APPROACH AND METHODOLOGY
Success requires a non-traditional approach outside the reach of individual organizations, and beyond the old model of silos and solo players. In the face of new and unfamiliar markets, unstable government budgets, and increasingly complex societal challenges, success at all levels demands leadership, open innovation, collective action, pooled resources, and technology. For these reasons, Mercy Corps, the Global Partnership Initiative in the Office of the U.S. Secretary of State, Granum Investimentos, Arent Fox and the Inter-American Development Bank (IDB) will launch this organization, partnering innovative businesses, governments, and civil society to unlock a new era of integrated financial, social, and environmental value.
In Brazil, initial challenges to be addressed include:
- Reducing the Environmental Impact of Increased Consumption: Currently, it is estimated that less than 1% of Brazilian households recycle. To address this issue, the Brazilian Federal Government recently passed a law requiring companies to divert recyclable materials away from landfills. There is currently no clear solution to respond to this law. This represents a $1.5 billion market opportunity and will improve the environment.
- Fostering Responsible Consumers: The cumulative annual income of the over 35 million new consumers at the base of the pyramid in Brazil is more than $60 billion. Courted by financial institutions and retailers, this newfound spending power represents both an opportunity and a liability. In addition, many of these new consumers seek access to affordable and appropriate financial services. To ensure that communities at the base of the pyramid become responsible consumers and are empowered financially, new tools are required to gauge credit risk and consumption habits; and dynamic curricula are needed to facilitate prudent spending.
In each of these problem streams, the organization will identify targeted business challenges, design innovative solutions in collaboration with a network of university partners, turn solutions into action by developing win-win collaborations and business ventures, and showcase leadership and impact on a global stage (Secretary of State's Forum on Investing with Impact, Rio+20, and the World Economic Forum).
The organization will collaborate with innovative corporations, governments and civil society to:
- Identify targeted business challenges that impact the bottom line and yield positive social and environmental returns;
- Source innovative ideas and design breakthrough solutions through cross-sectoral collaboration;
- Turn solutions into action by catalyzing win-win partnerships between civil society and business strategic alliances with corporations, and new business ventures; and
- Showcase leadership and impact on a global stage.
IMPLEMENTATION, TIMELINE, AND DELIVERABLES
From September 2011 to March 2012, the partners will:
- Launch the organization and hire staff in Brazil and the US.
- Further detail the collaboration and innovation methodology with university partners and think tanks to design the best solutions to identified business challenges using the latest innovation technology and in-person technology.
- Research identified problem streams (currently consumer financial education and recycling).
- Set up and launch a consortium on the consumer financial education stream (already in initial conversations with large commercial banks, credit bureaus, the Brazilian stock exchange, and a mobile network operator) with the goal of developing actionable solutions for the problem.
- Set up and launch a consortium on the recycling stream (already in initial conversations with a large beverage distributor, a large bottling company, consumer packaged goods companies, and national retail chains) with the goal of developing actionable solutions for the problem.
Within the first year, the organization will:
- Launch a new venture or alliance to implement the solutions identified in the consumer financial education stream.
- Launch a new venture or alliance to implement the solutions identified in the recycling stream.
- Identify two new problem streams and set the stage for repeating the process above.
- Identify new partners.
In four decades, the world's population is estimated to be over 9 billion. The bulk of this growth will come from emerging markets. As resources are increasingly taxed and new markets emerge, it is becoming more and more evident that business as usual is not sustainable. After a series of consultations by the partners with over 100 companies, investors, government representatives, academics, and other civil society representatives in Brazil and the US, it is clear that there is tremendous need for, and interest in, this initiative.
In Brazil, trends that particularly affect emerging markets are becoming increasingly pronounced: the concurrent growth of the economy, social, and demographic shifts, and growing emphasis on protection of limited natural resources. Brazil's economy grew by 7.5% in 2010, and it is on track to become the world's fifth largest economy within the next few years. In the last eight years alone, more than 30 million people have been catapulted out of poverty. These individuals are now emerging as new consumers, co-producers, and clients. Brazil is home to some of the world's most precious ecological assets--the Amazon and 14% of the world's renewable fresh water. Moreover, there is a unique opportunity to showcase the leadership of partners as Brazil comes under the world's spotlight with Rio+20, the World Cup, and the Olympics. Thus, Brazil was selected as the best pilot country for this initiative.
Current partners include the following public, private, and government institutions:
- Mercy Corps: bringing a history of engaging with the government, civil society, and private sectors to enable pro-poor solutions.
- U.S. State Department: providing convening power, visibility, and mobilization of support.
- Granum Investimentos (on-the-ground Brazilian partner): A Brazilian investment advisory firm focused on long-term, 'green' investments, which brings expertise in working with investors on long-term, environmentally sustainable initiatives.
- Inter-American Development Bank: contributing regional and sector expertise with a 50+ year track record of financing social and environmental development in collaboration with the public and private sectors.
- Arent Fox: A world-class law firm providing pro-bono legal services.
Participants welcome additional partners that can lend their expertise to this initiative.
SEEKING: Financial Resources, Implementing Partners, Best Practice Information, Media/Marketing Opportunities
Support for the initiative, supporters of problem streams, and participants in ideation streams.
OFFERING: Best Practice Information, Media/Marketing Opportunities, Other
Showcase activities and provide insights into best practices.