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(originally published by Booz & Company)


How Multinationals Should Fight the War on HIV/AIDS

Companies must join the fight against the spread of HIV/AIDS not just because it is socially responsible, but because their businesses are at risk.

HIV/AIDS is a human tragedy unparalleled in the sheer scope of the physical and emotional pain it inflicts on sufferers and on those who take care of them. The disease is also a global crisis that weighs heavily on corporations and governments worldwide — and it is getting worse. While HIV/AIDS epidemics in poor countries (many of them in Africa) are well known, the danger of HIV/AIDS spreading at the same speed through poverty-stricken and health-care–challenged places such as China, Russia, or India is looming. Fearing the effects this would have on sales, labor resources, and suppliers in these emerging economies, more multinationals are engaging in local efforts to fight HIV/AIDS in countries where they operate, not just because it is socially responsible, but because their businesses are at risk.

In March 2004, the Global Business Coalition on HIV/AIDS and the U.S. Department of Commerce sponsored a forum on leveraging the power of industry to fight HIV/AIDS. In preparation for that forum, Booz Allen Hamilton conducted interviews with key members of the international business community to gain a deeper understanding of current corporate HIV/AIDS initiatives, and to identify the best practices of multinational corporations in the fight against HIV/AIDS. A prime finding was that company efforts worldwide to conquer HIV/AIDS can have an even greater impact when organizations apply their core capabilities to the problem locally — in essence, using their leadership, expertise, and resources to address specific community needs in the countries where they operate.

It’s no surprise that pharmaceutical companies, whose entire business is linked to curing and preventing disease, have been among the most active in using their competencies to combat HIV/AIDS, offering research expertise, clinical training, and critical health-care products. But increasingly, corporations from an array of non-health-related sectors are more aware of how HIV/AIDS can affect their businesses, and they are bringing their own capabilities to bear on the problem.

For instance, the media and entertainment industry is uniquely positioned to harness media access, messaging, programming, networking, and use of celebrities to deliver local HIV/AIDS awareness and education programs. And they’re finding creative ways to get the message out. For example, Black Entertainment Television sends street teams to U.S. urban areas to educate youth about safe sex practices and the importance of getting tested for HIV. MTV administers sexual behavior polls to its employees to better analyze and understand HIV risk among certain age groups. Such practices could easily be adapted for other countries and cultures.

For manufacturers with operations or large work forces in regions affected by HIV/AIDS, the disease is directly linked to reduced productivity, high absenteeism, and increased demand for workers to replace stricken colleagues. In a 2003 study of the economic impact of HIV/AIDS in South Africa, conducted by the South Africa Bureau for Economic Research and the South African Business Coalition on HIV/AIDS, more than half of the manufacturers surveyed said the disease had led to lower labor productivity or increased absenteeism. Forty percent of manufacturers reported that HIV/AIDS had reduced their profits.

Manufacturers are highly integrated into the economic and social fabric of the communities where their plants are located. As a result, we found that they are well positioned to piggyback on existing in-country relationships and networks to provide health-care services and comprehensive prevention, testing, and treatment programs. In India, Tata Steel is utilizing its existing infrastructure of medical programs to mobilize resources to fight the pandemic. Tata Steel also developed a “Safe Highway” project to establish HIV/AIDS clinics targeted at truck drivers.

In our interviews, executives from consumer goods companies consistently stressed the long-term implications of HIV/AIDS on their global performance. These executives expressed fears that HIV/AIDS could reduce future product sales in emerging economies they have targeted for growth if the pandemic significantly erodes purchasing power in those locations. They also noted the mounting negative impact of HIV/AIDS on worker productivity among local supplier partners, as well as among in-country sales agents and workers in retail shops.

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