Accreditation for targeting the right firms
The purpose of IB/IGB-accreditation is to establish ownership for a transparent identification of companies with IB/IGB business lines, so that the companies get branding and recognition, and incentives can be targeted to the right firms.
An accreditation system was developed for Ghana and similar approaches are already implemented in other countries in Africa and Asia. IB/IGB accreditation is tool to identify such firms, rate them against 48 criteria and 184 benchmarks, and thus transparently qualify which business line is IB/IGB and which not. The accreditation tool is simple to implement and can be used across sectors and across company sizes. It basically determines the company’s attribution to social or environmental change in a society. The accreditation will be given on the respective IB and IGB business line and need to be renewed all 3 years. It will be done annually and on a consensus decision.
4 levels of criteria are used to accredit an IB or IGB firms. These comprise:
- The strategic intent of the company (betterment for BoP people or for the environment/climate footprint). The strategic intent rating is a separate analysis.
- The commercial viability of the company (with criteria on revenue, growth, profitability, bankability, addressing business risks, social and environmental safeguard adherence and corporate governance quality). The commercial viability comprises 41% of the total scoring.
- (c) for IB the social impact (in terms of reach, targeting, women empowerment, social depth, systemic social change contribution), and for IGB the environmental impact (in terms of addressing pollution and circular economy issues, addressing natural resources management addressing the climate footprint, the sustainability of the environmental intervention, how the company makes money with the environmental features, and what the impact of the environmental features is on the BoP) The social or environmental impact rating comprises 45% of the total scoring.
- The innovations the company introduced to achieve those results (in terms of business innovations, technology innovations, social innovations, environmental innovations , gender equality, and strategic CSR use). The innovation impact rating comprises 14% of the total scoring.
The analysis is done through a composite rating tool, quantifying the company’s impact against weighted criteria (48) and their benchmarks (186) for small-medium-high impact (in numeric terms 0-6. In 0.5 counting steps). The composite rating is done under a team and consensus approach. Companies with a scoring above certain eligibility thresholds would qualify as IB/IGB, those just below as potential IB/IGB and those far below as mainstream or green business. To allow more GB to qualify as IGB, the environmental impact eligibility thresholds are slightly lower than the social impact ratios for IB. A summary of the proposed IB/IGB rating tool is in the chart below
The official IB/IGB accreditation is done by a committee comprised of 4 representatives each from government (MoTI, GEA, MESTI, MoFA) and business associations (AGI, GCYE, CAG, SEGh). The consensus decision of the committee is binding. Official accreditation should be done 1-2 times a year and estimated 20-30 companies will be accredited in every exercise.
Impact assessment and awarding would cost about USD 50,000-USD 70,000 per year. This is mainly for analytical background work, company interviews , and initial ratings done through consultants. For more information on the accreditation system please see this paper.
Eligible for investment incentives: Accredited company will be awarded by the business associations. Accreditation will not only give branding and recognition to the companies, it will also trigger business coaching , investment and financial incentives under the IB/IGB support program.
The first accreditation round (for 2024) proposed 15 companies as IB/IGB . They had in 2023 a consolidated revenue of GhC 988 million and a consolidated reach of 1.9 million poor and low-income people. The 15 companies have a strong growth projection for both revenue and reach through 2030. Imagine, if only 15 companies can achieve so much, how transformative the IB/IGB initiative can be for social inclusion and the economy in Ghana when it is upscaled
Projecting achievements through 2030 in an up-scaling scenario: It is assumed that 20-30 firms being confirmed by the IB/IGB accreditation committee in each round, resulting in up to 300 firms by 2030 that would perhaps qualify as IB/IGB in the coming 5-7 years. These assumed 300 firms (by 2030) may then have by 2030 a total social reach of minimum 3.8 million BoP people (11.3% of total Ghanaian population and 24 % of total BoP) and a revenue of GHS 7.5 billion GHS (0.6 billion USD). Note that different to a typical development project, revenue and reach of a private sector implemented change repeats every year and does not achieve only once in the lifetime
