Making a profit while meeting poor's needs

Lin Yanqin, Today Online 24 Apr 08;

The emerging economies of the world are demanding more energy to meet their growing needs and even the poorest in these still-developing countries are also beginning to require energy to enjoy a better standard of living.

All this adds up to a tremendous strain on the world's limited energy resources.

"When six billion people start asking for energy that one billion people are using ... we have to find ways that satisfy people's need for energy in a different kind of way," said Dr Ashok Khosla, the chairman of the Delhi-based Development Alternatives Group.

Yet, even though such services can be provided in an economically viable way, many businesses are reluctant to enter the market because the profit margins are considered too low. "Their idea of profits is different," Dr Khosla said.

"We make profits of seven to eight per cent, but that's unacceptable to people used to a 30 to 50 per cent profit margin."

Speaking at the Business for Environment Global Summit yesterday, Dr Khosla said that his company — by selling small-scale renewable energy technology to local entrepreneurs in remote regions — is proof that profitability can exist alongside sustainable development.

But with an energy shortage a key concern for many developed countries, the needs of the very poor are often forgotten, said Dr Khosla, a former director of the United Nations Environment Programme.

"It will need a real mindset change of how business is done — it's not just about shareholders' profits. It's about the needs of consumers and the environment," he said.