Inclusive business solutions
In addition to strategic social investment project , Holcim contributes to improving the quality of life of our stakeholders through “inclusive business” solutions. This approach differs from strategic social investment in that inclusive business models are initiatives based on core business and expertise that include base of the pyramid populations as producers or consumers in initiatives that address social needs while providing tangible business benefits.
The premise behind inclusive business (also referred to as Creating Shared Value) is that the competitiveness of a company and the well-being of its community are interdependent. Companies should therefore develop market-based solutions using core assets and competencies to capitalize on pressing social issues, driving both profit and social benefits.
Inclusive business initiatives are not meant to replace traditional CSR, as not all social needs can be addressed through market-based solutions. To succeed, inclusive business initiatives must be profitable, have a clear business strategy, address social needs and provide measurable business benefits. They should also be an important driver of product and service development, embedded in the company as a whole.
Holcim is currently working on four pilot projects targeting base of the pyramid (low-income) populations, mainly in Asia and Latin America. In order to meet the target of 50 inclusive business projects in place by 2020, we will analyze the strengths and weaknesses of current initiatives in order to improve and replicate in other regions wherever possible, as well as explore new opportunities. We expect these opportunities will be found in the areas of products and services (shelter, sanitation, livelihoods, water, supplychain biomass, waste management) and distribution channels (distribution networks, employability, masons training).
Between strategic social investment and inclusive business projects, the goal is to have a positive social impact on 100 million low-income people and local Holcim community members by 2030. Impact will be assessed through the CSR Questionnaire, as well as through inclusive business committees involving internal and external inclusive business experts and implementers.
Low income housing
For many years now Holcim has been developing housing solutions for low-income, or base of the pyramid, people who cannot afford adequate housing. Initiatives include the “Mi Casa” project in Mexico, “Construyendo Juntos” in Costa Rica and “Solusi Rumah” in Indonesia.
Although these projects currently do not provide a significant financial return, Holcim recognizes that addressing the significant need for low-income housing has the potential to trigger large-scale societal change while providing tangible business benefits.
For this reason we launched a low-income housing pilot project in Argentina called “Shelter for Livelihood” (S4L), which aims to provide innovative and sustainable solutions to the lowest income segments of population by integrating technical, financial, capacity building and Low-income housing community development components. Through S4L, families who could not normally afford decent housing are provided with micro-credit solutions, specially designed construction materials and community support. By facilitating this process, Holcim contributes to reducing the housing deficit in Argentina while opening a new business market.
As part of meeting our inclusive business target, Holcim is exploring ways in which the S4L methodology can be replicated to other Group companies in countries where appropriate, making it adaptable to regional differences and acceptable to local partners. This model is expected to provide new business opportunities for selling building materials to low-income customers, while enhancing their livelihood.