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Back Inclusive business opportunities: rebuilding

Time:2015-11-03 Source:CSR Asia

In the lead-up to the next big climate change conference in December we are battered with catastrophic news from all over the world - El Niño causing a hyperactive Pacific hurricane season, typhoon Koppu hitting the Philippines with extremely heavy rainfall, strongest recorded hurricane in Eastern North Pacific leading to state of emergency in Mexico, and 2015 likely to be the hottest year on record.  

The good news is that we have become much better in preparing for such extreme events and thus been able to prevent rampant casualties, suffering and loss. Building on the experience of typhoon Haiyan in 2013, over half a million people were evacuated last week before typhoon Koppu made landfall in the Philippines.

The role of climate change in increasing extreme weather events is still debated. But it is evident that particularly in this region we are highly susceptible to natural disasters - both weather related and geophysical ones such as earthquakes and volcanic eruptions - as well as to changing climate conditions. While better preparedness and a readiness to respond to extreme events – through early warning systems or pre-established coordination mechanisms – can often reduce potential losses and damages, large parts of the population in Asia face serious risks to their livelihoods. Small-scale producers and subsistence farmers are those hardest hit by natural disasters and changing climate conditions as they lose their income and the ability to feed their families whenever there is too little or too much rain.

Diversifying and strengthening livelihoods can make small-scale producers more resilient to future shocks through more sustainable income-generating opportunities. This will not only reduce their vulnerability to short-term shocks such as natural disasters but also help address more chronic problems such as poverty or lacking access to public services and education. For companies, supporting resilient livelihood programmes might also open up inclusive business opportunities.

When super typhoon Haiyan hit the Philippines in November 2013, it devastated the country’s coconut sector which contributes to the livelihoods of one in every five Filipinos. Some 33 million trees were destroyed and with it the livelihoods of more than one million tenant farmers many of which rely solely on coconut trees. Given that coconut trees take six to eight years to reach productivity, Cargill and the Philippine Business for Social Progress, a non-profit private sector network, entered a partnership aiming at supporting the livelihood recovery and diversification of affected farmers on the island of Leyte. Beyond rehabilitating coconut farms, the project established demonstration farms and trained some 400 farmers to promote integrated farming systems including vegetable production, fish farming, poultry and livestock raising as a sources of income and food. The introduction of cash crops provided an alternative livelihood source for farmers waiting for new coconut trees to bear fruit. While Cargill has no business operations in Leyte, the company considers coconut farmers as important stakeholders. Down the road, the project is designed to allow for the development of an inclusive business model for Cargill that may involve the sourcing of coconut materials as well as other produce from the initiative’s intercrop/cash crop selection for use in its primary product processing operations.

The agribusiness sector stands to gain a lot from working with small-scale producers as investing in their resilience will also lead to more secure supply of agricultural products.  But there are opportunities in other industry sectors too. For example, there is a great need for low-cost, disaster-resistant buildings such as the earthquake resistant homes built by the Abari Foundation after the Nepal earthquake this year. Using locally-available clay, sand, gravel and cement the Foundation is building well insulated, earthquake resistant houses at one-third of the usual cost. Such reconstruction projects can be linked to training programmes for local masons in better building practices to provide employment and improve local building standards in the reconstruction frenzy after large-scale disasters.

There is also a great opportunity for companies to support market-based response and recovery from natural disasters. Companies can support the recovery of important market players in their value chains, such as community vendors or suppliers, and the rehabilitation of infrastructure such as local fishing markets and product processing facilities.

Building the resilience of vulnerable households to be able to take charge of their livelihoods before, during and after a disaster just makes common sense. It also helps tackle poverty and other development challenges that have led to their vulnerability. There is a great need to explore how inclusive business models can help drive investments in resilience building and shift some of the money spent on disaster response into longer-term development programmes.