RESOURCES TO HELP

The missing piece in solving the refugee humanitarian crisis is the private sector

One year ago, then-US president Obama hosted a United Nations roundtable on the refugee crisis with US business leaders. He spoke about the vital role companies must play to address the crisis. In the year since, the role of the private sector has only grown more important, as the number of refugees has swelled—22.5 million by the last official count, up by another 1.2 million from the year before. The number is rapidly expanding as many hundreds of thousands of refugees have fled South Sudan and Myanmar in the last couple of months alone, even as some governments, including the US government, have sought to cut refugee admissions and reduce funding to the UN Refugee Agency.

It’s clear that the private sector, especially multinational businesses, have a stake in addressing the refugee crisis. With supply chains that span the globe, the stability of major refugee-hosting countries—from Turkey to Kenya to Bangladesh—is not an esoteric concern. Business leaders also understand that hardening public attitudes to immigrants and refugees often threaten trade and their bottom line (see: Brexit). They also know that their customers and employees increasingly expect businesses to stand for certain values, and that they can enhance their brand by doing so. But, most of all, business leaders have an interest in creating a better world.

Yet amid the exhortations for the private sector to do more, it hasn’t been clear as to just what it is that businesses should be doing—and specifically where multinational businesses have a comparative advantage over traditional actors. The Center for Global Development, in partnership with the Tent Foundation, set out to close this gap—and today we released a report that outlines the best ways CEOs can help right now.

Our first finding: let business be business. There’s no question that the private sector can help by donating money to the organizations that work with refugees (or, in certain circumstances, by donating in-kind goods and services to them). But even a generous financial contribution is more likely to be one-off or occasional, and it delivers much less impact over time than a business decision, say, to source certain items from a refugee-employing enterprise—which can pay significant dividends for refugees indefinitely. Additionally, we don’t think that philanthropic donations from companies can reach the critical scale to make meaningful inroads in addressing the refugee crisis.

Instead, we see the potential for greater and more sustained results when companies seek to leverage their “core business” to engage refugees—when companies treat refugees not as victims, but as economically-productive workers, suppliers, entrepreneurs, and customers. If CEOs leverage their core business functions to support refugees, they can sustainably promote economic opportunities for refugees, grow their own business, and be on the right side of history.

Companies can engage through their core business—advancing their bottom line while lifting up refugees—by creating targets or incentives around hiring refugees as employees, or sourcing from refugee-owned or refugee-employing businesses. For example, the furniture giant IKEA began its efforts to help the refugee community by donating furniture to camps and temporary houses, but it graduated to building a factory in Jordan that will employ refugees to manufacture textiles and other products for IKEA stores everywhere. Starbucks has committed to hiring 10,000 refugees worldwide.

Companies can also generate financial returns through impact investment in refugee-employing businesses, refugee entrepreneurs, or social enterprises. Last year, Soros Fund Management announced that it would invest hundreds of millions of dollars for refugee-related outcomes; later today, Ben & Jerry’s will announce its intention to support refugee entrepreneurs, starting in the UK, and the Italian insurance company, Generali, will announce specific plans next month to back refugee start-ups in Europe.

Finally, companies can also play a role in reaching refugees as customers by tailoring products, services, and delivery systems to this community that is too often ignored or marginalized. For example, Airbnb has leveraged its platform to provide free short term accommodation to refugees, and Mastercard is working on expanding its financial services to refugees. That said, we found that the most critical goods and services for refugees are typically provided by governments, humanitarian actors, or local companies, and are almost always highly regulated—providing fewer opportunities for the typical multinational businesses.

Hence our second finding is that the greatest promise lies in businesses hiring refugees or integrating them into their supply chains. While the private sector can play an important role through impact investing and delivering goods and services to refugees, many—perhaps most—multinational businesses are not set up to play those roles. In contrast, just about every business can make a commitment to hire refugees or integrate them into their supply chains—even if it’s in decisions on how to staff call centers or where to purchase pencils. Every multinational business can make a commitment to bring refugees into the global economy, thereby making refugees an asset, not a burden, to the countries that host them.

The refugee crisis creates new challenges for stability and prosperity around the world. But these challenges are not insurmountable. Government assistance and private donations are important pieces of the puzzle—but a strong response from business leaders to the refugee crisis is absolutely critical. Delivering results will not be easy, and businesses will need to work with host governments, development and humanitarian actors, and organizations like the Tent Foundation, which is focused on mobilizing businesses to give refugees the opportunities they and their families so richly deserve. Not only is such leadership good for business, it will also help solve the greatest humanitarian crisis of our lifetimes.

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