Business Social Innovation To Tackle Cycles Of Poverty

The coronavirus pandemic has shone a spotlight on working conditions worldwide, including a major focus on which employees have had to continue working in person with fewer protections than others. Often, these employees come from marginalized communities that are already disproportionately affected by the virus.

While the pandemic will not be with us forever, many people from marginalized communities will continue to face higher barriers to employment and live with the effects of cycles of poverty long after it is over. Consumers, however, are increasingly taking notice of — and punishing —companies that fail to employ and provide protections to vulnerable populations.

Many companies, Certified B Corporations prominently among them, are strategically hiring people from these communities. These companies are using new and innovative business practices to effectively support their workers, from open hiring and providing income advances to forging innovative supply chain partnerships and using technology to support workers with disabilities. Recently, I interviewed several B Corp leaders to learn about the strategies they are using as part of my research on purpose-driven business.

Using Proven Methods to Alleviate Poverty

It can be hard for businesses to know whether their resources are being well allocated when they are being used to address issues like poverty. Cotopaxi, a sustainable outdoor apparel and accessories brand based in Salt Lake City, Utah, established the Cotopaxi Foundation to invest in research-driven poverty alleviation.

“Our impact portfolio takes learnings from MIT’s Poverty Action Lab and invests in areas with proven track records of alleviating economic despair such as technology access, adaptive education, health care access, and job readiness tutoring,” Annie Agle, Cotopaxi’s director of brand and impact, says.

“Our company was founded by Davis Smith and Stephan Jacob, both of whom have an awareness and sense of moral obligation around poverty alleviation,” Agle says. “More than 400 million people live in extreme poverty, and capitalism has exaggerated the disparities between the wealthy and poor. Davis felt that capitalism must become a force that took into account and played an active role in helping resolve inequality.”

As a result, the company was incorporated as benefit corporation, a new corporate form that recognizes companies’ responsibility to its stakeholders beyond shareholders and certified as a B Corporation, to further demonstrate its social and environmental commitment and performance.

Throughout the pandemic, Cotopaxi has continued to leverage its partnerships to provide support to those in need.

“The stories and results generated from the fantastic work of our heroic grantee partners makes me get up every day with a sense of informed optimism,” Agle says. “From learning that our local chapter of the International Rescue Committee has helped more than 500 refugee families gain internet access since the outbreak of COVID-19 and that Fair Trade philanthropy ensured that none of our sewers in India experienced layoffs or periods without financial support, it’s really just my job as a company sponsor to ensure that our organizations have the kind of long term investment—our grants are multi-year—they need to thrive and fulfill their missions.”

In addition to its corporate giving through the Cotopaxi Foundation, the company recognizes that much of its potential to address poverty lies in its supply chain.

“We know that currently upwards of 120 million people experience forced labor or human abuse in global supply chains,” Agle says. “While many developed nations have benefited hugely from cheap labor and distance for environmental impacts, Cotopaxi has always recognized that its biggest negative impacts occur in the supply chain. There is a tremendous opportunity in driving positive change as a value chain stakeholder. We work with our suppliers as equals and have worked towards meeting all of the UN guiding principles surrounding fair labor, humane conditions, responsible management, and environmental improvement. We don’t just feel that upholding human rights is a ‘responsibility’ but rather see it as a moral pre-condition to doing business.”

Providing Persons with Disabilities and Refugees Employment Opportunities in Tech

Many modern workplaces are unintentionally inadequately equipped to support persons with disabilities (PWD). While these deficiencies are sometimes overlooked, they create a situation in which PWDs do not have easy access to employment opportunities.

Genashtim, a Singapore-based company that provides e-learning solutions as well as online language training and IT support, explicitly hires PWDs and people from other marginalized communities.

“For a lot of these people with disabilities, technology is their window to the world,” Thomas Ng, the founder of Genashtim, says. “Many of them are from poor environments, and it’s very difficult for them to go out—accessibility, cost and safety. So they stay at home. For most of them, this is their first and only job.”

Genashtim’s clients are predominantly multinational companies and government institutions who are mostly unaware of the social impact aspects of Genashtim. They compete on commercial basis for their work.

Refugees are also a community that can benefit from remote tech employment. After seeing Genashtim’s business model, one of Ng’s friends encouraged him to look into hiring refugees.

“In 2018, around March, we had about 70 people on our payroll,” Ng says. “And at that time, 90% of the people on our payroll were people with disabilities. I have a friend who was a volunteer with the Jesuit Refugee Services in Singapore. She was the one that came to me and said, ‘Thomas, you hire people working from home. Can you give some jobs to refugees? There are Middle Eastern refugees who are stuck in Indonesia.’ My reaction was, ‘send me their resumes.’”

According to its website, 60% of Genashtim’s workforce are PWDs and 30% are refugees. The company has people from these marginalized communities among its management team as well.

“Welcoming people from marginalized communities into the workforce comes naturally for us,” Ng said. “we have two managers who are blind, five in wheelchairs and three are part of the LGBTQ community. When management is like that, I think it’s natural as you go forward. And also it’s a stated mission of the company, so we tend to give opportunities to people who are from any disadvantaged group.”

Aside from inadequate workplace accommodations, PWDs often lack safe transportation to get to work in the first place.

“Unfortunately, it’s often not safe for them to go to work,” Ng says. “And sometimes it’s just very difficult for them.”

Ng says he heard one employee with a visual impairment was pushed on a bus on the way home from meeting he and his wife in Beijing, and broke her collarbone. Discrimination has also made it hard for PWDs to get transportation.

“Once we hired an accountant in a wheelchair, and I wanted him to come to the office which we had for a short while at that time, because I wanted him to meet a few people,” Ng says. “He told me that he waited on the roadside, in his wheelchair for about three hours. Many taxis passed, and no taxi would stop for him because, basically, the taxi drivers take one look at the wheelchair, and think, ‘I’m not going to trouble myself to carry the wheelchair and put it in my trunk.’”

Whether training PWDs or refugees, Ng says the skills these employees develop are increasingly important in the global economy.

“It’s quite clear that there is a shortage of digital talent in the world today already,” he says. “And if you can train them to develop digital skills, then they can actually alleviate the shortage of digital talent around the world because it’s the work that you don’t need to be sitting in an office to do. Connect to the internet and do the work. So the whole idea is to develop these people’s skills, so that they can be a source of talent for the market.”

Hiring Anyone Who Applies

There are a number of reasons companies may not decide to hire someone, from the amount of education they have completed to a past conviction. When someone’s background prevents them from gaining employment, they can get stuck in chronic poverty.

Open Hiring is the practice of hiring whoever applies for a job—no questions asked. Greyston Bakery, a dessert foods company, uses Open Hiring and created a Center for Open Hiring to encourage other companies to adopt the practice.

Read more about Greyston Bakery’s Open Hiring here.

Giving Employees Advances on Income in Times of Need

Many people do not have enough money to cover unexpected expenses. When emergencies happen, these people can be forced to take on debt or seek help from others, if they are able to find a way to get the necessary money at all. 

Rhino Foods, a manufacturer of ice cream products, spearheaded an Income Advance program that enables employees to take out loans of up to $1000. These loans are paid back through a deduction on the employee’s paychecks, which then rolls over into a savings account if the employee wants, helping them build financial security.

Read more about Rhino Foods’s Income Advance program here.

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