When car maker Henry Ford said these famous words "A business that makes nothing but money is a poor business" many years ago, he meant companies have a larger role in society beyond making profit. Fast forward to the 21st century and we are living in times where businesses that make nothing but money are out of business.
Last month, 85 businesses and civil society leaders came together at the Asia Inclusive Business and Responsible Forum in Bangkok to share practical steps and benefits for integrating sustainability into business models and their role in society.
We discussed that being an inclusive and responsible business is no longer a nice to have. It is a must. Customers increasingly demand it, companies increasingly see the case for it, and incoming government laws will soon -- if not already -- require it. And we all desperately depend on it. As much as the private sector has catalysed economic growth in Asia and other parts of the world, the liberal economic model, with limited government regulation has contributed to increased inequality, climate change and environmental destruction in the region.
Based on information from Association of Southeast Asian Nations (Asean), micro, small and medium enterprises (MSMEs) in the Southeast Asian region represent over 90% of income generation and 51-97% of employment. They are the engines of the economy.
The good news is -- and cue event takeaway number one -- that companies can be a powerful force for good. We particularly took inspiration from the smaller, frontrunner organisations -- especially female-led ones -- who shared details about their inclusive and responsible business journey.
Cambodian MUCH Mobile Healthcare founder and CEO Phirum Dyphan began a mobile healthcare business to reduce the invisible labour workload on women. Like in many countries, in Cambodia, women tend to shoulder the heavy care workload for the elderly. The company offers doorstep professional healthcare services for patients and the elderly. The business actively employs and trains young women from rural areas, who may not otherwise be exposed to a healthcare career path. Social justice in practice -- tick.
Cambodian roaster Three Corner Coffee made decent working conditions (income) and heavy professional development opportunities for farmers a cornerstone of their business model. That was well before Cambodia, Thailand and Vietnam began tightening up their labour laws. By being a responsible small business Three Corner Coffee now have the edge on their competitors when new and amended Cambodian labour laws come into play. Three Corner Coffee is a good example of how enterprises who prioritise the wellbeing of their employees have a competitive advantage in the market.
From further afield, Nigerian based JAEBEE Furniture founder Igbodike Joy Bamidele showcased that profit, people and planet can be synonymous in a business model. Joy started her successful furniture-making business to teach disadvantaged women and girls a new trade in an otherwise male-dominated sector. She invests in training and mentoring her employees, which has helped her retain staff and reduce the costs of hiring new resources. The company uses discarded textile materials to create unique chairs -- a circular economy principle, learned through Oxfam's partner Enterprise Development Centre, which is cost-effective.
What about big business? It's important to hear how they're doing because in the public debate much emphasis tends to go to larger companies with more resources to do good.
We saw small but important steps by big companies towards being more inclusive and responsible. Food companies producing and sourcing from the Asean region recognised the need to protect workers' rights, sustainable sourcing practices and fair prices for farmers. A Thai-based seafood processor and exporter spoke about implementing safe and legal labour policies for their employees. A big multinational company spoke about their work stepping up protocols with their suppliers to ensure sustainable sourcing practice. It was good to see the emphasis on protecting migrant workers' rights given migrants are some of the most vulnerable, exploited, and invisible people in supply chains. Let us also celebrate change, and the fact that big companies actively participated in this event is a promising sign.
Examples discussed by big business would be mostly categorised as "do no harm" under international standards such as the Organisation for Economic Co-operation and Development (OECD)'s Due Diligence Guidance for Responsible Business Conduct. Such guidelines recommend that enterprises conduct due diligence to identify, prevent or mitigate and account for how actual and potential adverse impacts are addressed.
Further along the spectrum toward "doing good", AMRU Rice showcased their model which promotes fairer commercial benefits to farmers through direct share ownership, fair price, and premiums for their crops through Contract Supply Agreements. The company was amongst the few to showcase a business model that redistributes power to producers, which is encouraging but is it enough?
We live in a world where 1.4 billion people live in poverty and 500 million in extreme poverty. The richest 1% bagged nearly twice as much wealth as the rest of the world put together over the past two years. We need more companies to "do good" consistently across their business models to achieve the UN Sustainable Development Goals. Oxfam believes business can be a powerful force for good and a crucial part of the answer. It is difficult to overcome challenges of poverty and inequality without harnessing the power and potential of business.
Companies must redistribute their power and put people and the environment first. An immediate first step is for civil society and companies to come together with the common goal to do good, show what's possible and raise the bar. Another important step to catalyse systemic change is to jointly push governments to step in and regulate, to ensure a level playing field is created, to ensure business leaders are followed by their peers, and to ensure competition does not discourage good practice.
There was wonderful energy at the forum precisely due to the power of civil society and private sector joining forces to support companies on their journey toward decent wages, empowering women, being inclusive, and adapting to create clean production and supply chains with minimum impact on climate. We don't think Henry Ford would mind us giving his famous quote yet another makeover because the forum showed us that 'A business that puts people and planet before profit is the most successful business'.
Fiona Jarden is Senior Adviser for Oxfam. Jacques-Chai Chomthongdi leads Oxfam's Asia Private Sector Engagement.
