Saving the world with a cup of yogurt (cont.)
And, Riboud adds, they can see social benefits, something he 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."
Ideas along these lines are being discussed within corporations such as GE (Charts), Unilever, Coca-Cola (Charts), PepsiCo (Charts) and Cargill, says Marc Van Ameringen, executive director of the Global Alliance for Improved Nutrition in Geneva.
"The new wave in business is, forget corporate social responsibility and philanthropy - how do you integrate this into your core business?" he says. "The idea Danone has of creating a social dividend for shareholders - that's cutting-edge. No one else has come up with this interesting a model. It supports your brand, returns your capital, you're not going to lose money and you give your shareholders a vision of doing something good."
Adds Antoine Hyafil, dean of faculty at the HEC School of Management in Paris, where the MBA program in sustainable development includes studies in social business enterprise: "This is the kind of thing that can change the mentality within business. Even if it replaces corporate giving, money given for philanthropy is often misused." Rethinking the divide between profit motive and social good, Hyafil says, is an emerging trend for business, and Yunus is at the forefront of the movement.
Yunus says business schools should start turning out social-business MBAs trained in creating social returns: "People say, 'Don't be stupid.' I say there are a lot of stupid people like me. I don't want to make money. Lots of young people don't want to make money, because their mother, their father made so much money. They don't know what to do with their lives. There are many such kids in the U.S. They don't have any challenge left. Give them the challenge: Fix the world. Create a social business enterprise."
On a peaceful Friday morning in November, during a lull between strikes and riots that have brought Dhaka to a standstill in advance of parliamentary elections, Yunus pays a visit to the village of Basta, a half-hour drive from the capital. He has come to check on Grameen Bank's microlending programs.
In a country like Bangladesh, paralyzed by strikes and inept governance, it's obvious why Yunus sees business rather than the state as the way to solve social problems. Without Grameen and other nonprofits, the situation in Bangladesh would be far worse.
While half the country still lives below the poverty line, Grameen says that 5 percent of its borrowers escape poverty every year, helping to double the country's annual poverty-reduction rate from 1 percent to almost 2 percent since the beginning of the decade.
Yunus had to work hard to convince mullahs in the majority Muslim country that the Prophet Muhammad would have supported the idea of lending primarily to women. The idea of economically empowering women was a radical one, and Grameen branches in Bangladesh became the targets of occasional bomb blasts by Islamic fundamentalist groups.
Yet it's the criticism from both left and right intellectuals that has hurt the microcredit movement most over the years. "They don't throw grenades and firepower, but they throw intellectual grenades all the time, so it's no less harmful," Yunus says. "The grenades coming from the mullahs attack only one branch, but the grenades that the intellectuals and academics throw at us hit the whole system."
Among the more frequent criticisms leveled at Grameen by these critics is that microlending is too small to make a difference - that it's making poverty more tolerable rather than eliminating it. But after starting out granting small loans of $10 to $20, Grameen now allows members with solid repayment histories to up the ante and borrow as much as $18,000.
Ravia Khatun, a wizened woman dressed in black who gives her age as around 60, says she graduated from buying cows with her Grameen loan to buying a $6,000 Toyota pickup truck, which her sons use to ferry passengers and produce to the local market in Basta.