Policy Measures to Support Inclusive and Green Business Models

Introduction

Are poverty alleviation and environmental sustainability conflicting objectives? Or do the two goals support each other? Both are traditional domains of policy-makers aiming to promote green growth and pro-poor or inclusive growth. But in recent years, market-based approaches that harness the capabilities of private-sector players have gained credibil-ity and attracted increasing attention. In the process, traditional roles have been blurred. Today, solutions to tackle poverty alleviation and environmental sustainability are being implemented by a wide array of actors.

Strategies to alleviate poverty and achieve environmental sustainability are often highly interlinked and definitions by both policy and business actors of one strategy will often cross-reference the other. UNESCAP’s defini-tion of green growth, for example, refers to ‘socially inclusive development,’1 while the Mil-lennium Development Goals include ‘Ensure Environmental Sustainability’ as one of their eight goals. On the business level, definitions of inclusive business strategies state that their objective is to include the poor as ‘participants in low-carbon and climate-resilient growth.

While there are examples of solid, scaled business models that satisfy both social and environmental criteria, in practice the two objectives often collide. The question remains as to how businesses succeed in aligning both objectives – and how they can be supported in doing so. This report addresses these questions by, first, analysing the underlying tensions between inclusive and green business, sec-ondly, mapping the paths towards synergies on a business level and, finally, sketching policy options to support market-based approaches in this field.