Citigroup
backs sustainable business
 |
| Coffee producers are
amongst the entrepreneurial schemes to benefit from New Ventures |
Rio de Janeiro,
Brazil 1 August 2002
- Financial services giant Citigroup is encouraging sustainable enterprise in
Latin America through its work with the World Resources Institute on the New
Ventures initiative.
Through a series of competitions
open to entrepreneurs across Latin America, a panel of experts selects small
and medium sized enterprises whose business ideas promise sustainability while
respecting social and environmental factors. Selected companies attend an international
investment forum, and can win access to business mentoring services.
As part of their partnership
with New Ventures, Citigroup provides financial experts for the Mentoring Programme
they helped develop. Volunteer corporate advisors help entrepreneurs tackle
everyday challenges such as meeting short-term financial needs, finding long-term
investments, gaining access to new markets, overcoming operational challenges,
and acquiring information on obtaining patents. Advisors also provide ideas
on strategic planning and networking.
"Our employee voluntarism
resource is very important," said Pamela Flaherty, Senior VP for Global
Community Relations at Citicorp. "The mentors who take part in this programme
are some of the best people we have - some work at a very high level, six or
seven days a week - and you find people who are excited to put their expertise
into these kind of problems.
"It's a good way for
bankers to take what they know and do good for a country."
Entrepreneurial schemes
to benefit from the New Ventures initiative include ecotourism operators, and
producers of shrimps, charcoal, wood, coffee, and electric vehicles for delivering
goods in densely populated cities. One Argentinean firm is dedicated to the
sustainable breeding of the guanaco - a wild Patagonian camelid - for its wool.
In Brazil, Ouro Fértil
is one company to benefit from Citigroup's support. A finalist in the 2000 New
Venture selection process, the company uses coconut fibres to create biodegradable
and organic products for sale on the local and international markets.
Originally, Ouro Fértil
produced humus and flower bulbs. A Citigroup mentor helped them develop a business
plan and get funding. They now supply a range of natural fibre products including
filler for car seats and mattresses, tubes for pine seedlings, and a vase whose
sales reached 50000 units a month in its first six months on the market. Ouro
Fértil now plans to expand production further to meet a growing demand
for coconut fibre as a non-polluting alternative to synthetic fibres.
Luiz Ros, Director of the
New Ventures Sustainable Enterprise Programme, said Citi
group's participation
gives the scheme credibility, particularly at the investment forum. He said:
"Randolf Freiberg of Salomon Smith Barney / Citigroup chaired the selection
panel and was a key-note speaker. For a sector that isn't always seen to be
credible, having a co-host like Randolf Freiberg helped bring investors we otherwise
couldn't attract.
According to Mr Ros, the
forums act as a pipeline for international funding, and help bridge the gap
between small enterprises and potential "green" investors.
He said: "In Latin
America, the investment market is not developed. There are commercial banks,
but they can require 3:1 collateral. These small companies don't have it. The
only way for them to accumulate capital is to over-exploit labour and natural
resources."
"I have learnt that
grants are great, but not sustainable in the long run. Companies come back to
you every few years. It's not socially, environmentally or financially viable,"
said Mr Ros.
"That's what's exiting
about New Ventures," he said. "It's really about encouraging companies
to succeed in the long run. We help SMEs to move away from the process where
they over-exploit labour and the environment, and move towards sustainable development."
According to Ms Flaherty,
Citigroup strives to make each community where they operate a better place,
saying that economically healthy communities are necessary for business success.
She said: "I think that as a global company, in more than a hundred countries,
we have to be perceived as adding rather than taking away in countries where
we operate. And we have people with skills to offer that can be really useful
in these countries."
Citigroup say their core
philosophy is based on high standards of ethics, fair lending and fair access
to financial services, customer privacy, diversity in hiring, and cultural and
environmental sensitivity.
Ms Flaherty believes the
partnership with WRI helps the group put these values into practice. She said:
"New Ventures really know how to harness business in a way that benefits
people and the environment."
Based on the success of
the Latin American scheme, the two groups are working together on encouraging
sustainable entrepreneurship in Asia. The new programme is due to be launched
in October.