Yoghurts, mobile phones, chocolate and computers - these are just a handful of products that, produced and distributed in new ways, are changing the face of corporate social responsibility and sustainable development.
One of the most famous examples is Danone Grameen Foods, which combined the yoghurt maker’s nutritional know-how and the microfinance pioneer’s social enterprise model to create “Shaktidoi,” a nutritional yoghurt produced by Bangladeshis and distributed to children and others. The launch in 2006 generated widespread hype, thanks to a publicity campaign spearheaded by French soccer star Zinedine Zidane and Grameen Bank founder Muhammad Yunus’ Nobel Peace Prize victory.
Since the Rio Earth Summit in 1992, when partnerships were declared the way forward in international development, collaborative activity between businesses, governments and nongovernmental organizations has surged.
The U.S. Agency for International Development is currently involved in 680 “global development alliances,” including a partnership with Cisco Systems Inc. to establish computer networking training centers across Africa, Asia and the Middle East, and a partnership with the Coca-Cola Co. to fund water-related projects in Asia, Africa and Latin America.
The European Commission is also jumping on board. Its leaders have engaged in talks with the private sector to boost cross-sector activity in “Base of the Pyramid” - or developing country - markets.
“Today, I can say that partnerships are transforming the development sector by reinforcing the result culture, by changing the development language and jargon, by motivating staff who are involved in partnerships with business, by creating innovation in a way the development sector alone could not have done and by slowly creating sustainability in development programs,” said Bérangère Magarinos, senior manager of the investments and partnerships program at the Global Alliance for Improved Nutrition, which facilitated the Grameen-Danone partnership.
This fast-moving field has produced its own terminology; terms such as cross-sector collaboration, multistakeholder collaboration and public-private partnership are often used interchangeably. But, whereas public-private partnerships tend to be more legally defined, cross-sector collaborations are more fluid in nature and usually involve multiple transactions, according to Leda Stott, a consultant for the Partnering Initiative, a U.K.-based think tank which facilitates cross-sector partnerships.
She explained: “There is a large difference between public-private partnerships and cross-sector collaboration, also known as multistakeholder partnership, which is more fluid and long-term, and we’re increasingly seeing it across continents from policy levels and issues right down to the local settings where specific thematic issues are being addressed.”
The success of Grameen Danone Foods has triggered similar projects set up by Danone as part of its Danone Communities initiative. Other multinational corporate heavyweights such as Vodafone, Unilever, Proctor & Gamble and Microsoft have also entered into cross-sector partnerships in “Base of the Pyramid” markets.
Microsoft, for instance, is engaged in 45 public-private partnerships through its Partnerships for Technology Access initiative, or PTA, which seeks to improve access to technology in developing countries.
Making the business case
While flourishing partnerships demonstrate the benefits for communities across the globe, what’s in it for the private sector?
Margarinos attributes the evolution in corporate attitudes to an increased awareness of how partnerships can bring benefits to both businesses and development projects in ways that traditional corporate philanthropy cannot.
She also highlighted the opportunity to gain advantage in new and emerging markets, where large populations can mean huge sales. Lower-end markets can also serve as a trial run for innovation, when businesses take certain risks, and if they succeed, use what they have learned in more established markets.
For businesses, profitability will always be “the bottom line,” said Diana Pallais, director of Microsoft’s PTA. But it is crucial to engage consumers and offer wider-reaching social benefits, she stressed.
“It cannot be an afterthought,” she said.
There are several paths that NGOs and businesses can take when seeking to get a piece of the action. Companies usually seek out established NGOs with knowledge and experience of the situation on the ground, according to Jani Lopez, coordinator or membership relations at Brussels-based think tank CSR Europe, which is currently in consultation with both the European Commission and private sector companies about potential collaborations.
“There are no rules,” Lopez said. “Companies have to implement different strategies to the ones they have in developed countries, so they need expertise on development issues, and education on how to access the market.”
Another resource for NGOs and businesses are “brokers” that identify potential partners in local communities.
Stott worked with one such “broker” agency in Zambia, where a small but well-known partnership forum with business, government and NGO contacts was able to bring different sectors together for suitable projects.
“Things are changing and there does appear to be a groundswell towards partnering,” said Stott. “We’re seeing more and more partnerships and a lot of companies actively seeking to cooperate in this way. As well as CSR [corporate social responsibility] people, other business departments are working in this area, and there is also a focus on creating value along company supply chains and entering partnerships as a result.”
The United Nations Commission on Sustainable Development also holds a “partnerships fair” for those seeking collaborators. The annual event can be a valuable resource for NGOs, government agencies and businesses alike.
EuropeAid is currently evaluating ways to boost cross-sector partnerships. It is still unclear whether European Union member states or the European Commission would be better positioned to boost cross-sector collaborations, European Commissioner for Development Louis Michel told industry leaders earlier this year. Michel also discussed the possibility of setting up a fund for cross-sector partnership projects.
With actors from widely diverse sectors coming together, the risk of conflicting interests and failure to work together effectively runs high.
“Partnership is often really a euphemism for subcontracting, when governments or donors want things done more cheaply, and this often means that they are not done as well,” said David Lewis, who specializes in social policy at the London School of Economics. “Also, such partnerships tend to erode the watchdog role of citizens’ groups in maintaining public and private accountabilities, since they become unequal partners with the far more powerful agencies of government or business.”
There are different ways to overcome such challenges. Acoording to Pallais, it is important for partners from different sectors to remain flexible and not tied to “business as usual.”
Compliance, responsiveness and transparency are key to a successful collaboration that has accountable partners at its core, said Stott.
“Many partnership that has failed has been about lack of flexibility,” she said. “Roles and responsibilities obviously will change over the lifetime of the partnership, and, often, key individuals will be the glue that keeps things together. Obviously, if they go, the partnership can break down because there isn’t any continuity or because the partnership hasn’t been seeded deeply enough within the organizations involved and that tends to cause huge problems.”
With the increase of cross-sectoral activity, GAIN and others see the need for the creation of best practices. GAIN is currently developing a framework for standards to monitor the performance of partnerships.