While social and ethical responsibility is usually cited as the main reason motivating private sector companies to engage in humanitarian response, this engagement can also create clear business opportunities, says a study published today by OCHA. In recent years, humanitarian partnerships involving private sector companies are on the rise, with initiatives emerging in the mega-typhoon in the Philippines, the earthquake in Haiti, the conflicts in Syria and Yemen and the Ebola outbreak in West Africa.
These partnerships have been forged around different areas including communications technology, logistics, health, education, shelter, water, sanitation and hygiene (WASH), cash transfers, leadership training and the provision of technical support in crises.
Based on extensive surveys and more than 50 interviews with business representatives, the study looks at why and how the private sector engages in humanitarian action, unpacking the "business case" for collaboration between private companies and humanitarian organizations.
While corporate social responsibility is “first and foremost the opportunity to help the most vulnerable communities to become more resilient,” as one survey respondent said – a significant 70 per cent of respondents added that the expected return on investment was a crucial factor in deciding whether to pursue a partnership.
The study identifies four concrete drivers of private sector engagement in humanitarian action:
- To develop commercial opportunities by accessing and testing new markets.
- To reduce business risk and mitigate loss by protecting the consumer base.
- To build relationships with other businesses, international organizations and governments.
- To enhance business assets such as the company’s reputation or staff skills and motivation: “By engaging in humanitarian action, companies can test and evaluate internal standard operating procedures and instruments and have the chance to train employees under extreme circumstances,” one respondent explained.
The study also looked at four models of engagement that can add concrete value for businesses in a partnership:
- Businesses with products or services relevant to a humanitarian response interested in developing their business assets, innovation or accessing new markets.
- Businesses operating in areas potentially affected by humanitarian crises protecting their staff, infrastructures, and customers before, during and after humanitarian crises.
- Businesses providing pro bono products or services to improve the internal operations of humanitarian organizations or the humanitarian system as a whole.
- Businesses, their staff and their customers, making financial contributions in an effective and impactful way through aid organizations or directly to affected people.
Produced by Philanthropy Advisors and Vantage Partners, the study aims to inspire more business executives to join the growing number of public-private partnerships. While intended primarily for the corporate sector, it can also help aid organizations understand how the private sector operates and how to better engage with it.
“Creating smart and strategic partnerships with businesses can help encourage principled action and help humanitarian organizations achieve greater impact than by simply raising funds from companies", the study concludes. "Adopting a long-term and sustainable approach to partnerships (…) is also more likely to improve their own humanitarian emergency preparedness and response delivery.”