Inclusive Business in Vietnam – a new venture for a B2B enterprise

Covestro is a company committed to finding ways of contributing towards reaching the United Nations Sustainable Development Goals (SDGs). "We develop and foster collaborations with external partners to help us achieve our company purpose and business objectives, and align these with societal expectations."

Actualité RSE  |   | Bui Tran Nhu Phuong, Inclusive Business Development Manager, Covestro Vietnam

Be Courageous!

At the early stage of developing network and partnership for Inclusive Business in Vietnam, it was sometimes discouraging when emails, calls or messages that I sent out to stakeholders remained unanswered. I remember starting a Skype call with a prospective NGO partner by saying thanks to their quick response to my emails and messages. On the other side, I heard laughter as they shared with me the same sentiment of having encountered similar difficulties in sparking people’s interests in establishing partnership with them: “Apparently, it is hard to do good.” – The conclusion hit me hard as I reflected on our discussion later that day. I had never thought about it that way, but it was painfully true.

As a global enterprise, Covestro develops sustainable solutions to the greatest challenges of our age: climate change, resource depletion, urban expansion, population growth and the resulting increase in awareness of environmental issues. These will inevitably lead to a higher demand for renewable energies, alternative resources, energy-efficient transportation, and sustainable, affordable housing.

We are committed to finding ways of contributing towards reaching the United Nations Sustainable Development Goals (SDGs). We develop and foster collaborations with external partners to help us achieve our company purpose and business objectives, and align these with societal expectations. The fact that remains little known about Covestro is that it is among the founding members of United Nations Global Compact, the world’s largest corporate sustainability initiative.

As a B2B with the core business of supplying premium polymers, it has been a bold move for Covestro to step into the realm of Inclusive Business (IB) aiming to tackle some of the most problematic issues in Southeast Asia: post-harvest loss and sustainable and affordable housing. But while others ask “why”, our response has to be “why not”. Embracing our corporate motto to be Curious, Courageous and Colorful, Covestro IB Southeast Asia embarked on the quest to explore ways in which we could enhance the access of the low-income population to technology solutions in agriculture.

What is Inclusive Business?

Most literature addressing IB often starts with the definition of what the Base of the Economic Pyramid (BOP) is, simply because it is an astonishing fact about the wealth distribution in the world. According to World Bank’s data in 2014, the BOP encompasses 3 billion people living on less than $3 a day and 1.5 billion people on up to US$9 a day; including men and women of all ages, backgrounds, and preferences.[1] The BOP belongs to the underserved market of about 2.3 trillion US dollars spent in food and beverage per year.

In one of its reports conducted under research cooperation with Harvard University, the International Finance Corporation stated: “Inclusive business is interesting for companies because it can offer new opportunities for innovation, growth, and competitiveness at the same time as positive social and development impact. It is interesting for bilateral and multilateral donors, foundations, governments, and civil society organizations because it has the potential to drive development impact in self-sustaining, self-multiplying ways that do not require continuous infusions of grant funding. And it is interesting for the poor because it brings greater access, choice, and opportunity in their lives and futures.”[2]

There are many ways in which the concept of IB could be translated into action plans. For Covestro IB in Southeast Asia, we describe it as an approach to develop innovative business models to enhance access of the BOP to one of the key development enablers: technology solutions. Keeping its for-profit nature, IB contributes to strengthen the local economic development and alleviates poverty through the inclusion of the BOP in the value chain.

Inclusive business approach of Covestro in Vietnam

In Vietnam, particularly, we are making an effort to develop an inclusive business model around a technology solution called Solar Dryer Parabola Dome – the result of 30 years of research by our partner Dr. Serm Janjai of Silpakorn University. The dryer works with the principles of greenhouse drying for agricultural products such as bananas, tomatoes, chili, coffee, cocoa, spices and herbs, etc.

Their parabolic shape allows the best use of solar radiation, and water runs off easily. The polycarbonate sheets are made of high-value Covestro polycarbonate, and are coated with a UV protection layer. The solution is easy to transport, and is installed locally. It reduces significantly the risk of spoilage and hygiene concerns caused by dust, water contamination, and livestock animals.

With this solution, we hope to help tackle the post-harvest loss and enhance the resilience against climate change among farming communities in Vietnam. According to the Climate Change Scenarios for Vietnam 2016 – Report by Vietnam Ministry of Natural Resources and Environment, the rainfall indicator differs strongly between the climate change scenario in 2012 and in 2015. Rainfall, as forecast in 2012, would actually decrease by 2-12% but is now predicted to increase by 5-15% (from the period of 2016-2035). High rainfall increases in rainy season while in dry season, rainfall tends to decrease. Hence, drought and floods would become more complicated. Consequently, conventional drying in open air will face more challenges. Unpredicted weather encourages moving post-harvesting activities to closed space.

Cooperation for success

After a piloting project that put three solar dryer domes in the South of Vietnam, we have seen the incredible potential for scaling the solution in other areas of Vietnam. However, in order to achieve a sustainable business model, cooperation with partners along the value chain is crucial, which is why we continuously reach out for relevant stakeholders and always welcome proposals for collaboration.

There are absolutely no scenarios in which Covestro IB could conduct our operation alone no matter how strong of a company Covestro is. Embracing SDG #17, we constantly seek for collaboration with like-minded customers and governmental and non-governmental organizations, as well as social enterprises to reach mutual goals.

Yes, it is hard, undeniably so. But it does not mean that we should stop doing what is good. It only means that we must be courageous enough to persist and keep our eyes on the ultimate goals of improving the BOP’s livelihood. There are many paths to that goal; and ours is Inclusive Business. 

 


[1] World Bank Group, Global Consumption Database, 2014 datatopics.worldbank.org/consumption/

[2] IFC & Harvard Kennedy School (2010). “Scaling Up Inclusive Business: Advancing the Knowledge and Action Agenda.” www.ifc.org/wps/wcm/connect/dbebe6004cc75ca394aab59ec86113d5/Pub_004_BOP_Scaling_Up_Inclusive_Business.pdf?MOD=AJPERES

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