Companies are often unaware of how much they can influence the lives of the poor. The Netherlands National Committee for International Cooperation and Sustainable Development (NCDO) www.ncdo.nl wants to encourage them to do more to combat poverty.

The lives of 8.2 million people in developing countries improved in 2009 thanks to 20 multinationals, 18 of which were Dutch. That is the conclusion of a recent study commissioned by the NCDO: four million people profit from the commercial activities of these companies, while another 4.2 million benefit from all kinds of investments that these companies make in their communities.

In many cases such improvements are brought about by a company’s standard core business, explains NCDO project manager Arnold Rozenbeek. “Unilever, for example, sells smaller shampoo sachets in developing countries. The company has taken a good look at the needs of the market. By setting up a local factory you create jobs, also indirectly in the chain of suppliers. This puts people in a position to generate their own income. By doing that, you enable them to send their children to school.”

Millennium Goals
In 2000, 189 countries agreed to take action to reduce poverty, disease and hunger in the world. Their objectives took the form of the UN Millennium Goals, targeting issues such as hunger and poverty, education, equal rights for men and women, health care and sustainability.

The NCDO understands that a company’s primary objective is to make a profit. But even that can serve the interests of society. One prime example is the Dutch textile company Vlisco, which sells predominantly to Africa. The company employs 85 local workers in Africa and utilises local trading channels, reveals Arnold Rozenbeek of the NCDO.

“Their commercial activities alone have a positive influence on the living conditions of almost 9000 people. Particularly when it comes to combating poverty, the first of the millennium goals. They are just going about business as usual, but all the while they are improving living conditions. It’s a win-win-situation.”

Paul Hoebink, Endowed Professor of Development Cooperation at Radboud University in Nijmegen, confirms that companies can play an important role in a country’s economic development and in attaining the Millennium Goals. However, he also expresses reservations about the design and the credibility of the research. The figures presented in the Business Impact Report 2010 are based on the company’s own reports.

“In the past there has been a lot of criticism of a number of major companies who form part of this research,” Professor Hoebink recalls. “For instance, a campaign has been launched against Shell for the burning off of oil and the whole situation in Nigeria. There’s an example of a company whose environmental practices give cause for serious doubts. Since a company is hardly going to be eager to report such concerns themselves, a study like this should also take external data into account.”

The NCDO acknowledges that its report portrays the 20 companies in a mainly positive light. This week’s presentation was attended by a large number of companies which expressed an interest in combating poverty. The NCDO’s primary aim in publishing this study is to encourage others to work towards the Millennium Goals.