Oxfam Poverty Footprint: Understanding Business Contribution to Development

8/7/2019 Oxfam Poverty Footprint: Understanding Business Contribution to Development

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Why analyse business impacts on society?What is a Poverty Footprint?What does a Poverty Footprint examine?What does a Poverty Footprint offer?What does a Poverty Footprint reveal?

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Letter from the Director of Oxfam International Ox am is well aware o the extraordinary potential o business to positively

in uence the lives o poor people.Economic and social development provides vibrant markets that supportbusiness growth. Businesses need to be part o this development, activelycreating new opportunities and bringing benefts to all levels o the economiesin which they thrive.

When it works well, economic development benefts both businessand society. Yet it is not always easy or companies to see their rolein development, or to understand how their operations a ect people,communities, and society at large. Understanding the links betweenbusiness and development highlights dynamic opportunities or enlightened

businesses to make a positive di erence to their operations and the peoplewhom they a ect.

That is why we have developed the innovative Poverty FootprintMethodology. Building on a study that Ox am undertook with UnileverIndonesia in 200405 and on subsequent studies with domestic andmultinational companies, Ox ams Poverty Footprint Methodology helpscompanies to comprehensively understand how they a ect the peoplein their value chains and the communities and countries where they operate.

The Ox am Poverty Footprint Methodology is part o a collaborativeprogramme between Ox am Novib, Ox am America, and Ox am GB

(hence orth re erred to as Ox am) that has included the development o the Methodology and support materials and the undertaking o studies withselect companies. This Briefng or Business o ers insights into how businesscan work with governments and organisations such as Ox am to combatpoverty. It is the result o our extensive experience o working with businesses small and large all over the developing world. We hope you will fnd ituse ul, and that our Poverty Footprint can help you to do business better.

Jeremy Hobbs, Executive Director,Ox am International2


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Why analyse business

impacts on society?Know the effects of your business, improve your long-term viabilityOxfam knows it is important to understandhow business is affecting society. Companies across the world are increasinglyconcerned about the impacts that their businesses have on societies in their homecountries as well as abroad. For manycompanies operating in developing countries,impacts on society are related to e ects on

development and poverty reduction, and inturn play an important role in determining thesuccess o the business itsel .

Companies need to ensure that their business is viable in the long run. Long-term company growth and pro tability areintrinsically linked to the prosperity o thepeople who comprise and infuence markets.Development creates increasingly vibrantand reliable markets or raw materials,labour, products, and services, and this hasconsiderable knock-on bene ts or business.These markets are growing signi cantlyin developing countries, o ering attractivecost e ciencies, revenue growth, and thepotential or innovative product development.Companies need to be part o developmentin order to build new business opportunities,to ensure that society bene ts, and tostrengthen their long-term strategies.

Corporate investments are under increased scrutiny in terms of their returns to shareholders as well as society.Understanding the economic, social, andenvironmental e ects o a companysinvestment enables it to make better-in ormeddecisions and robustly manage risks relatingto resource allocation, deployment o capital,and securing returns on investment in amanner that osters good global corporatecitizenship. Investing in employees skills,livelihoods, health and well-being, andsecurity helps to alleviate poverty and italso builds an e ective work orce, reducesine ciencies, and promotes long-termcommitment to a companys operations.

Understanding the economic,social and environmentalimpacts of a companysactivities is critical to forminginnovative strategies thatmeet the demands of todaysrapidly changing world withbrands and services thatimprove peoples lives in asustainable and equitableway. The challenge for companies lies in measuringthe impacts of thesestrategies not just in terms of

nancial performance, but inhow they bene t society.

Paul Polman, CEO, Unilever

Companies are obliged to ensure that theycontribute towards society. Across theworld, the current nancial crisis is ocusingthe attention o investors, insurers, andgovernments on corporate governance andon increasing transparency and reporting.Most governments mandate companiesto operate in such a way as not to harm

society and the environment. 1 In the UK, theCompanies Act (2006) stipulates the duties o company directors, including having regard

or and reporting on the companys impactson communities and the environment. 2 In theUnited States, the Securities and ExchangeCommission recently voted on measuresintended to better in orm and empower investors to improve corporate governanceand help restore investor con dence 3, whilein South A rica, the King II Report and thedra t King III Code will make corporatesustainability reporting mandatory by 2010. 4

Increasingly, companies need to know andunderstand their e ects on society in order tomeet their legal obligations.

A companys business model canbe improved by understanding itseconomic and social effects and bybuilding corporate responsibility intocore business functions. The businessworld increasingly understands the need toinvest in sustainability. But while corporatereporting on environmental per ormancehas made great strides, many companiesstruggle to understand the e ects o their

operations on society, to know what theyshould ocus on, and learn how they canmeasure improvements. To truly integratecorporate responsibility as a strategic prioritythat identi es new business opportunities andmitigates otherwise unknown risks, a companymust understand its e ects on people

rom employees, suppliers, and distributorsto its customers and the communities andcountries a ected by its operations. There is,there ore, a need or robust and transparentmeasurement and learning tools to providebusinesses with this knowledge.

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What is a Poverty

Footprint?Putting people at the centre, demonstrating a commitment to action,and learning together

The method o assessing a companysimpact on society needs to be fexible, torefect the perspectives o people living indynamic and changing contexts, and it needsto be relevant to the company.

Ox am has developed a methodology that ts

these needs. It is based on our decades-longexperience o working in development andwith business and it has been tried with anumber o companies. This Brie ng or Business summarises how a business canbene t rom analysing its impact on society,outlines the Poverty Footprint Methodology,and describes how a Poverty Footprint Studyis conducted.

What is a Poverty Footprintand who can use it?Ox am developed the Poverty FootprintMethodology or companies to assess andunderstand their e ects on society and onpeople living in poverty. The outputs o aPoverty Footprint assessment can help abusiness improve its operations and ensure apositive e ect on those living in poverty. Itcan help to generate opportunities or innovative business solutions, or example insupply chain management in the ace o risksposed by climate change.

The Ox am Poverty Footprint Methodologycombines local assessments o livelihoodimpacts, value chain analysis, and anassessment o economic contributions intoone comprehensive approach. 6 It is unique

or its people-centric approach to assessingand understanding corporate impacts. Itexamines the issues that are important to

people a ected by the company, and in allresearch and analysis processes centres onpeople (workers, producers, suppliers,distributors, local communities, and country-wide impacts).

The Ox am methodology stipulates that

Poverty Footprint Studies be carried out byindependent research teams supported bythe company and by an NGO such as Ox amwith development expertise. It is also robust,allowing companies to tailor a study by

ocusing on a particular area o research,such as its core activities in a single country.

Conducting a Poverty Footprint Studyprovides participating companies with acomprehensive report, presenting thequalitative and quantitative ndings o thestudy, which can be used to guide businessdecisions and orm the evidence base or

change within the company towards goodcorporate citizenship. The report, developedwith the support o the participatingcompany, ar ticulates a series o tailoredimprovements, which might range romsuggestions or new policies and practices toideas or the development o new productlines targeted at low-income markets.

The Ox am Poverty Footprint is suited tolarger companies with global or nationaloperations that wish to analyse their economic and social per ormance in one or more countries and to improve upon it. Itallows or lessons in the countries o study tobe scaled more broadly through thecompanys operations in other countries, andultimately o ers the potential to drive globalimprovements or the company.

We must ensure that capital markets integrate the full costs of environmental and socialfactors in business strategies, risk management and public disclosure. Achieving this willensure companies are rewarded for strong sustainable performance 5

CERES

The OxfamPovertyFootprintMethodologycombines localassessmentsof livelihoodimpacts,value chainanalysis, andan assessmentof economiccontributionsinto onecomprehensiveapproach.

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What will my company gainrom doing a Poverty

Footprint Study?First and oremost, conducting a PovertyFootprint Study improves a companysknowledge and understanding o its e ectson society, some o its business risks, andsome present opportunities. A study helpsto in orm decisions about a companys

allocation o resources, supports reportingto shareholders and other transparencyreporting requirements, and acilitatesthe development o new strategies or the business.

Second, by conducting a study, a companycommits to involving its employees in alearning journey through the researchprocess. Due to the collaborative approacho a Poverty Footprint Study, employees gain

rst-hand experience o understandingthe e ects o business decision-making,processes, policies, and practices onpeople. A Poverty Footprint Study alsoprovides evidence-based ndings or a

company to guide its own decision-makingas well as or reporting on its activities toexternal stakeholders.

Understanding a companyseffects on society canhave business bene ts including lower costs andhigher pro t margins.

Mark Lewis,Clean Conscience Cotton

The future of business depends on the sustainable, responsible sourcing of the factors of production. Labour, of course,is one key aspect of this. It is only sensible that businesses are mindful of the livelihoods of those people who live on the land,are involved in the production, processing, and trading of the materials they need. Otherwise the future of business itself is

surely unsustainable. Measuring the effects of a companys operations on poverty and development provides an importantplace to start. But i f sustainable development is to become a movement that effectively and ef ciently joins business todevelopment the key will be in the interpretation of the data generated, and realising the uses to which it can be put. In order to have a positive impact, the analysis has to build the business case for development based on practical, holistic solutionsthat positively contribute to the totality of the system concerned livelihoods, the environment, and commerce.

Dr Graham Clewer, Director of Ethical and Community Trade, The Body Shop

Conducting a Poverty Footprint Study can lead to afundamental shift in the way in which a business operatesand affects development. For each company that takes part,a study will produce the following results:

Greater corporate accountability and transparency about the role of thecompany in fostering sustainable development and enabling it to provideevidence of its contribution to poverty alleviation.

Improvements to business models that result in poverty reduction byenhancing positive effects on society and mitigating negative effects.

Joint organisational learning through a research process that involves arange of stakeholders in both the research and the analysis of the ndings.

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What does a Poverty

Footprint examine?Every company is different, so each Poverty Footprint is uniqueA Poverty Footprint examines ve keyareas where companies interact with vedimensions o poverty to assess the e ectso the company on peoples lives. It alsolooks at the way in which these e ects relateback to the company.

Research areasThe research is organised around ve mainResearch Areas that group the ways inwhich companies interact with and a ectpoverty and development.

Value chains: how a companys valuechain and its procurement, manu acturing,and distribution policies and/or practicesinfuence the ability o poor people to accessgood-quality employment, earn a living wageor sustain a business, and participate in themarket.

Macro-economy: how a companyseconomic contributions, including distributiono pro ts, shareholder dividends, taxes, andemployment, a ect the standard o living o poor people, or the balance o payments,in countries o operation.

Institutions and policy: how the companysactions regarding social institutions andpolicy a ect the well-being o people livingin developing countries. It considers thee ects o lobbying, direct investment, andprocurement and distribution practices inrelation to the development o institutions(such as producer organisations, unions,

cross-sectoral learning labs, social networks,womens groups) and policies that ocus ontrade, nance, education, and health.

Social implications of environmentalpractices: how a companys environmentalpractices a ect the livelihoods and health o poor people, their ability to access naturalresources, and their risk o being a ected bya natural disaster. The resilience o the valuechain to environmental shocks is considered.

Product development and marketing:how a companys products and services

and its marketing strategy infuence thecultural practices o indigenous and localcommunities (including gender impacts),a ect their health and well-being, andshape their ability to obtain essentialgoods and services.

PovertyFootprintStudiesexamine thebusinessmodelsthat drive acompanyseffects onsociety

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Business driversThere is a well-acknowledged

circular relationship between thesocietal impacts o business

and business per ormance.An important part o

every Poverty FootprintStudy is analysing the

business e ects andusing this analysisto identi y risks andopportunities, aswell as to makerecommendationsthat are basedon a soundbusiness case.Poverty FootprintStudies examinethe business

models thatdrive a companys

e ects on societyand identi y new

opportunities or positivechange. It does this by

looking at ( or example)growth, pro ts, and return on

investment; employee motivation,retention, and productivity; risk

management; innovation and newopportunities; competitive advantage;

as well as costs.

Poverty Footprint compared withother processes

A Poverty Footprint is di erent rom a value chainanalysis. Poverty Footprint Studies add the relevantcontext to assessing economic and social impactse.g. national policies that rame business operations.The Poverty Footprint approach is comprehensive in itsapproach, with value chains orming just one componento a multi-pronged assessment.

Value chain analysis orms part o a Poverty Footprintanalysis o a sample o products sold by a company.The diagram here illustrates how a value chain analysisand a Poverty Footprint relate to each other.

A Poverty Footprint is also di erent rom audit or certi cation processes, which ocus on compliancewith codes o conduct. While compliance is examinedduring a study, it is the strategic business principlesunderscoring compliance that are the ocus, combinedwith a broader assessment on the way the company isimpacting on people living in poverty. This includes butgoes beyond the rights included in codes o conduct.

Macro economy

Productdevelopmentand marketing

Institutionsand policy

Value chain analysis

Socialimplications of

environmentalpractices

DiagramThe ve research areas o a Poverty Footprint StudyThe research area o value chain analysisis expanded with the example o Lt AgogoDairy Company in Haiti. Value chain analysisis one part o a Poverty Footprint Study.

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What does a Poverty

Footprint Study reveal?People are at the centre of every Poverty Footprint StudyDimensions o povertyIn a Poverty Footprint, a companys operations are analysed in terms o ve critical actors that are important

or poverty alleviation: standard o living; health and well-being; diversity and gender equality;empowerment; and stability and security.

The examples on this page describe research that placed people at the centre o theanalysis. The conclusions that emerged rom the research enabled all par ties tounderstand more clearly what actors were contributing to the development o

their business opportunities, and what actors were increasing their risks.

Background to the Poverty Footprint a holistic study o Unilever IndonesiaOxfams work with Unilever Indonesia in 200405 set thestage for analysing the effects of business on development. 7 Together we analysed the macro-economic effects of the companys investment policies, the employmentsupported by its operations, and its impacts on low-incomeconsumers in the market place. The research also lookedin detail at the value chain from supply to distribution for the Unilever Indonesia product, Kecap Bango, a typeof savory sauce.

The research included eld research with soya beanand sugar farmers and traders, factory workers andmanagement, people living in villages that were the focusof Unilevers philanthropic activities, communities whereadvertisements were located, distributors of the product(drivers and petty traders), and some government of cials.

The study produced some surprising ndings and helpedUnilever Indonesia to gain new insights into its business.For example, the company discovered that almost twice asmany people are involved in the distribution of Kecap Bango

as are engaged in its production, and that the number of peopleworking part-time was much higher than previously assumed.Other ndings pointed towards the need to improve employeeconditions for sub-contracted staff.

After completing the Unilever study, and through completing studies withseveral other companies, Oxfam adapted the methodology to create itsPoverty Footprint Methodology, suitable for broader application.

Standard o living:access to jobs,

training, research anddevelopment, and credit

and markets, ensuringan adequate living and asustained livelihood, and

a predictable and stableincome.

Health and well-being:access to health care,

education, and socialservices that are critical to

general well-being.

Diversity and gender equality:

equal access to jobs, training,advancement, bene ts, and

other rights or womenand minorities, as well as

opportunities to maintaincultural identity.

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Social analysis in practice an example rom IndiaThe Indian company Harian Kissan Bazaar (HKB) engaged in a short study with Oxfam toassess the effects of its operations on development. Company staff took part in designing thestudy and setting the parameters for the questionnaire. When the researchers asked aboutthe relevance of women to the companys operations, staff did not understand the roles thatwomen played in their supply chains or markets. After some initial questioning of customers,it turned out that women formed more than 70 per cent of the consumer and client populationusing HKBs products. The company staff then changed the parameters of the study, did follow-up work to improve their understanding of their operations relative to women, and engagedmore directly with women consumers. Critically, these staff members now had a greater immediate understanding of their company and the society in which it operated. At the sametime, they bought into the project without the company needing to do any internal PR. As theorganisational development expert Professor Peter Senge has noted, learning journeys suchas this one enable innovation and insight to emerge, fostering co-learning and the co-creation

of solutions.

Case study Clear Conscience CottonWork by other organisations has informed our methodology. For example,

Clear Conscience Cotton Limited (3C) 8 has developed and tested a

service for textile brands wishing to develop pro-poor sustainablesupply chains. The feasibility and cost-effectiveness of the approach

was piloted through a study in India with a major brand.

3C worked with the brand and three of its suppliers to identifypotential improvements that could both deliver economic

bene ts and address the social and environmental issuesof greatest concern to stakeholders across the supply

chain. 3C asked workers and community members toidentify and articulate their needs and problems. At thesame time it evaluated the most signi cant impacts of the supply chain on poor communities. The processpulled together existing information from the brand,the suppliers, public bodies, and non-governmentorganisations (NGOs).

The studys ndings helped to develop a deeper understanding of business risks, constraints onmanagers, and the potential development impactof the complete life cycle of the product. Byinvolving a cross-section of those in the extendedsupply chain, it also improved communicationbetween them, a pre-requisite for effective action.

The project resulted in the development of a jointSustainability Improvement Plan for the brand, its

employees and suppliers, local communities, andNGOs. The Plan revealed the following facts:

(1) Costs could be reduced by:

sharing knowledge and improving communication encouraging joined-up thinking across the supply chain

(about materials, waste, downtime, etc.) increasing worker and management skills and motivation,

leading to gains in ef ciency and productivity reducing staff turnover

reducing audit and compliance management.

(2) Margins could be improved by:

inspiring and empowering managers to deliver a shared vision reducing the risk of damage to the brand (and those of suppliers)

engaging with consumers to generate increased loyalty and attract new customers.

3C also advised the brand on how to set up partnerships with reliable local NGOs, and how tosupport small suppliers through the implementation of the Sustainability Improvement Plan.

Empowerment:access to opportunities

to participate in and toinfuence decisions that

directly a ect the liveso people in developing

countries.

Stability

and security:access toresources that help

people to endureshocks to their

livelihood: personaldisasters (such as

job loss or sickness),weather-related disasters,

and wars, crime, andviolence.

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What does a Poverty

Footprint involve?The Oxfam Poverty Footprint Methodology provides a six-phase process to plan and to carry out a study (see Table). It is designed on a modular basis, so that one aspect o the research can be completed be ore work starts on another area. The Methodology provides guidance on overall resource requirements and on setting up and managing researchteams. The process can last rom three months to two years, depending on the size and type o company.

Stages of a Poverty Footprint study Phase 0: Pre-study preparation and project management

Objective: Set out project scope, terms o re erence, roles and responsibilities, timing and resources.

Agree on objectives o the study.Outcomes: Agreement to proceed with Poverty Footprint; project plan, schedule and budget

determined.

Phase 1: Project Initiation

Objective: Prioritise and confrm the scope o the study and obtain buy-in rom internal stakeholders.

Outcomes: Mutual understanding and trust built; boundaries o the study set;background research conducted; stakeholder mapping completed.

Phase 2: Study design

Objective: Draw up research and analysis methods or the study.

Outcomes: Research plans, methods, questions and schedules confrmed.

Phase 3: Primary research and data analysis

Objective: Conduct research and carry out primary analysis.

Outcomes: Preliminary research report based on feld work studies.

Phase 4: Study outputs

Objective: Publish and communicate research fndings.

Outcomes: Research report published; recommendations presented to company; commitment madeto ollow up on recommendations.

Phase 5: Implementation of recommendations, monitoring and follow-up

Objective: Use Poverty Footprint fndings to inspire corporate responsibility activities and stimulatechange within the company.

Outcomes: Changes made to the business model; new opportunities and initiatives developed;companys positive e ect on society increases.

Oxfam is particularly well placed to ful l the requirements laid outby the Poverty Footprint Methodology due to its:

global presence convening abilities thanks to relationships with local actors in di erent countries research expertise globally extensive knowledge o issues con ronting people living in poverty experience in combining local programmes with global policy orums.

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What does the Poverty

Footprint offer?The Oxfam Poverty Footprint Methodology provides a systematic way to carryout a study that can be characterised by the following parameters.

StrengthsIt is people-centred.

If business activity is to be good for communities as well as the company,any analysis must consider both .

This means using research methods such as the Poverty Footprint thatinvolve company employees andthose who manu acture or supplyinputs, distribute the companys goodsor services, supply raw materials,and provide various services to thecompany. Suppliers and employees, andpeople who are not directly connectedto the business but who live in the wider community are also included.

It shows a commitment to action.

Launching a Poverty Footprint Study

should be a public commitment,demonstrating that the company wantsto take action towards de ning andfostering sustainable communities, in turncreating a more sustainable business.

When management and employeesunderstand that the study has senior management support and is intendedto lead to continuous improvement,they are more likely to participate

ully and openly in a study. Publicreporting o the study and its ndingswill demonstrate to stakeholders

that the company is serious aboutimproving its social impacts andadds to the companys transparencye orts. This does not mean disclosingcon dential or sensitive in ormationabout the company, but demonstratesthat, through a process o negotiation,agreement has been reached on keylearning points.

It involves collaboration and joint learning.

Engaging with stakeholders enablesdeep insights and creative conclusions.

A company that involves its employees

and other stakeholders directly in theprocess o studying the business andits e ects (including data collectionand analysis) is more likely to identi yopportunities and implement positivechange than one that hands over theconduct o a study to a third party andwaits or a nal report. The processo conducting a Poverty FootprintStudy requires all participants to worktogether to interpret the data, to identi ywhere problems and opportunities lie,and to nd practical solutions.

It provides a comprehensive data set.

A Poverty Footprint Study generatesboth quantitative data and qualitativeinformation, and analyses the formaland informal effects of companyoperations.

Using di erent research methods,including many qualitative andparticipatory approaches, allows theresearch team to examine the dynamicnature o development. Evaluating acomprehensive range o indicatorso human well-being rather than, or example, only measuring the number o jobs created enables companies tomake changes that bene t them and thecommunities whom they a ect.

ParametersIt takes time and resources.

Compared with other studies, a PovertyFootprint takes time and requiresdedicated resources and the supportand time o the companys senior leadership. It takes a ew months tocompile all the in ormation that ispublished in a sustainability report.There are methods or completing valuechain analyses in around ten days;economic snapshots provide ready dataand can be compiled even more quickly.But none o these o ers the depth o research, the comprehensive range o

ndings, or the rigour o analysis that aPoverty Footprint can provide.

Once a relationship o trust has beendeveloped between the companyand research partners, the mosttime-consuming component o a

Poverty Footprint Study is discussingand agreeing on the scope o thestudy. A ter that, with the systematicapplication o the Ox am PovertyFootprint Methodology, it can take upto six months to conduct research andanalysis and to publish the ndings.

It means making a commitment to actions.

It can sometimes be challenging or a company to sign up in advance totaking some orm o action be ore thataction or change is clearly de ned.Companies that take on PovertyFootprint Studies must be committedup ront to contributing to societalimprovements at all levels o their operations. Otherwise, the researchmight risk nding easy solutions or super cial changes that in the longterm do not create the intended value.Shortcuts that serve one purpose such as timely completion may comeat a cost, such as ailing to discover therisks o a particular activity.

It is not a tool for comparison or benchmarking.

The Poverty Footprint is done on acase-by-case basis. It only allows ad hoc comparison with other studies;it does not aim to make systematiccomparisons. The studies contributetowards a companys continuousimprovement and are not intendedto serve as benchmarks or impactassessments that rank one companyagainst another.

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ConclusionBusiness needs to understand its operating context

Organisations that are fexible, adaptive, andproductive will excel in conditions o rapidchange and uncertainty. Business growthrequires a company to identi y trends, tounderstand how it operates today and howit might operate within those orward trends,and to develop a coherent organisation-wideapproach to investment. To do this, it needsto know how to measure, monitor, evaluate,and manage its activities in both the shortterm and the long term.

The Ox am Poverty Footprint Methodology

advances the ability o companies andother stakeholders to understand how their operations a ect people, and to learn howto integrate sustainability into their corebusiness. It o ers a people-centred analysisthat supports positive change, collaborativethinking, and comprehensive understandingo the e ects o companies on development.Companies can use the Poverty Footprintto identi y and to improve their impacts onsociety and to identi y opportunities or their own business.

Pro essor Peter Senge writes in his recent

book: Fortunately, more and more peopleare beginning to sense that the mounting

sustainability crises are interconnected symptoms o a larger global systemthat is out o balance. As soon as peopleunderstand this, their view o the problemsshi ts. They start to see the extraordinaryopportunities or innovation that canoccur when we abandon ear ul, reactivementalities. They start to realize the deepproblems we ace today are not a resulto bad luck or a greedy ew. They are theresult o a way o thinking whose time haspassed. 9

In this current period o major change anduncertainty, companies need to be adaptive,and they need employees to engage withthem and to use their creativity to address thenew challenges in innovative ways. PovertyFootprints can lead to the kind o deeper understanding o issues and the realisationo opportunities that can lead to better business and a better world.

Oxfam is currently holding an on-line consultation on thePoverty Footprint Methodology, where you can review theMethodology and provide your comments.

Oxfam intends to publish the Poverty Footprint Methodology via its websitein early 2010, providing companies with comprehensive information abouthow a study is designed and conducted, and how results are analysed andcommunicated. The website will also provide useful links and tools for carrying

out research and analysis, as well as examples of study materials that havebeen developed and used during other Poverty Footprint Studies.

If you would like further information about Poverty Footprinting, or areinterested in participating in the consultation, please contact: Lysiane van der Knaap [email protected]

Companies canuse the PovertyFootprint toidentify and toimprove their impacts onsociety andto identify

opportunitiesfor their ownbusiness.

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Endnotes1 http://knol.google.com/k/osman-masahudu-gunu/the-impact-of-government-regulations-on/1kietb77pgwru/18#, last accessed 15 October 2009.

2 Companies Act (2006), Sections 172 and 417. http://www.opsi.gov.uk/acts/acts2006/ukpga_20060046_en_1

3 SEC Press Release of July 1, 2009, available at http://www.sec.gov/news/press/2009/2009-147.htm. Last accessed 18 October, 2009).

4 Institute of Directors in Southern Africa. King Code of Governance for South Africa 2009. http://african.ipapercms.dk/IOD/KINGIII/kingiiicode/ last accessed 15 October 2009.

5 CERES (US national network of investors, environmental organizations and other public interest groups working with companies and investors to addresssustainability challenges such as global climate change), quote available at http://www.ceres.org/2020main ash800 (see 20:20 vision, 1st pillar, Ensure HonestAccounting), quote last accessed 13 October 2009

6 ODI, DFID, BAA event (April 2009); ODI Framework for Impact Assessment document, April 2009. The Overseas Development Institute (ODI) recentlydescribed four main types of impact assessment that can generate valuable information about impacts on poverty and development:

1. Local Assessment: livelihood effects and stakeholder views of a rm or initiative

2. Value-Chain Analysis: enterprise and poverty effects of the entire value chain

3. Economic Contribution: multiplier effect of a business in the national economy

4. Reporting against Fixed Indicators: company performance reporting against a scorecard of indicators.

The ODI draft employs the term Value-Chain Footprinting. As Oxfams work spans local assessment, value chain analysis, and economic contribution, we prefer the term value chain analysis.

7 Jason Clay (2005) Exploring the Links Between International Business and Poverty Reduction: A Case Study of Unilever in Indonesia. Oxfam GB, Novib OxfamNetherlands, and Unilever (2005).

8 3C was set up in September 2006, with support from Oxfam and Twin.

9 Peter Senge, Bryan Smith, Nina Kruschwitz, Joe Laur, and Sara Schley (2008) The Necessary Revolution. New York, Doubleday.

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About Oxfam InternationalOxfam International is a confederation of 14 af liates working together

in over 100 countries to nd lasting solutions to poverty and injustice.

DevelopmentWorking with localpartner organisations,

Oxfam helps people to worktheir way out of poverty

and stay out of it.Oxfam supports people in

realising their rights, forexample, to education

and health care.

Emergencyresponse

Providing life-savinghumanitarian aid

during emergencies,and helping

people prepare forfuture crises.

Campaigning Tackling the

underlying policiesand practices,

and putting pressureon leaders to make

real andlasting change.

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This paper is published by Ox amInternational in the Briefngs orBusiness series, which aims to helpdevelop the debate on the role o theprivate sector in poverty reduction byo ering ideas and insights into topicalpoverty issues and what they mean

or business.

Ox am International November 2009Published by Ox am International, Ox am International Secretariat,Suite 20, 266 Banbury Road, Ox ord OX2 7DL, United Kingdom.

Online ISBN: 978-1-84814-100-1

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Oxfam Poverty Footprint: Understanding Business Contribution to Development

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