The Role of the Private Sector in Development

Yesterday I had the privilege to see Jeff Seabright, VP Environment and Water Resources, Coca-Cola, speak on campus. According to him, "business is and can be a tremendous driver of real change on the planet," and not by throwing money at the problem through philanthropy, but by pursuing a shared value (public goods) through their business model. It was an interesting perspective I hadn't had much cause to contemplate before hearing him speak. If businesses don't look after the long term, they won't have a company. Take Coke for instance: water is essential to their product, and watersheds are essentially the first line of production in their supply chains. If Coke doesn't "get smarter on watersheds," and work with local partners to sustainably manage watersheds, what is the future of their business, and their product, 100 years down the line?

It was very exciting to hear about the potential to do in the private sector, not just to think or prescribe policy. In one example, Mr. Seabright pointed out that Coke is the world's largest buyer of refrigeration equipment, which often involve hydrofluorocarbons (HFCs) in their mechanisms. Even though there was no government regulation at the time requiring HFC phase out, Coke felt it was an important step to take, and have spent $100 million to develop HFC alternatives in refrigeration units, and are now using nearly 1 million HFC-free units in their supply chain.

Industry can and will be a driver of development in the future, especially in the context of the environment and natural resources, which aren't inexhaustible. If companies have a vision of selling their products far into the future, they have to think about what that future looks like and how to get there, starting now. If pineapples are needed in the supply chain, helping farmers produce more high quality pineapples doesn't just help them, it helps the business as well (an example Mr. Seabright cited from Coke's operation in Ghana). If women control 70% of purchasing decisions, it is prudent to help more women entrepreneurs enter into the value chain. That's not philanthropy, it's growing the business.

Never before in history has the disparity between rich and poor been so vast. Never before has it been so clear that our resources are finite. It's a terribly important yet exciting time we live in. Where there are huge complex challenges facing ours and future generations, there are also new and innovative ideas for how best to address these challenges, including the role business can play in solving these problems. I look forward to seeing more exciting guest speakers on campus this year and next!