In the business of helping communities and the environment

Jan 22, 2018


Low-income communities find livelihood opportunities in creating ethically-made sustainable products

Citronella farmers in Imbayao, Malaybalay, Bukidnon harvest grass for the essential oils in Human Nature’s products.

 

Vulnerable people who get integrated into Inclusive Business models are finding opportunities for well-paying jobs, raised incomes, and increased roles in responding to challenges related to the environment. This is how Filipino companies like EcoIngenuity Inc. and Gandang Kalikasan, Inc. (GKI) are making an impact in the lives of communities they work with.


As companies with inclusive business models, EcoIngenuity Inc. and GKI belong to the category of businesses that tap suppliers, distributors, or partners poor communities. Inclusive Business models can also tap the poor as consumers by making relevant products or 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 multi-functional and sustainably made leather goods out 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 water-borne diseases are high. 


For people and planet


The communities that work with both GKI and EcoIngenuity found opportunities to gain useful skills, increase their 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 enterprises across the Philippines. In the communities located in Bukidnon and Camarines Norte, women make up at least 40 percent of the workers. Most of these farmers 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 their potential markets. 


To help these farmers raise their income, Human Nature builds on their capacity of their farmers, provides testing support and seeds, and buys their raw materials at fair, above-market prices. For example, Human Nature purchases citronella oil at 40 to 60 percent above market value. 


Part of Human Nature’s capacity building efforts for marginalized communities are skills training, values formation program, and the allocation of profits for scholarships. The recipients of these scholarship programs receive training and education for agri-social entrepreneurship.


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 legal 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 also provides women with opportunities. All of Jacinto & Lirio’s beneficiaries are women from seven different communities in Pasig City, Rizal, Laguna and Pampanga. Most of them are stay-at-home mothers from Rizal who live in water hyacinth-infested rural areas. They cannot work in a normal office setup because they take care of the households while their husbands are away working. 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.


Jacinto & Lirio helped bring back life to the water hyacinth infested areas and create opportunities for the communities’ mothers who also learned to offer services like embroidery, laser etching, and creating full colored prints. This helped the women increased their households’ income, so they can better provide for their family’s needs. Aside from creating leather goods, they get linked to relevant markets to help ensure sustainability of their income.


Shared prosperity through Inclusive Business


Inclusive Business took center stage in ASEAN 2017, which the Philippines chaired. The Inclusive Business Summit was a highlight of the Philippines’ ASEAN chairmanship. Inclusive business models across the ASEAN also took center stage during the ASEAN Inclusive Business Awards 2017, an integral part of the ASEAN Business Awards initiated by the Department of Trade and Industry-Board of Investments (DTI-BOI) in partnership with the Asian Development Bank, Asian Business Advisory Council, Credit Suisse, and the International Finance Corporation. Both EcoIngenuity and GKI were nominees to the ASEAN Inclusive Business Awards.


Aside from advocating for Inclusive Business in ASEAN, the Philippine government is promoting Inclusive Business in the country. Under the Philippines’ Investment Priorities Plan (IPP) 2017-2019, medium and large firms in the agribusiness and tourism sectors may receive five-year tax holidays if they implement inclusive business models. 


To qualify for these incentives, the larger companies should integrate small and medium enterprises in their value chain. The companies should also be implementing their inclusive business models during a three-year year period. 


“The impact of Inclusive Business goes beyond social impact to make a difference in issues like environmental concerns,” said Trade Undersecretary and Board of Investments Managing Head Ceferino Rodolfo said. “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.” (Jan. 22, 2018)