Over the last couple of years, FSG has supported Colombia’s National Industry Association (ANDI) in its work helping companies address social problems through their core business strategies. We have curated Empresas INspiradoras, the annual list of companies working to change Colombia through shared value, and have led workshops with a range of companies to advance their shared value journey.
Inspired by FSG’s recent work with PolicyLink on The Competitive Advantage of Racial Equity, ANDI developed similar research grounded in the Colombian context. Two reports published earlier this year highlight how companies in Colombia work for the inclusion of marginalized and vulnerable populations and advance equity through shared value strategies.
We spoke with Isabella Barrios Morales, executive director at the ANDI Foundation, to understand how companies in Colombia are leveraging shared value to address issues of equity.
In 2017, FSG published the Corporate Advantage of Racial Equity in collaboration with PolicyLink. What inspired you to work on a report with a similar premise, grounded in the Colombian context?
Colombia signed a Peace Deal with the FARC guerrilla in 2016, ending 50 years of violence. Now, actors across the country must step up to build the conditions for long-lasting peace and prosperity. That includes new ways of thinking about business that engage victims of conflict, former combatants, and ethnic minorities, including afro-Colombians and indigenous groups. Currently, 200 of ANDI’s member companies include marginalized and vulnerable groups as part of their value chain. Although this shows important progress, it demonstrates that we must continue to inspire many more organizations to solve social challenges in Colombia through the power of business.
Proving to companies that inclusion and equity creates a competitive advantage for their business is critical to encouraging others in the private sector to explore shared value opportunities. Research and reports like the ones we just published enable us to approach companies with concrete evidence of why engaging historically marginalized and vulnerable groups is not only a moral imperative but also makes business sense.
How are companies in Colombia applying an equity and inclusion lens to their shared value thinking?
In the reports, we highlight 20 examples from companies across sectors that are taking a shared value approach to intentionally engage historically marginalized and vulnerable populations. HG Ingeniería y Construcciones, an infrastructure company, has grown its business by providing bespoke solutions to the energy access needs of afro-Colombian populations in remote areas. Grupo Exito, one of Latin America’s leading retailers, has adjusted its employment policies to hire and retain victims of conflict and former guerrilla and paramilitary combatants. By supporting the unique needs of these employees (through scholarships for continued education, access to credit, and improved parental leave), it has increased employee productivity and improved the work environment for its wider employee base. Grupo Nutresa, a large food and beverages conglomerate featured in Fortune’s 2017 “Change the World” list, provides technical assistance and support for cocoa farming communities affected by conflict. The company has also modified its procurement processes and now buys over 30% of its cocoa bean supply, which it previously imported from smallholder farmers. This shift improves the quality of the company’s products and diversifies its supplier base while generating economic opportunities for local communities.
While there are some interesting examples, only a handful of companies in the country are taking this approach, and there is still a long way to go. Companies have seen the benefits that applying an equity lens to their shared value work brings to their competitiveness and productivity. This should be a call to action for other companies in Colombia.
What are the business advantages of developing strategies around equity and inclusion for companies in Colombia today?
Exclusion does not only affect vulnerable populations. It also constitutes an inefficient use of resources insofar as the economy does not incorporate the skills and capabilities of those it excludes. It also prevents these groups from participating in markets as consumers, employees, and business owners, hampering economic growth. If companies are able to leverage the assets of diverse groups, they become significantly stronger.
The projects we highlight in our recent reports generate benefits for businesses and empower historically marginalized and vulnerable populations across Colombia. This approach can help open new markets, broaden the talent pool, improve retention rates, increase productivity, decrease production costs, and ensure the quality and reliability of suppliers for Colombian companies.
What do you see as the most important shared value opportunities in terms of equity and inclusion for companies in Colombia today?
A number of social problems in Colombia represent potential opportunities for companies to develop shared value strategies focused on marginalized and vulnerable groups. Two that are top of mind for us at ANDI are rural development and employment of historically marginalized and vulnerable populations. In our recent reports, we profile a number of companies who are working to develop Colombia’s agricultural sector as a way to provide viable economic alternatives, beyond coca leaf production, for smallholder farmers. We also work with companies to employ historically marginalized groups through the Modelo de Empleo Inclusivo, in partnership with other actors including Fundacion Corona, ACDI/VOCA, and USAID.
Companies in Colombia can add value and contribute to building long-lasting peace and prosperity by identifying shared value opportunities in multiple areas, including access to finance and financial products, improved nutrition, and tailored healthcare and health insurance products. We believe that by using a shared value strategy to include and advance historically marginalized and vulnerable populations, companies are able to align their mission with their growth. Small, medium and large organizations need to recognize the advantages of this approach and incorporate it into their operations as a way to reap tangible benefits for the company while building the conditions for peace.