Doing Well by Doing Good

They may be driven by the best of intentions or sense unique marketing opportunities. But companies large and small are discovering that undertaking socially responsible initiatives—being part of the solution—can have a positive effect on the bottom line.

In Afghanistan, which has the world’s lowest female literacy rate and one of the highest maternal mortality rates, Arzu has provided health care and education to more than 600 women and their families.

One of the highlights of this year’s NeoCon, held in Chicago, was Designtex’s new Common Threads Collection, the result of a unique partnership with Arzu Rugs, a nonprofit, fair-trade organization for women weavers in rural Afghanistan. Last year, Arzu’s founder and CEO, Connie Duckworth, met with Steelcase’s president and CEO, James Hackett, to discuss a collaboration. Hackett thought Designtex (a Steelcase company) would be the best match because of its experience with textiles. “We discussed the social benefits of the program,” says Designtex’s executive creative director, Kimberle Frost, who designed the limited-edition collection with Rich Morrow. “Arzu’s whole philosophy was about giving these women economic empowerment.”

Arzu employs more than 700 women, providing them with above-market compensation and paying them throughout the entire rug-making process. “That way they’re never out any money, and at the end [Arzu gives] them a 50 percent cash bonus upon completion of the rugs,” Frost says. “The weavers never have to do anything but just work and weave the product, because [Arzu wants] them to remain debt-free.”

Arzu built a school and provides college scholarships for the women. The weavers enrolled in the program sign a social contract promising that all children younger than 16 must attend school. Arzu also offers nutrition programs and transportation to the clinics. “And they even made plans for everyone to participate in a community garden,” Frost says. She says the project had a significant impact on the Designtex designers: “There was a real connection with the weavers to my work. It was a different process.”—Paul Makovsky

According to UNICEF, the adult literacy rate in Pakistan is 55 percent.

We all know Ikea for injecting good design into dormitory-priced
furniture. But did you know that the Swedish blue-box retailer is also the single largest donor to UNICEF, with $180 million in contributions pledged through 2015? The two organizations have helped combat child labor, illiteracy, and unsanitary living conditions. For its latest effort, Ikea collaborated with the famed Dutch designer Hella Jongerius and women in Uttar Pradesh, India’s carpet belt, to create three intricately embroidered wall hangings, each depicting an animal inspired by fairy tales. “I took the fairy tales of Sweden,” Jongerius says, “but it’s also the roots of Holland, because we designed it, and the roots of India, because the women there produced it.” (At Jongerius’s insistence, each woman signs the piece she embroiders.) Apart from training women in a craft and providing them with a source of income, the project had another, unexpected outcome: the central workshop became a social nexus, in an area where women are generally isolated from one another.

In a different initiative, Ikea has launched a buy-one, give-one-back program to further educational opportunities for children in other
parts of the developing world. For every Sunnan reading lamp it
sells worldwide, the company donates a slightly sturdier version to UNICEF. The first shipments will be dispatched to children in areas of Pakistan where electricity is scarce. Each brightly colored, gooseneck lamp is equipped with an energy-efficient LED bulb and solar cells, which, when fully charged, generate up to four hours of light—so students can do their homework at night after completing their household chores. The challenge, says Nicolas Cortolezzis, an Ikea designer based in Älmhult, Sweden, was to make a simply constructed product that was robust enough to withstand high temperatures and a few knocks to the ground: “All the demands for extreme conditions are benefits for users in our countries as well.” —Belinda Lanks

An estimated 500 million Africans live without electricity. Instead,
they rely on candles or kerosene lamps, which give off unhealthy fumes, cause fires, and cost 10 to 30 percent of the household income. A kerosene lamp provides only two to four lumens, compared to a 60-watt bulb’s 720 lumens.

Philips is adamant on this point: its public-private partnership with the Dutch government to provide sustainable lighting solutions to sub-Saharan Africa is a “win-win-win” business arrangement. “This is not charity,” says Nick Kelso, who works on the company’s Off the Grid lighting initiative. “It’s good for the people of Africa, it’s good for Philips, and it’s good for the planet.”

By connecting Philips with local NGOs, the Dutch government is helping to create a distribution network in areas where there is no traditional commerce. For its part, the manufacturer will provide solar-powered lights that are expected to reach ten million people by 2015. So far, Philips has a CFL task lantern, an LED reading light, and an LED flashlight ready to launch in Ghana, Uganda, Kenya, Nigeria, and South Africa and—probably most important—will release an LED system for illuminating a whole home by the end of the year. “The need for lighting at night is tremendous,” Kelso says. “These countries are near the equator. All year round the sun goes down between six o’clock and six thirty, and it goes down very quickly. You can barely see your hand in front of your face. I spoke to one guy who cannibalized a tiny little LED and hooked it up to an AA battery,” Kelso says. “It was just a little pinprick in the dark. I asked him what he uses it for, and he said, ‘When I’m lying in my hut with my family at night, I put this by the door so I know the way out.’” The Off the Grid initiative may be business, but it’s hardly business as usual. “I find this to be the most meaningful project I have ever worked on,” Kelso says. “It doesn’t happen very often in life that you can be involved with something where you can really make a difference.”—Kristi Cameron

The company’s facilities for worker welfare are supported by a percentage of the purchase price of its products, amounting to $300,000 a year.

After graduating from law school in the 1980s, James Tufenkian had a plan. He would make as much money as possible as fast as he could and then spend the rest of his life making the world better. On a trip to Nepal in 1986, he met Tsetan Gyurman, a master weaver from Tibet who had been exiled from his homeland, and the two men formed a business partnership that gave birth to Tufenkian Artisan Carpets. Three or four years in, however, Tufenkian had to re-adjust the plan. He wasn’t making enough money to fund his social initiatives and didn’t want to put them off any longer.

“We realized there was a lot that we could do within our own operations,” Tufenkian says, referring to his facilities in Nepal’s Kathmandu Valley. “It started with basic things that we could do quickly—shelter, food, clean water for the workers. And then it grew quickly into medical services. The Montessori school we started about fifteen years ago had fifteen kids. Now there are about 600 students.”

In 1993, he traveled to Armenia, his ancestral homeland. The former Soviet republic was in the midst of an economic collapse, but Tufenkian spotted an opportunity. “They had great wool, and they had people who know how to weave carpets,” he says. “I thought that was enough to build on, so I started up the operations.” That initiative employs about a thousand women in different parts of the country. His work in Armenia now includes a foundation, a chain of boutique hotels, and a food-preservative company—all of which focus on channeling profits for social good.

In fact, profit is the engine that drives everything. Tufenkian has hardheaded advice for anyone interested in following in his footsteps: “A lot of people who have the mindset and the heart to do socially responsible work put that first. But you have to make money or you can’t do this stuff. You have to start with the making-money part and make sure you’ve got that down. Then just never lose that sense of the importance that it has to contribute to something better.” —Martin C. Pedersen

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