When companies decide to get involved in fighting poverty, they often set up sponsorships, either financial or skills-based, in support of a cause. Frédéric Dalsace believes that in fact their first step should be to examine and thoroughly overhaul their own practices to make sure that their poverty-fighting efforts truly make a difference.

Ask yourself crucial questions

Making a donation to a charitable organization is an easy choice. If your company really wants to cut off poverty at its roots, though, it shouldn’t just opt for superficial solutions. First clarify exactly what you aim to do. Do you want your company to take action directly? At the level of your shareholders? In relation to your customers? Each goal will require its own procedures.

Begin internally

First ask yourself how your company might be contributing to poverty. In France, individuals are considered to be living in poverty if their earnings are 60% or less of the national average. Identify low-paid and part-time employees in your organization who fall into this group. What can you do for these people? Give them bonuses, or provide special advantages through your employee organization? Make some changes that will improve their quality of life? For example, Danone no longer requires the cleaning crews in its Paris offices to do their jobs outside regular office hours. The group invested in silent vacuum cleaners so that the crews can work during the day.

Take a really close look at your supply chain

Think of your company as a complete ecosystem. Do you contribute, directly or indirectly, to impoverishing your suppliers? The complexity of supply chains makes it difficult to identify everyone involved, especially those farthest away. To ensure that you are sourcing your raw materials and products truly ethically, your purchasing processes should be completely transparent.  The brands Veja, Everlast and American Apparel have worked hard on these issues and can now guarantee that their products are “ethically made, sweatshop free”.

Track penalties of poverty

Concerning your customers, make sure that you are not creating “penalties of poverty”, which means (even if you don’t intend it) making poor people pay more for your products or services. Examples: the cheapest telephone plans are available online, making them inaccessible to the most disadvantaged populations. A new car is beyond the reach of a person living in poverty, but maintaining an older vehicle will cost the person more over time. Go over all your activities with a fine-tooth comb to see whether they result in such negative consequences, and if so try to correct these issues.

Go even farther

If you want to make an even greater commitment, join l’Action Tank Entreprise & Pauvreté (Action Tank Social & Business), an association created in 2010 by Martin Hirsch and Emmanuel Faber (H.86). It brings together leading companies that develop, in addition to their traditional activities, business models that provide special products and services to the poor to help them reduce their net expenditures. There are projects in all sectors: providing low-cost and free optical services, building affordable housing, ensuring access to high-quality food products, and much more.

Frédéric Dalsace (H.85)
Professor on leave of absence from HEC, he held the HEC Social Business / Enterprise and Poverty chair for 10 years and currently teaches at IMD Lausanne.

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