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In Good Company: Singh on CSR

~ Connecting the dots between Business, Society & the Environment

Tag Archives: Social Entrepreneurship

Insurance Giant Allianz Targets Climate Change Risk: Expending “Unavoidable Emissions”

09 Wednesday Jul 2014

Posted by Aman Singh in CSRwire, ESG

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allianz, barclays, biodiversity, carbon offsetting, climate change, CSRwire, deforestation, energy, Environment, ESG, greenhouse gas emissions, impact investing, insurance, Nonprofits, Philanthropy, redd, regulation, renewable energy, social enterprise, Social Enterprise, Social Entrepreneurship, Social Impact, Sustainability, sustainability, wildlife works


Picture_Martin_EwaldAfter chatting with Barclays’ Director of Citizenship Jillian Fransen on the financial institution’s allegiance to carbon offsetting and how she is leveraging the increasingly popular mechanism to not only offset its unavoidable carbon footprint, I turned to insurance giant Allianz who has also chosen to use carbon offsetting to target deforestation and reduce its environmental footprint.

Excerpts from my conversation with Martin Ewald, Head of Investment Strategy and Renewable Energy/Infrastructure Equity with Allianz Global Investors.

—————-

Describe your emissions reduction program and goals.

Allianz has set itself the target of avoiding, substituting and reducing its own CO2 emissions and is 100 percent climate-neutral since 2012. This means that all remaining emissions are being neutralized – in particular through direct investments in climate protection projects.

By 2015, Allianz aims to reduce its carbon footprint per employee by 35 percent compared to 2006.

What are “unavoidable emissions”?

Unavoidable emissions are CO2 emissions that are intrinsically linked to our business activity, like business travel, that we cannot always avoid or only avoid at very high expense. These emissions are still harmful to the climate. Corporates can take a leadership role in offsetting emissions related to their business activity by investing in responsible sustainability projects – this is not required by regulation in our sector.

But it is responsible behavior and makes good business sense. In fact, we have identified climate change as one of the three most critical sustainability challenges for Allianz (alongside demographic change and access to finance).

Where does offsetting fit into your sustainability strategy?

In addition to our carbon reduction target, being a carbon neutral business is the second pillar of our commitment and contribution to achieving a low-carbon economy.

In 2012, 175,000 credits, each accounting for one metric ton of carbon avoided, were sourced and retired from projects we support – retiring credits means that CO2 certificates, each representing one ton of avoided emissions, are taken off the market. Our remaining carbon footprint was neutralized by credits bought from the carbon market, which underwent a stringent sustainability screening to ensure they met the same high standards as the credits from projects we invest in.

The quality of the underlying projects determines the value of each and every credit in the voluntary sector, and REDD+ rate amongst the highest valued carbon credits.

Why did you choose REDD+ as one of the preferred offsets?

Our investment in REDD+ is consistent with our strategy of supporting effective climate projects in emerging and developing countries. We have invested in forest protection in Kenya with Wildlife Works, one of the leading developers of REDD+ projects. These projects don’t simply protect threatened forests; they also involve the local population and provide them with a source of livelihood.

REDD+ will also raise awareness of how to deal with resources in a responsible manner, besides helping preserve the habitat of the local population. Due to the considerable impact generated, we plan to continue investing in the REDD+ sector.

How has supporting REDD+ benefitted your company – and its stakeholders?

For the CO2 stored by the forests we receive certificates, which we can then use to offset business-related CO2 emissions. This way we ensure our climate neutrality and at the same time make a worthwhile investment. For us the yield also includes enhancing climate protection and biodiversity. We may also benefit from positive branding, but it is too early to tell since 2012 was the first year that we were carbon neutral.

As a financial institution, what is Allianz’s most challenging source of carbon emissions?

Ninety eight percent of our emissions stem from energy, travel and paper. So, the focus is on reducing CO2 emissions in these three areas.

In times of growing business, this is a challenge but we managed to reduce emissions across all three key areas in 2012, i.e. by sourcing lower-carbon energy or by making better use of video conferencing rather than traveling to business meetings.

How are these programs hallmarks of “responsible corporations”?

Since our business activity is not very carbon intensive, investing in REDD+ and similar projects today allow us to lock-in emission reductions over many years. We consider this to be responsible corporate practice: leveraging our capital base to build up the low-carbon infrastructure of tomorrow – be it forest protection or renewable energy, railways or electricity grids. This strategy also pays off, which is important to meet the expectations of our clients and shareholders. And this is a good basis to expand on our sustainable leadership agenda.

What role do you prescribe to Allianz in addressing climate change globally and locally?

We have introduced a group-wide strategy, which commits us to play a lead role in addressing climate change. For us it is about addressing the risks, e.g., the uptake in insurance loss from natural catastrophes, and making use of the opportunities. We have invested about EUR 1.7 billion in renewable energy projects, for instance, and set up a renewable energy fund, which has already attracted significant financial interest from our clients.

Moreover, we offer around 130 green products and services to our customers, including renewable energy home insurance, advisory services related to renewable energy and insurance premium discounts for drivers of electric/hybrid cars. The aim is to integrate climate change into our business  model, step by step building the business case for a climate friendly economy.

How can the private sector play an important role in reversing/addressing climate change? 

By understanding the climate issue as an investment case. Protecting forests is the cheapest way of saving carbon. To speak bluntly: if we first cut down the forest and then try to reduce the same amount of carbon we emitted, it would be much more expensive than just avoiding deforestation.

But as stated before, the most distinguishing factor about REDD+ is the opportunity to carry out investments that help improve social livelihoods and support local communities as well. Therefore supporting projects like the pioneering activities of Wildlife Works are appropriate activities that corporations need to support.

As long as there is no internationally binding climate protection agreement and as long as national regulation lacks teeth, the REDD+ market allows us to participate in voluntary projects around the world to address climate change. Consequently we have just carried out an additional REDD+ transaction in Indonesia.

What do you expect from policy makers to help expand your clean investments?

We stand at a critical juncture. We can continue business as usual with a small but dynamic niche of renewable energy projects and a reliance on fossil fuels for the big chunk of our economy. But this will not prevent dangerous levels of global warming.

Or we embark on a trend change, as we hopefully are seeing right now in Germany.

For this, we need a clear and reliable regulatory framework that gives investors appropriate incentives and the necessary regulatory certainty to finance clean technologies rather than coal or oil.

Originally written for and published on CSRwire’s Commentary section Talkback on September 5, 2013.

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The Social & Environmental Case for Carbon Offsetting: In Conversation with Barclays

09 Wednesday Jul 2014

Posted by Aman Singh in CSRwire

≈ 2 Comments

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Accountability, barclays, carbon, carbon offsetting, climate change, CSR, CSRwire, deforestation, Environment, ghg, governance, jillian fransen, leadership, lending practices, redd, social enterprise, Social Enterprise, Social Entrepreneurship, Social Responsibility, Supply chain management, Sustainability, sustainability, wildlife works


This is Part 1 of a series examining how leading companies are leveraging carbon offsetting and REDD+  to sustain their environmental footprint and target climate change.

“Our vision is about having a proportionate social impact on society.”

That’s how Jillian Fransen, Barclays’ director of Citizenship describes the bank’s elevated – and recently refreshed – sustainability agenda. Among the new elements: a three-year CSR strategy released last year, new stretch environmental targets, supporting growth among the SME sector, and a new Balance Scorecard, which benchmarks remuneration for the bank’s top 125 executives according to four Cs – one of which is Citizenship.

Fransen’s team is also on the cusp of launching an industry-leading Code of Conduct, besides managing and maintaining a 60 million-pound Community Investment Fund and a 20 million-pound Social Innovation Fund, created specifically to seed projects and partnerships that really push the needle on sustainability.

But, of all the things Barclays is doing, what piqued my interest was a core concentration on reducing its unavoidable emissions through carbon offsetting in the company’s climate program.

Carbon Offsetting: Need vs. Efficacy

Now while carbon offsetting has suffered from its share of misconceptions – and remains a relatively new idea in the U.S. – there is a critical need today to get past the debate and begin addressing unavoidable emissions.

Because despite the most robust plans in place that curb air travel and other activities, commerce requires both energy and fuel. And with the growth, availability – not to mention supporting infrastructure – of renewables relatively slow, it becomes a question of operating with what’s available. That is the reality for businesses. And Barclays is no exception.

Calling them “unavoidable emissions,” Fransen explained:

“We buy offsets for the footprint we incur outside our minimization program. We are doing everything we can to minimize emissions but there are those unavoidable emissions that we just cannot remove – like air travel. So to minimize their impact, offsetting fits quite well in our Climate Program.”

The Program focuses on three areas: climate change, developing products for low carbon economies and risk management services for clients with low carbon opportunities.

The firm, which wants to minimize its environmental footprint by 10 percent by 2015, works with Wildlife Works and Reducing Emissions from Deforestation and Forest Degradation [REDD+] projects for its offsets strategy. According to the United Nations website, REDD+ “is an effort to create a financial value for the carbon stored in forests, offering incentives for developing countries to reduce emissions from forested lands and invest in low-carbon paths to sustainable development.”

As Sibilia decoded in his article, the intended impact of the offsetting (emission reductions) leads to not only forest conservation but also a parallel movement to create self-sustaining social enterprises that recuperate the local economies and build social independence. Therein lies the true impact of UN REDD Programmeoffsetting, he concluded.

For Fransen, similarly, the appeal of working with REDD+ lay in Wildlife Works’ expertise and experience in protecting threatened forests  – and its track record with local communities. “Twenty percent of emissions come from deforestation so it made sense for us to partner with organizations that could help us find areas where forests were being destroyed. That way we can have direct impact where it is most needed,” she said.

Then there is the added advantage of targeting local communities in key markets where Barclays operates. “We wanted to take accountability for our footprint. Additionally, Wildlife Works operates in Kenya, which is a key market for us. We are in 13 African countries – the oldest bank across eastern Africa — so having an on-the-ground partner there was key for us. ”

The real impact of implementing a carbon offsetting strategy then for Barclays?

“Create accountability for a footprint that the firm is otherwise unable to get rid of. That wakes people up. When we can have localized impact, it’s a win for us,” she responded.

Climate Change: Decoding the Impact of a Bank

Besides what seems to be the main area – air travel – what is Barclays most challenging source of carbon emissions?

“We have a network of hundreds of small branches. Our biggest challenge is availability and collection of relevant data about our water and paper use as well as waste. Not all our operations have the same level of management and facility support. Especially in Africa, it is very hard to ensure commitment to some of the improvements that are required in this year,” she said.

Another challenging area is the bank’s indirect impacts through its lending practices. “Where we choose to lend and what impact that has on the environment is critical. We need to hit this on a macro level. When you go to lend to an oil and gas company, we need to stand up to our commitment. They work with a minimum of 16 banks – we’re one piece of a large network,” she explained.

The Need For “Some Serious Leadership”

While our conversation mostly focused on Barclays’ carbon reduction strategy, it was hard to contextualize that without questioning what role Fransen’s contemporaries in the financial sector needed to play to sensibly address climate change.

Could Barclays continue to make progress without reciprocation from a sector busy repairing tarnished reputations from the financial crisis?

“There is a major shift going on toward a realistic understanding of what we need to do to adapt to climate change. In my opinion, none of this is happening quickly enough though. We need some serious leadership within our industry in the next five years to change gears on climate change,” she emphasized.

“Our biggest challenge is making it real for everyone in the organization. We have 142,000 employees that manage a matrix of clients and customers. The [impact they can have] is profound. I’d like to see us capitalize on this matrix much more. There’s a feeling, not limited to banking, that we’re doing our bit and everyone else will do theirs – and we’ll be okay.”

“Fact is, the issues are way more pressing for us to rest on that assumption.”

Originally written for and published on CSRwire’s Commentary section Talkback on August  28, 2013.

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Changing Business from the Inside Out: How to Pursue a Career in CSR and Sustainability

07 Monday Jul 2014

Posted by Aman Singh in CSR

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amd, Apple, Business Ethics, Career advice, career advice, career in sustainability, careers, CSR, CSR jobs, epa, gap, intel, Job search, Jobs in CSR, jobs in CSR, Leadership, Net Impact, Nike, Social Entrepreneurship, social media, supply chain, Sustainability, sustainability jobs, tim mohin, Work culture


What does one do to get a job in the field of corporate social responsibility? And moreover, how do you excel at something so nebulous and undefined?

I’ve spent the last eight years trying to decode these issues and report about what companies are doing to not only embrace the essential message underlining CSR but also integrate a sense of responsibility within their culture. I interviewed practitioners, researched numerous CSR reports, and conducted multiple surveys on the issue to identify what exactly translates into a “CSR career” or “CSR job”.

While feedback, comments and social media indicated that my reporting was helping raise awareness and compelling professionals to think about their choices, I realized that what we needed was a reference guide, an encyclopedia of sorts, a How-To of practical tips from executives who are embedded in large corporations and have experience influencing change, leading behavior change and staying patient when the profits vs. CSR debate rears its head.

Turns out, Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations is the handbook I was looking for.

Written by Tim Mohin, Director of Corporate Responsibility at AMD, the book offers critical pieces of advice and practical tips for current and aspiring professionals who believe they can make a difference through their careers.

Tim_MohinAnd that is the segment that Mohin wants to target. He told me a couple of years ago that he wanted to write a book aimed at people who “want to change the world through business.” Then, jobs were  few and we were struggling as an economy. Occupy Wall Street was yet to take shape.  And corporations were focused on surviving a deep recession not worrying about their social responsibility quotient.

But as we know today, this recession has not only furthered the divide between consumers, employees and corporations on a whole host of social, environmental and economic issues, but also pointed the finger to each and every one of us. Where does the blame lie? How did we get here?

In this vacuum of trust in the marketplace, Mohin’s book is a much-needed antidote for professionals and students who want to restore our economy, while protecting the environment and benefitting society, but lack the practical advice.

Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations

We sat down for a heart to heart about the book, his tips, his journey at AMD and much more.

“The book is meant for people who want to use their careers to change the world. I want to enable the next generation to create the change they want to see happen,” he began. For Mohin, a vocal co-supporter of student-led organization Net Impact whose conferences attract thousands of job seekers, students and professionals each year, the field isn’t as “rosy as it looks.” [Note: Net Impact members get a discount!]

“Increasingly I felt that people who wanted to have a meaningful career didn’t understand what the field involves. There are certain sets of skills that need to be acquired,” he added.

The CSR field is growing. And companies are starting to respond to what was primarily a movement driven by activists, students and academia, by creating CSR departments and integrating corporate citizenship into business strategy.

Each of these points of integration, implementation and planning however, requires specific skill sets. And as more job opportunities emerge, Mohin believes it is up to the incumbents to educate and mentor an “army of professionals who can work in CSR and sustainability.”

Should Companies Create CSR Departments?

He likened the evolution of CSR to the quality movement in the 1980s when every company responded by starting a quality department. “Today, large companies realize that they must have someone in charge of CSR. It’s not a new department per se but builds upon the community, public affairs or environmental teams and adds on other parts of corporate citizenship,” he said.

Now, the question of having CSR departments has always triggered opposing reactions among professionals, executives and job seekers. Should CSR be a separate department? Or an integrated element of everyone’s job description? Or a C-suite led initiative?

For Mohin there is no debate, contrary to what several of his peers in corporate America have told me.

“I do think we need a department: it should be senior, small and strategic. Fundamentally, what that department is doing is setting direction, vision and key performance indicators [KPIs]. But the real work is being done by traditional line management functions.”

“For example, most companies need to have a CR council and together we work through top-level  goals to meet our vision, execution and measurement. When you look at CSR, it’s too broad for any one manager to manage. By nature, it’s a cross cutting service group that works with others to get the job done,” he emphasized.Tim_Mohin_Book

“But if there is no one in charge, it gets lost and nothing gets done.”

Preparing for a Career in CSR

But many of the skills, programs and business processes are transferable outside the CSR function, as I discover every time I interviewed a CSR executive and analyze their career’s trajectory. Mohin concurs. “Remember that most CSR functions simply report the news,” he told me, adding, “The news, though, is created in line management and mainstream corporate roles like procurement, HR, legal, and supply chain.”

Mohin’s advice hits home. For years, I have advised students and professionals that to forge a career in CSR, they must first develop a sector expertise, a specific skill set and then decide which element of CSR they can fit into. Using “I want to work in CSR” is never a good starting point.

For the author, it comes down to “Skills, Processes and Programs.”

“In chapter one, I identify how CSR has evolved at companies and how organizational structure affects the practice. Use this to figure out where you fit. Then turn to chapter two, where I list out the skills necessary for a successful career in CSR,” he said.

Once you’ve identified where you fit, chapter three and four offer a crash course in CSR strategy and how to respond to emerging issues. The rest of the book focuses on the many different programs under the umbrella of CSR. “So pick the one that applies to your skills and passion and then understand how to excel in that particular field,” he explained.

Apple, Gap & Nike: Supply Chain Crucial Area for CSR Jobseekers

For example, supply chain is an area that Mohin has devoted part of his career to while at Apple. But his emphasis – two long chapters – on the area of supply chain has more to it than passion or experience. “For me, this area is the No. 1 growth area in corporate responsibility. When you see the trend starting back a few years ago with Nike and Gap’s supply chain woes, and now Apple in the electronics industry, the critical importance of supplier responsibility becomes clear,” he said.

“Now it’s becoming embedded in companies more so than ever before because of outsourcing. Companies have found outsourcing to be cheaper and strategically more efficient for them. But accompanying that, we need a supplier responsibility program, therefore the growing demand for professionals who can understand all the nuances of both supply chain and social responsibility,” he said.

Another important reason that there are jobs in this area: Supplier responsibility is a big, complicated task. “One that requires quite a large team of skilled professionals. At Apple, it started with just me and I quickly hired a small ream but if you compare to Gap, I believe they have about 70 people in labor standards. Disney has even more,” he said, adding, “Now, imagine the scope and scale of managing all social responsibility for suppliers of all the Fortune 500 companies.”

Running a Data-Driven Program: Leading Through Influence

In order to drive a CSR program, however, whether it is supplier responsibility or environmental impact, every project requires a robust method set in place for the collection and analysis of relevant  data that can feed strategy and project the achievability of goals.

And that’s where Mohin places his bets for success.

A common thread at every company he has worked for, including Intel, Advanced Micro Devices and Apple, is managing data-driven programs. The ability to set quantifiable goals and measure progress has been a crucial aspect of his career in corporate responsibility. “[Data] has been a hallmark of my career,” he said.

So much so that Mohin has devoted an entire chapter on the need for establishing meaningful goals and knowing what to measure. In the book – chapter four – he uses the examples of Intel, Coca-Cola and Starbucks to exemplify his emphasis. In our conversation, he referred to lessons from his tenure at Intel.

“When I was the environmental manager at Intel, the first thing I did was establish Key Performance Indicators (KPIs) so that we could start measuring our global environmental performance and forecasting the future. As soon as we figured it out, senior management wanted to know. And because we were focused on the data, we were quickly able to identify the process changes and reductions that decreased our emissions even while production was increasing,” he recalled.

His advice?

“[You] need to be able to understand what’s important for your business and your stakeholders and how you can quantify progress in these areas to be successful. These metrics together become a dashboard seen by senior management regularly so they track the success measures and identify areas to improve. Running your program this way ensures that you will get the engagement and buy-in needed for a successful corporate responsibility strategy,” he said.

“Once you start to measure what’s important to your business and your stakeholders, you start to see alignment.”

Finally, I asked him to list the top skills he believes anyone aspiring to excel in CSR and sustainability must have. [Buy the Book]

In Mohin’s words, you must be:

1. A Lifelong Learner

“In corporate responsibility, you have to be flexible and curious. You’re often working in areas that are not your strong suit but if you’re open to new experiences and unafraid to be the dumbest kid in the class, this field is for you. Not everyone has that kind of personality. You have to be comfortable in your skin. And, it helps to have a thick skin.”

2. Able to Lead & Influence Without Being the Decision Maker

“You must be able to lead and influence when you’re not making all the decisions leading up to the end goal. You must be able to understand the system well – such as identifying and building relationships with those who have the budget and the authority to get things done – and be able to work with them and influence across a broad spectrum of people and groups to work toward a common goal.”

3. Able to Communicate Well

“It is one thing to know your business and another to describe it to someone else who may not know your business as well. It’s like talking to your mother about CSR. To be able to do this job, you have to be a good communicator. It’s a critical skill in many fields but absolutely essential in CSR. CSR leaders are like the ‘de-coder ring’ in many companies because they have to understand the inner workings of many business groups and explain it to others.”

4. Social Media Savvy

“The world of communications has changed in fundamental ways and the future will be very different too. We need to stay on top of were communication is headed – and right now, that’s social media.”

“What I learned from social media is that I get more out of it than I put in. I learn something new every day through social media. Communication is happening in real-time with real content and being social media savvy is an essential element to be effective in many fields.”

5. Able to Understand the Importance of Stakeholder Relations

“Remember that the field of CSR is new, it’s evolving. But also remember that social media and hyper transparency are becoming the new normal, which makes stakeholder engagement not just a priority, but essential.”

“The world is watching and CSR is about our behavior as a company. If you’re not asking people ‘how you are doing?’ and ‘how you can get better?’ then you’re flying blind.”

Originally written for and published on CSRwire’s Commentary section Talkback on August 16, 2012.

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The Story of a Successful Social Entrepreneur: What Is It That You Are Meant To Do?

04 Tuesday Oct 2011

Posted by Aman Singh in CSR

≈ 1 Comment

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alternative energy, aman singh, aman singh das, Ashoka Changemakers, brand management, Business, Consumerism, corporate social responsibility, CSR, eBay Foundation, Free Play Energy, INSEAD, Leadership, leadership, microentrepreneur, microfinance, Netflix, Nuru Light, Sameer Hajee, shared value, social enterprise, Social Enterprise, social entrepreneurship, Social Entrepreneurship, social impact, social responsibility, Social Responsibility, Sustainability, sustainability, sustainable business, sustainable business practices, UNDP, Zip Car


How is a social enterprise born? Is it born out of a recognition that some thing needs to change or is it much more complex than that?

For Sameer Hajee, the decision to give up a lucrative career as a micro-process engineer in Silicon Valley was a simple one. “After working for four years, I needed a change in geography,” he tells me over a recent Skype call. A few months later, he was working for a telecom operator in Afghanistan.

From Silicon Valley to Afghanistan

Six months in the war-torn country offered Hajee a unique perspective on the impact of energy in one of the most impoverished regions of the world. “Afghanistan opened my eyes to how impactful appropriate energy use can be. I decided right then that this is what I would focus on after business school,” he recalls.

Nuru Light: A Winning Solution

Sameer Hajee, Founder and CEO, Nuru LightHajee is the founder and CEO of Nuru Light, one of five winners of this year’s Powering Economic Opportunity: Create a World That Works competition co-hosted by the eBay Foundation and Ashoka Changemakers. Nuru Light is a social enterprise based in East Africa, built on the simple premise of hyper-local economic communities.

But Hajee’s story isn’t as intuitive or linear as it might seem in hindsight. After completing his MBA at INSEAD, Hajee went to work in Kenya as a member of the United Nations Develop Programme (UNDP). Then, in 2005, the social enterprise trend was growing and market-based solutions were becoming the latest tactic for the socially conscious.

In Kenya, my role was of a convener.  A small group based out of the United Nations was trying to work with multinational companies to create pro-poor for-profit businesses and it was my job to see where the opportunities were and to connect the folks.

This not only meant a lot of nuts and bolts groundwork in one of the world’s poorest nations but also skillfully lobbying for regulations, increasing capacity, ensuring quality of local products and much more. “These private public partnerships exposed me to a lot of different business models and industries. I was able to see firsthand what was working and what wasn’t.”

Africa: A Broken Value Chain

Next stop: Free Play Energy. “I was starting to get frustrated with the bureaucracy within the UN. When Free Play approached me to help them market crank radios and other products to the camping market in rural Africa, I decided to jump ship,” he says. Hajee worked for Free Play Energy for two memorable years.

The experience was incredible.

We found out, for example, that these off grid products would be very valuable to the poor but the delivery model was completely ineffective. It was taking $20 to produce something and by the time you got to the consumer, the price had jumped to $50. The value chain is so convoluted in Africa that the end customer is always given a very expensive product.

His team’s solution: A donor model with help from the UNDP. “Free Play became a viable business but we didn’t have control of our products now,” he says.

And he was itching for something new. Again. So in 2008, along with two colleagues, Hajee left Free Play to start Nuru Light.

The Big Idea: Using Energy to Solve Social Problems

“Human power as a hand crank wasn’t going to work for very long. We knew that then, it gets old very quickly.  But the immense power of human energy has been untapped and compared to solar or other alternatives is much more appropriate,” he says.

With initial funding from the World Bank, Hajee spent two months living in Rwanda to understand specifically what “they need energy for what they were currently using.”  “Remember that these are the poorest of the poor populations. Their needs are basic. My research identified four specific needs: Cooking, lighting, mobile phone charging and radio,” he says.

Essentially, what Hajee realized then was that most of us use energy for specific tasks, especially those that don’t have a continual power source. We learn to adapt and make the most of our resources.

“The fact is that the power required to power these things wasn’t a lot. It all came down to tasks: the entire room did not need to be lit up. They just needed enough task light, as long as it was multi-use and multifunctional,” he emphasizes.

What also emerged was a need to pool resources and share. “Some of them said they would like to have room lighting for visitors. So why not have multi-use lights that can be connected for such occasions?”

The Economy of A Sachet

The hyper-local model Hajee discovered has been successful for a long time in India. With a significant percentage of the Indian population still living well below the poverty line, these sachets have gone a long way in helping those with limited disposable income afford basic necessities.

For the African poor, Nuru Light, a basic, rechargeable light, has similar potential and meaning.

But how do you take it to market?

First, you need seed investment. For Nuru Light, this meant a complete initial dependence on grant money to get through the first two-and-a-half years of research and testing. “We were completely funded by grants. It took every penny of the $500,000 we raised to make this work in Africa.”

Africa’s “Green Jobs”

“One of the ways to eradicate poverty is to offer economic opportunity. So we thought, why not put this into the hands of micro entrepreneurs who could set up recharging stations for these single, handheld lights?”

So, a lot like the successful domestic business models like Netflix and Zip Car, the Nuru Light micro entrepreneurship model was born. What made the idea instantly sellable were two factors: Setting up the business required minimal funds and the profits would be significantly steep than what the community was making.

The following months began to show concrete results with most of the micro entrepreneurs paying off their initial setup loans within six months. “They were making $1.50 for 20 minutes of charging. That’s what they made earlier by working the whole day,” he explains.

As for customers, the value proposition presented by Nuru Light was equally attractive. According to Hajee, a recharge costs 30 cents, which typically provides for with about 10 days of lighting.

A whole month’s supply? No more than one dollar for most.

Dissecting a Social Enterprise’s Business Model

While the product was an instant success with customers who really felt that their needs had been understood and the solution affordable, things were not as smooth running internally.

Our revenue model really evolved through those initial months. From low margin and a high volume approach we went to carbon credits. In fact, we are the third registered carbon credit company in Africa.

They also needed to figure out how to ensure that Nuru Light was sustainable for and with their team of micro entrepreneurs. “The fee from the recharging stations was a significant third stream of revenue that we had anticipated early on. But turned out, we were spending much more on fielders doing the rounds to collect the money than was worth it,” he says.

Nuru Light is a social enterprise that sought to invent an affordable and clean off-grid lighting system for the world’s poor.

Nuru Light

Next challenge: Automating the process.  The answer, Hajee realized lay in mobile money. A lot like the rechargeable pay-as-you-go mobile phone system, the micro entrepreneurs were set up with prepaid energy credits that could be refilled, by purchasing 20-digit pin numbers. Now, the flow was corrected, in place, much more easily manageable and yet simple.

Scaling a Social Enterprise

The social inequities and empowerment that Nuru Light has been able to demonstrably address aren’t lost on Hajee.

In fact, what caught my eye on the Nuru Light website is the “Impact” section. I asked Hajee to discuss how he believes Nuru Light is helping the African community besides fixing a basic need for light.

Our product helps reduce the use of kerosene, a significant cause for respiratory diseases. We’re helping the local environment by removing the fumes and toxicity of kerosene from the air. We are creating job opportunities for the community. Plus, for the first time the kids in the community now have the ability to complete schoolwork at their leisure, freeing up for time for play and extracurricular!

As a technology, Nuru Light, of course, presents a win for Hajee who recognized a severe need coupled with crippling factors of few resources and economic underdevelopment.

Next Stop: India

Now with new support – financially and otherwise – from the eBay Foundation, Hajee is ready to work on his next venture: The rural population in India.

In fact, Nuru Light has had ground troops in Mumbai and Delhi doing initial research since 200, he told me.

“It took all of the $500,000 we raised for Nuru Light to work in Africa. We now have the same amount to invest in our model in India. And eBay has shown a real commitment to help us scale our business by offering us their resources way beyond the financial support. Their approach has been starkly different from other donors and we’re lucky to have that,” he says.

If Africa took a few months, why was the Indian market proving such a hard nut to crack? “The reason it is taking us so much longer is that no one is working on provided microfinance opportunities in India. So off grid products like ours end up remaining largely, off grid,” he admits.

But the roadblocks in India are more convoluted and will require a whole new round of rethinking and perhaps, even a regurgitating of Nuru Light.

We have learned a lot in the last two years and now know what can work.

The research is complete and the funding is in. That success story is yet to be written for Hajee and Nuru Light, but his recent accomplishments leave me with little doubt.

Passion, a clear sense of business responsibility and market-based solutions drive Sameer Hajee. What will it take to motivate you?

Connect with me @AmanSinghCSR or leave a comment.

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