Workers in Asian factories are rarely the subject of good news. Unitus Impact is trying to change that with investments that go the source of most of the controversy: corporate supply chains.
The impact venture capital firm’s Livelihood Impact Fund made two investments in companies that leverage the supplier networks of multinational companies to improve the lives of factory workers in Asia. Unitus Impact, based in San Francisco, didn’t disclose the amount of the investments into MobiVi in Vietnam and Micro Benefits in China.
MobiVi provides low-cost financial products and services to garment and electronics workers. Through corporate partnerships, it helps workers access lines of credit and low-cost loans, using their employment status as a qualifier.
Micro Benefits in China works with companies to improve employee benefits schemes and skills training for workers. It markets its benefits to both sides: upward mobility for workers and reduced employee turnover for corporate clients.
Beau Seil, managing partner of Unitus Impact, described the two companies as “visionary entrepreneurs, working to set a new benchmark for the treatment of lowincome factory workers in Asia.”
Corporate supply chains haven’t gotten a lot of attention from impact investors. Unitus Impact has identified an investment opportunity in social enterprises linked into these networks, and the potential for enormous impact. Vietnam has an estimated 10 million factory workers and China more than 150 million. Many of these are internal migrants who move to cities looking for work without registering or carrying formal IDs, which puts most state and private sector services out of reach.
Multinational companies have tremendous reach and resources in poor and emerging markets. Many may become increasingly willing partners in efforts to improve the livelihoods of their workers. A 2013 study by Stanford Business School found that companies recognized economic incentives to improve environmental and social supply chain practices, including lower legal costs and production disruptions.
Forward-thinking corporations recognize that environmental and social responsibility is good business, not just good PR. Impact investors couldn’t say it better themselves.
This post was originally published on ImpactAlpha.com
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