Have the cake

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Have the cake eat it
Business Solutions to Sustainability Challenges
Monika Weber-Fahr Business Line Leader General
Manager Sustainability Business Innovator
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Advisory Services Support Private Sector
Development
Firms need 3 things to flourish
The right laws and structures Money Knowledge
to succeed
Business Enabling Environment
Access to Finance
Corporate Advice
PP Interface
for Infrastructure
Environmental and Social Sustainability
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What if

• Privately run and financed firms could build
  their profitability around the promise to protect
  natural resources
• (? Whole Foods, Patagonia)
• their market size around affordable products
  and services
• (? Walmart, IKEA)
• their operational efficiency around low-carbon
  energy solutions
• (? Amazon.com, eBay)

What if such solutions would become the norm?
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Think about it

• When a well-run business applies its vast
  resources, expertise and management talent to
  problems it understands and in which it has a
  stake, it can have a greater impact on social
  good than any other institution or philanthropic
  organization.
• Michael Porter and Mark KramerHarvard Business
  Review, 2006

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Sustainability Complementary Approaches

• Sustainability
• .. as good management
• as an (up-) market niche
• .. to identify new markets
• to re-organize markets?

Design, test, refine replicate business models
and technologies that promise to deliver social
and environmental benefits while also increasing
firm value.
IFCs Advisory Work
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Making the Private Sector Work forClimate Change
The Problem
A Solution

• Creating markets for EE lending
• Train small firms on energy efficiency
• Explain to banks the credit risk of such lending
• Use guarantees to share the risk
• Provide a dedicated credit line

• Energy inefficiency
• Small firms are one of the largest consumer of
  energy and drive the economy in most emerging
  markets
• They use energy least efficiently.
• They dont invest in efficiency improvements.

Donors have funded Training and outreach
efforts and the partial credit guarantee Markets
changedRussia, China, Southern Europe
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Making the Private Sector Work forWorkers in a
Globalizing Economy
The Problem
A Solution

• Creating market-based solutions
• Buyers roundtable One standard
• Standard enterprise assessments linked to
  immediate training on how to change things
• Tripartite dialogue with employers, employees,
  government

• Labor standards
• are a concern for many international buyers
  particularly in consumer goods (e.g. textiles)
• are assessed and enforced through many individual
  firm audits
• No time for change or dialogue.

Donors have funded ILO/IFCs training and
outreach efforts and the design of global
tools Markets changed Cambodia Beginning
Vietnam
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Making the Private Sector Work forBiodiversity
Protection
The Problem
A Solution

• Creating market-based solutions
• Showcase and rewardbetter management practices
• Encourage adoption by large players.
• Reward the offset of biodiversity loss in a
  different location.

• Biodiversity depletion
• can happen because of large- scale agriculture of
  commodities.
• is sometimes inevitable around a specific
  project.

Donors have fundedGlobal program to reward
showcase better management practices Markets to
changePalm oil, soya, cocoa, sugarcane
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Business Solutions to Sustainable Development

• Efficiencies for the Real Sector

• Efficiencies for the Financial Sector

• Long-term solutions instead of short-term risk
  management
• Labor standards Community investment
• Natural resources management standards
• Resource efficiencies
• Cleaner production
• Sustainable energy

• Long-term solutions as new markets
• Gender-specific credit lines
• Access to finance for energy
• Mobilizing innovative capital
• Sustainability indices
• Innovative financial instruments
• Clean tech investments

International Development Priorities
Climate Change Food Security Millennium
Development Goals Frontier Countries
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Portfolio of ProjectsBy Practice Areaas of June
30, 2008
87
138,132,535
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Portfolio of Projects By Regionas of June 30,
2008
87
138,132,535
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Innovation Efforts Are Starting to Show Results
projects
Energy Finance
Sustainability Investing
Cleaner Production
Labor Standards
NRM Standards
Gender Entrepreneurship
Human Rights
maturity
Indicative examples shown here. In total, there
are over 12 innovation efforts in the Innovator
portfolio.
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Financial Partners - Commitments
75.3 million 18 financial partnersAverage
contribution 3.6 million per donorGEF
contributions 215.8 million
Data as of November 12, 2008Cumulative since 1997
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Budget Expenditures FY08 (25 million)
PROJECT RELATED EXPENSES (91)
NON-PROJECT RELATED EXPENSES (9)
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Have the cake eat it
Business Solutions to Sustainability Challenges
Monika Weber-Fahr Business Line Leader General
Manager Sustainability Business Innovator