“Carbon for Water”, or how to create a smart business among the poor

Summary

Last year, the “Carbon for Water” project, led by European company Vestergaard Frandsen in Kenya, was the subject of a documentary and recently won two social business awards. An opportunity to highlight the innovation made by this one-year-old project.

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“In April 2011, a company donated nearly 900,000 high-tech water filters to communities in Western Province [Kenya]. But it was not charity. It was safe business.” This is how the trailer of Carbon for Water, a documentary film by Evan Abramson and Carmen Eva Lopez, presents the eponymous project that one company, Vestergaard Frandsen, has been leading in Kenya for just over a year. A social project that also worked as leverage enabling the company to achieve sustainable business in the area. But how?

 

Humanitarian Entrepreneurship

 

The whole project started at the convergence of two different interests. On one side, there was Vestergaard Frandsen, an international company based in Switzerland that produces disease control textiles, including LifeStraw portable water filters– a company committed to the United Nations Millennium Development Goals, “guided by a unique Humanitarian Entrepreneurship business model, whose ‘profit for a purpose’ approach has turned humanitarian responsibility into its core business”, says its website. On the other side were the communities of Kenya’s Western Province, around the Kakamega forest. In this region, 90% of the people do not have access to safe tap water for drinking. They therefore boil the water that they find in streams and rivers, untreated, before consuming it. This does not prevent them from getting sick with diarrhoea or typhoid, is costly because of the price of the firewood, and produces vast amounts of carbon dioxide and other greenhouse gases. In April 2011, Vestergaard Frandsen decided to distribute almost a million LifeStraw filters to these communities, reaching four million people. The filters contribute to better health among the population, drastically reducing carbon emissions due to traditional purification, and slowing deforestation, since less firewood is needed. These environmental benefits are then transformed into carbon credits, which the company sells to industries and governments looking to reduce their carbon footprint. It generates revenue that is then re-injected in the system, to keep it up and running. A “Pay for Performance” business model (explained in this infographic) that Mikkel Vestergaard Frandsen, CEO of the company that bears his name, describes in these terms: “Everything is interlinked. The beauty of that integration is that the climate part actually pays for the health part.”

 

An idea for the future

 

“Pays”: more than any other, this word is at the core of the “Carbon for Water” project, and of all Vestergaard Frandsen’s projects and products. As the trailer says, it is not about charity. It is about developing a solution to a health issue in a way that is sustainable, environmentally, socially and financially. In other words, it is about putting together a social business. A goal that resulted in Verstergaard Frandsen being awarded the Best Social Investment Strategy Award, by the Social Innovation Awards 2012. A prize that “recognizes the company or organization with the best social investment strategy, a concept that refers to the ways companies invest their financial assets in order to advance causes or programs that have both social and financial returns.” On May 15th, The Global Business Coalition also awarded it the “Health & Beyond: Eradicating Root Causes of Poor Health” prize, awarded by a jury of senior representatives from partner groups like PATH, UNAIDS, WHO, Harvard University and the New York Academy of Sciences.

And the Carbon for Water movie won no less than 11 awards at various festivals in Albany, South Africa or the United States, including “Best Short Film” and “Best Environmental Sustainability Film” at the Reel Earth Environmental Film Festival 2012 in New Zealand just two weeks ago.

A wide impact that ably demonstrates how vital initiatives of this kind are in facing vast health, environmental and nutrition problems, as they represent the only way to avoid relying on charity and to build long-term solutions. The “Carbon for Water” model is one of many for social businesses. Together, they seem to lay out the future for capitalism as a whole, in developing countries as well as in developed countries. As Mikkel Vestergaard Frandsen puts it, “companies that don’t figure out and don’t understand that they have this role [in maintaining environmental sustainability] probably won’t be around in ten or twenty years from now.” What if business and social business were one day plain synonymous?

Here is the trailer of this inspiring movie, enjoy!

(Photo from: http://www.carbonforwaterfilm.com/)