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Last week’s Fortune magazine ran a most incredible story. It details a partnership between Nobel Peace Prize winner Muhammad Yunus and Danone, the French food company, to build a yogurt factory in Bangladesh. What’s so amazing about the story is that Danone believes that profits are not necessarily “always” essential to creating shareholder value, that there are times when it is appropriate to deploy corporate capital in the pursuit of social benefit that will ultimately create additional brand value.
(Danone) can see social benefits, something (Danone CEO Franck Riboud) says may ultimately be reported on Danone's bottom line along with the revenue from its Dannon and Stonyfield yogurts and Evian and Volvic mineral waters. "We're saying that profit maximization is not going to be the only way to measure value," says Emmanuel Faber, Danone's former CFO, who now runs Asia-Pacific operations for the company and who arranged the lunch between his boss and Yunus. "There is a whole emerging area of picking stocks for social impact.”
The factory – and ultimately 50 more, if it works – will rely on Grameen microborrowers buying cows to sell it milk on the front end, Grameen microvendors selling the yogurt door to door and Grameen's 6.6 million members purchasing it for their kids. It will employ 15 to 20 women.
Danone estimates that it will provide income for 1,600 people within a 20-mile radius of the plant. Biodegradable cups made from cornstarch, solar panels for electricity generation and rainwater collection vats make the enterprise environmentally friendly.
What if we lived in a world where companies didn't measure their performance only in terms of revenue and profitability? What if pharmaceutical companies reported on their bottom lines, along with those familiar figures, the number of lives saved by their drugs every quarter, and food companies reported the number of children rescued from malnutrition?... That's the world Yunus envisages.
This is a real breakthrough, if we can harness the experience and financial resources of the world’s largest companies to address fundamental issues of equity, justice, and poverty, the future may be brighter quicker than I had imagined.
Way to go Danone! And a serious kudos to Fortune for bringing stories like these to corporate America.