.
GKI operates the beauty brand Human Nature, which strictly adheres to the environmental and safety principles of the Natural Products Association (NPA), a Washington D.C.based nonprofit organization that serves as a natural products industry watchdog to protect consumers from unsafe products.
EcoIngenuity is the company behind the brand Jacinto & Lirio, which creates multifunctional leather goods made of water hyacinth. Known as the most damaging aquatic plant, water hyacinth has infested communities by the Pasig River and Laguna de Bay. Water hyacinth contributes to higher flood levels because it clogs waterways. In communities where there is water hyacinth infestation, fish kills are rampant and the rate of waterborne diseases are high.
For people and planet
Over the years, communities working for both GKI and EcoIngenuity have found opportunities to gain useful skills, increase income levels and connect with relevant markets.
Human Nature’s suppliers of raw materials such as citronella, coco nectar and lemongrass hail from more than 23 communities and social enter- prises across the Philippines. In the communities located in Bukidnon and Camarines Norte, women make up at least 40 percent of the workers.
Most of the farmers employed have limited education and rely on subsistence farming to make a living. They have no land of their own and because they are found in remote areas, they have limited exposure to markets.
To help farmers raise their income, Human Nature builds on available capacity and buys their raw output at fair, abovemarket prices. Human Nature even pays for citronella oil at 40 to 60 percent more than the market value.
Part of Human Nature’s capacity building efforts for marginalized communities include skills training, values formation program and the allocation of profits for scholarships.
Aside from supporting farming communities, 58 percent of Human Nature’s workforce hail from low-skilled, marginalized sectors in Manila and Laguna. These employees receive 68 percent more than the minimum wage so that if they belong to a family of four, they can enjoy better standards of living.
Like Human Nature, EcoIngenuity’s Jacinto & Lirio provides opportunities for women. All of Jacinto & Lirio’s beneficiaries are women from seven different communities in Pasig City, Rizal, Laguna and Pampanga. Most of them are stayat-home mothers who live in water hyacinth-infested areas.
By working with Jacinto & Lirio, these women learned to utilize water hyacinth as material for multifunctional and stylish leather goods such as planners, journals and bags. They now also offer services like embroidery, laser etching and creating full colored prints.
The goods and services are then sold to relevant markets to ensure their businesses will be sustained.
Shared prosperity
Inclusive business took center stage during the Asean Summit, which the Philippines chaired last year.
The Philippine government has also been at the forefront of promoting inclusive business in the country. Under the Philippines’ Investment Priori- ties Plan (IPP) 2017-2019, medium and large firms in the agribusiness and tourism sectors may receive five-year tax holidays if they implement these types of business models.
To qualify for incentives, the larger companies should integrate small and medium enterprises into their value chain. These companies should also be implementing the business models during a threeyear period.
“The impact of inclusive business goes beyond the social impact,” says Trade Undersecretary and Board of Investments Managing Head Ceferino Rodolfo. “As Asean governments try to create a more enabling environment for inclusive business, we look forward to seeing more companies become inclusive businesses that help promote economic and environmental sustainability.”
Citronella farmers in Imbayao, Malaybalay, Bukidnon harvest grass for the essential oils in Human Nature’s products.
Women from the Water Hyacinth Livelihood Initiative process dried hyacinth to produce the plant-based leather used in the creation of Jacinto &Lirio’s products.
Ecoingenuity, Inc., the company behind the Jacinto &Lirio brand, teaches its partner communities the intricate leatherization process that transforms water hyacinth stalks from aquatic pests into profitable material.