Danone invested $1 million in the Bogra plant – a tiny amount for a company with revenue of €14.5 billion in its latest full year. For that investment it has seen significant returns that are hard to measure financially. Danone says it has learnt how to cut energy and save money in its supply chain and how to sell the idea of nutrition to the poor in emerging markets. And then there is the reputation rub-off of being associated with Yunus, founder of the Grameen Bank and now something of a celebrity for his pioneering work on microfinance.
Investing in social entrepreneurs can boost a company's reputation for being responsible in a way that limits the risks of investing in new products, especially when these could take years to become commercially viable.
Drug maker GlaxoSmithKline's progress on finding a malaria vaccine, which is in the final stage of clinical trials, is one of the company's favourite responses to critics of the pharmaceutical industry. But work on the vaccine may not have happened without the financial support of Path, a Seattle-based not-for-profit organisation that forms alliances with private sector partners to research and develop treatments for neglected diseases, which has been funded by the Bill and Melinda Gates Foundation.
Alternatively, big companies can buy up innovative firms that have already done the groundwork on products with social benefits and commercial potential. Dow Chemical, for example, in 2006 added three water purification technologies to its Dow Water Solutions portfolio when it acquired Chinese firm Zhejiang Omex Environmental Engineering. Dow backs up this work with its more media-friendly sponsorship of Blue Planet Run, a US non-profit group that raises money for clean drinking water projects in developing countries.
Chris Evers / chris@chrisevers.dk
