Oct 25, 2013
IDB facilitates investments in shared value by Latin American and Caribbean companies
Inter-American Development Bank and Nestlé co-host creating Shared Value Global Forum 2013 in Cartagena
The Inter-American Development Bank (IDB) has allocated $750,000 to support clients from its private-sector portfolio in implementing initiatives to create shared value.
A company creates shared value when it addresses economic and social problems in a community, not only making itself more competitive, but creating benefits for the surrounding community.
The IDB is the first multilateral financial institution to operationalize the concept of shared value through its new tool the shared value appraisal, and will select 10 clients to identify investment opportunities aimed at optimizing the allocation of their resources, increasing their competiveness and creating social value in communities. Each client engagement will receive an assessment designed to identify investment opportunities at the intersection of business and social challenges as well as a roadmap to prioritize and execute investments.
Work is already underway with Subsole in Chile, Caribe Hospitality in Jamaica and the Universidad de San Ignacio de Loyola in Peru.
With Subsole, an agricultural products firm, studies have aimed at enabling the company’s workforce to become more sustainable, through investments to improve working conditions of low-income, rural families during the harvest season. In the case of Caribe Hospitality, a tourism development company, the focus has been on identifying job opportunities for at-risk youth during the construction of hotels, and for including small and medium-sized companies in the supply chain. With the Universidad de San Ignacio de Loyola, alternatives are being offered to broaden the socioeconomic spectrum of matriculating students and to lower dropout rates.
The remaining seven beneficiaries are currently being evaluated, with plans for still others to receive blueprints for identifying social issues arising in connection with the products and services they offer, and expanding the reach of their value chains.
While many firms in Latin America and the Caribbean value investments that not only provide financial returns but also bring with them social and environmental benefits, they often lack the capacity, time and resources to identify shared value investments.
The IDB shared value appraisal was among the topics discussed in Cartagena, Colombia, at the Creating Shared Value Global Forum 2013. The Forum’s focus was to explore various approaches where the private sector has successfully converted business challenges into opportunities for business growth and significant social impact. The event was organized by Nestlé and the IDB.