Background and IB/IGB Accreditation?
The “Promoting a better enabling environment for Green and Inclusive Business in Ghana” (the GIBee) is a landscape study financed by the German Agency for International Cooperation (GIZ) through the Private and Financial Sector (PFS) programme and implemented in cooperation with the Ghana Enterprise Agency (GEA). The project is being implemented by CDC Consult Limited in collaboration with Dr Armin Bauer, an International Consultant, and Inclusive Business expert. An Inclusive Business (IB) and Inclusive and Green Business (IGB) accreditation system is to be established and operationalised in Ghana as part of the project. Accreditation in the context of IB/IGB businesses typically involves a formal recognition or certification by a recognised authority, organisation, or regulatory body that verifies that the business meets specific standards, criteria, or qualifications as an Inclusive business or Inclusive and Green Business (IGB).
While the approach for assessing IB is well established in many countries and has been used in many IB landscape studies[1], the concept of Green Business (GB) and the way to identify such business lines is rather murky. To transparently identify companies with IB and IGB business lines and achieve a consensus for properly targeting support programmes to such businesses, many countries world-wide have established an IB/IGB accreditation and award system.
Inclusive Business (IB) accreditation is done on the business line level, based on third-party independent business assessment and analysis from background reading and interviews. It is implemented jointly by representatives’ form government and business associations. The results are publicly announced through official awards. While the information and data from the business interviews is confidential, a summary report on the IB/IGB eligibility is published, as consented by the participating businesses. IB accreditation is normally given for 3 years and can be renewed after further assessment.
The accreditation itself is based on a composite rating tool measuring the results of a company against 47 criteria and more 195 benchmarks. These assess 1) the strategic intent of the firm, 2) the commercial viability (revenue size, growth, profitability, bankability, addressing business risks, environmental and social safeguard standards, corporate governance), 3) the social (reach, depth, systemic change) and environmental impact (pollution, natural resource management, climate footprint, environmental business case, BoP impact, sustainability for Ghana society) and the innovations (technology, business, social, environmental) to address risks.
The system is constructed in a way that companies of any size and any sector can be compared with each other.
What is the purpose and objective of IB/IGB Accreditation?
Setting up the IB/IGB accreditation system for Ghana can serve several objectives including:
- Fostering an environment where businesses actively engage and integrate BoP into their value chains as suppliers, distributors, employees, or consumers.
- Recognising and incentivising businesses that adopt environmentally sustainable practices, such as reducing carbon emissions, minimising waste, and using eco-friendly materials in their operations.
- Establishing standards to verify that businesses adhere to ethical practices, including fair wages, safe working conditions, and responsible sourcing of materials.
- Encouraging businesses to innovate and adopt sustainable and inclusive business models.
- Allowing accredited businesses to distinguish themselves in the market, gaining a competitive advantage by highlighting their commitment to inclusivity and sustainability.
- Educating consumers about the impact of their purchasing decisions and empowering them to make choices that align with their values by supporting businesses with IB and IGB accreditation.
- Creating a mechanism for investors to identify and support businesses that prioritise inclusivity and environmental responsibility.
- Establishing a framework for businesses to continuously assess and improve their performance in terms of inclusivity and sustainability.
- Aligning with or complementing existing government regulations and policies related to social and environmental responsibility, fostering a culture of compliance and responsible business conduct.
Establishing Ghana’s IB/IGB Accreditation System
Establishing Inclusive Business (IB) and Inclusive and Green Business (IGB) accreditation will involve a structured process as follows:
- Engagement with stakeholders: This will involve the identifying key stakeholders such as the government through relevant ministries, departments, and agencies (MDAs), businesses from the private sector, industry, and business associations as well as regulatory bodies Stakeholders’ input will gathered to help shape the accreditation standards and gaining widespread support.
- Conduct of landscape study: This involves the conduct of Ghanaian business landscape, environmental challenges, and social issues. This will provide insights into the Ghanaian context and the extent to which IB/IGB businesses or potential exist and performing. It will also provide industry and sectorial perspective of IB/IGB businesses in the country. This analysis will help tailor accreditation standards to the specific context of the region.
- Develop accreditation standards and criteria: Establish clear and comprehensive standards and criteria for both IB and IGB accreditation. The accreditation itself is based on a composite rating tool measuring the results of a company against 47 criteria and more 195 benchmarks. These assess 1) the strategic intent of the firm, 2) the commercial viability (revenue size, growth, profitability, bankability, addressing business risks, environmental and social safeguard standards, corporate governance), 3) the social (reach, depth, systemic change) and environmental impact (pollution, natural resource management, climate footprint, environmental business case, BoP impact, sustainability for Ghana society) and the innovations (technology, business, social, environmental) to address risks.
- Define assessment methodology: This involves outlining the assessment methodology, including the procedures for evaluating businesses against the accreditation standards. IB accreditation will be done on the business line level, based on third-party independent business analysis from desk research and interviews. It will be implemented jointly by representatives from government and business and trade associations. The results shall be publicly announced through official awards. While the information and data from the business interviews is confidential, a summary report on the IB/IGB eligibility will be published with the consent by the participating businesses. The IB accreditation shall be given for 3 years and can be renewed after further assessment.
- Pilot programme: To ensure the Ghanaian context is reflected in the accreditation system, the project will pilot the accreditation system to test the accreditation standards and assessment procedures. This will allow for refinement based on practical feedback from businesses and stakeholders. The pilot will cover at least thirty-five potential IB/IGB businesses out of which twenty of them will receive coaching, mentoring, and training support in readiness of the first accreditation.
- Establish Accreditation Body: This stage will involve creating or designate an accreditation body responsible for overseeing the accreditation process. This body shall be impartial, technically competent, and have the necessary expertise to evaluate businesses according to the established standards. The Ghana Enterprises Agency (GEA) shall be the focal governmental institution in collaboration with trade and business associations to implement the accreditation system.
- Training and capacity building: This involves the provision of Training of trainers (ToT) coaching and mentoring programmes to IB/IGB champions, assessors, businesses and business associations and other stakeholders involved in the accreditation process.
- Launch accreditation programme: This will involve official launch of the IB/IGB accreditation programme. GEA as the implementing body will lead the promotion of the programme to raise awareness among businesses, investors, consumers, and other stakeholders. There will be clear communication strategies with clear guidelines on how businesses can apply for accreditation.
- Accreditation Application and Assessment: Businesses interested in accreditation should submit applications, and the accreditation body should conduct assessments based on the established criteria. This may involve on-site visits, document reviews, and interviews with key personnel. The accreditation decisions, ongoing monitoring, promotion and recognition of accredited businesses, feedback and continuous improvement and advocacy function will be led by the accreditation body.
How businesses can benefit from IB/IGB Accreditation
Businesses can derive numerous benefits from obtaining Inclusive Business (IB) and Inclusive and Green Business (IGB) accreditation. These include:
- IB and IGB accreditation can enhance a business’s reputation by signalling a commitment to inclusivity, social responsibility, and environmental sustainability. This positive image can lead to increased brand value and customer loyalty.
- Accreditation sets a business apart from competitors by highlighting its commitment to inclusive and green practices. This differentiation can attract conscious consumers who prioritise supporting socially and environmentally responsible businesses.
- Accreditation can open doors to new markets and business opportunities, especially in industries where consumers and partners prioritise sustainability and ethical considerations.
- Accredited businesses may be more attractive to top talent who seek employers with a strong commitment to social and environmental values. This can help in recruiting and retaining skilled and dedicated employees.
- Accreditation helps businesses identify and address potential risks related to social and environmental issues. Proactively managing these risks can lead to long-term stability and resilience.
- Implementing sustainable practices often leads to increased efficiency and cost savings. For example, reducing energy consumption, waste, and raw material usage can have positive financial implications.
- Accreditation can make businesses more attractive to socially responsible investors and financial institutions that prioritise sustainable and ethical practices resulting in increased access to funding and investment opportunities.
- Accreditation ensures that a business aligns with or exceeds regulatory requirements related to social responsibility and environmental sustainability. This reduces the risk of non-compliance and associated legal issues.
- Accreditation builds trust with various stakeholders, including customers, suppliers, investors, and the local community. Engaging with stakeholders on these issues can lead to stronger relationships and partnerships.
- Pursuing accreditation encourages businesses to innovate and adapt their operations to be more sustainable and inclusive. This adaptability can position them for long-term success in a changing business landscape.
How Ghana can benefit from IB/IGB Accreditation
Ghana can derive several significant benefits from promoting and implementing Inclusive Business (IB) and Inclusive and Green Business (IGB) accreditation within its business landscape. The potential benefits to country may include:
- IB practices can create economic opportunities by integrating low-income or marginalised communities into the value chain which can lead to job creation, income generation, and overall economic growth.
- IB and IGB accreditation can improve the global competitiveness of Ghanaian businesses by aligning them with international standards for social and environmental responsibility which can attract foreign investments and foster international partnerships.
- Accredited businesses in Ghana can gain access to international markets that prioritise socially and environmentally responsible products and services which can open new avenues for export and trade.
- IB initiatives can contribute to poverty alleviation by providing employment opportunities, particularly in rural areas by Integrating smallholder farmers and local communities into the value chain can have a direct impact on their livelihoods.
- IGB practices can help protect Ghana’s natural resources by encouraging sustainable practices in industries such as forestry and fisheries. This contributes to biodiversity conservation and mitigates environmental degradation.
- IGB practices can help Ghana adapt to and mitigate the impacts of climate change including measures like sustainable land use, reforestation, and the adoption of renewable energy sources.
- IB and IGB accreditation can align with and support the government’s sustainable development goals and policies. This collaboration can create a synergistic effect, driving progress toward shared economic and environmental objectives.
- IGB practices can enhance the appeal of Ghana as a tourist destination by promoting responsible tourism and eco-friendly practices that can attract environmentally conscious travellers and boost the Ghanaian tourism industry.
[1] Similar IB landscape studies were done in Bangladesh, Cambodia, China, Ghana (ongoing), India, Indonesia, Kenya, Malaysia, the Mekong countries, Myanmar, Nigeria, Pakistan, Philippines, Sri Lanka, Tajikistan, Viet Nam (2x) and Zambia, as well as for ASEAN and APEC. IB support strategies were suggested or implemented in Cambodia, China / Shanxi province, Malaysia, Myanmar, Nigeria, Viet Nam and Zambia, as well as for ASEAN.