When then US Secretary of State, Hillary Clinton, announced the launch of the Global Alliance for Clean Cookstoves (the Alliance) in 2010, she supported an audacious goal—100 million households adopting clean cookstoves and fuels by 2020. Bringing together leaders from government, civil society, and the private sector, the Alliance aimed to harness the power of markets to build a robust and thriving industry that could help alleviate poverty and enhance sustainable development. The question then, and now, is what do organizations like the Alliance need to do to make this vision a reality?
Development organizations, foundations, nonprofits, and governments have invested in a variety of programs to unlock the transformative power of business to help tackle some of society’s greatest challenges. From encouraging policy reforms and launching incubators that nurture enterprise growth, to leading awareness and behavior change campaigns that drive consumer demand, these programs have been stepping stones to building industries that generate sustainable and scalable impact—what we call “impact industries.”
An impact industry is a special kind of industry. While an industry is defined as a group of businesses related in terms of their core business activities that provide products or services that are close substitutes for one another, an impact industry offers the opportunity to build profitable businesses that create substantial social or environmental impacts.
Despite their potential, efforts to develop impact industries generally remain fragmented, operating independently of one another and lacking an integrated vision. This results in insufficient investment in the industry, lack of coordination among key players, markets with limited prospects for profitability, and enterprises that struggle to scale their impact. Accelerating impact industries can be particularly challenging when the target market is the base of the pyramid (BoP)—the approximately 4.5 billion poorest people on the planet.
Recognizing these limitations, a new type of organization has emerged in the last few years, which we refer to as an “impact industry accelerator” (IIA). These include the Alliance, along with other organizations such as Family Planning 2020 and the Global Off-Grid Lighting Association.
IIAs are tasked with building a thriving impact industry populated by enterprises that are sustainable at scale. Our definition of an impact industry accelerator compliments and extends work done on the concept of an industry facilitator. Industry facilitators have a narrower mandate than IIAs and are viewed as focusing on a group of businesses using a similar business model and operating in a specific country or part thereof. As IIAs are asked to catalyze an entire impact industry’s development, they must engage a wide variety of stakeholders beyond business to address the multitude of activities, both at the global and local level, required to accelerate multiple business models in multiple markets across the developing world.
Global Alliance for Clean Cookstoves
Almost three billion people, nearly all of whom are part of the BoP, depend on open fires or the use of biomass (such as charcoal and dung) in inefficient cookstoves to cook their food. While these methods may be inexpensive, or in many cases free, they come with many hidden costs to individuals and their environment. Household air pollution and particulate matter resulting from the inefficient combustion of solid fuels contribute to a multitude of health issues, including pneumonia and heart disease, with disproportionate impacts on women and young girls who do most of the cooking.
Women and girls are also largely responsible for collecting fuel, which puts them at greater risk of violence when traveling outside of the home, and also means that girls have less time for school and women have less time for other activities. There are environmental impacts as well. Fuel collection often degrades land and can destroy habitats. Combustion of these fuels releases carbon dioxide and other greenhouse gases, which contribute to climate change. The widespread adoption of cleaner cookstove technologies that burn biomass fuels more efficiently, or that burn cleaner fuels such as liquefied petroleum gas, can eliminate many of these negative outcomes.
Globally, the Alliance facilitates research focused on better understanding the link between reduced use of traditional cookstoves and changes in health, climate, environment, and gender equality outcomes. It uses these data to advocate for greater investment in clean cooking solutions by public and private sector partners. To ensure these impacts are achieved, the Alliance has established global standards for clean cookstoves and develops approaches and materials to educate and change consumer behavior to maximize the impact of clean cooking technologies.
At the national level, the Alliance has market managers in eight countries (Bangladesh, China, Ghana, Guatemala, India, Kenya, Nigeria, and Uganda) who coordinate on-the-ground activities and develop the local partnership ecosystem. Within each country, the Alliance works with private sector manufacturers and distributors of cookstoves and fuels, local and international non-governmental organizations, national government ministries, and in some cases, local and regional associations, to develop and execute “country action plans” (CAPs). These CAPs are designed to coordinate and accelerate the local clean cookstove and fuels industry.
An important part of what the Alliance does is to raise and manage funds from bilateral and multilateral organizations, corporations, foundations, civil society organizations, and individuals. Staff at headquarters in Washington, D.C., work with in-country managers to design and implement targeted programs including those that support greater innovation and experimentation, provide working capital support for enterprises, and fund investments in institutional capacity building.
In 2015, five years after its launch, the Alliance reported the distribution of 53 million clean or efficient cookstoves and fuels, more than half way to its goal of 100 million households by 2020. To achieve this milestone the Alliance has had to simultaneously address the many barriers that impede the purchase and use of clean cookstoves and fuels.
Four Stages of Industry Acceleration
The findings in this article are based on a research study the authors conducted with the Alliance to identify lessons learned from its activities thus far, including a review of secondary literature, and interviews with the Alliance and its partners in Washington, D.C., Kenya, and Bangladesh. Our research found that accelerating the clean cookstove industry targeting the BoP involved four different, yet interconnected, stages of acceleration. Each of the four stages (see “Four acceleration strategies for the clean cookstove industry” below) emphasized a specific acceleration strategy—investment, collective action, profitability, and impact—and all four were critical in the development of this impact industry.
For the sake of clarity, the discussion that follows presents each stage in linear progression. In the real world, the four acceleration strategies are interconnected and mutually reinforcing, and don’t occur in linear fashion. Indeed, our findings show that the Alliance did not proceed in a step-wise fashion, completing one stage at a time. Rather it simultaneously prioritized and choreographed key next steps across all four stages. The process was also iterative, as the Alliance shifted emphasis and investment in response to evolving and varying circumstances in the global environment as well as individual local contexts.
1. Accelerate Investment: Before the Alliance could do anything meaningful, both financial and non-financial resources were needed. While initially these resources came from various players in the development sector, the source of this investment has changed over time to include some private sector support. These investments were generally funneled through the Alliance but could also be provided directly to other organizations collaborating in industry acceleration efforts. Success in this stage of acceleration can be measured by the level of resources mobilized for the impact industry.
We identified three critical activities implemented by the Alliance to secure investors. First, the organization created a wide investment proposition that enabled it to mobilize resources from a range of potential investors. Rarely does the development community want to build companies or create industries. They want to solve societal problems. They may, however, be interested in accelerating an impact industry and the enterprises within it, if they see it as an effective means of contributing to their social impact goals.
Second, before potential supporters made financial commitments, they needed an implementing platform (the Alliance) in which they were comfortable investing and confident the resources would be deployed as intended. This organization must not only ensure that investments are appropriately channeled, with effective sequencing and prioritization of activities, but also have the flexibility to evolve with the industry and ensure that appropriate resources are mobilized for a journey that could last more than a decade.
Third, the Alliance had to convert interest in the issue and confidence in the organizational structure into commitments of financial and non-financial support. This required engaging a range of potential supporters, both globally and in-country, to ensure a consistent and continuing flow of funding, and to attract non-financial resources such as access to data, systems and tools, and intellectual capital.
It was the development of a wide investment proposition that led to the formation of the Alliance itself. In 2009, the US Environmental Protection Agency (EPA) sought to expand an existing program, The Partnership for Clean Indoor Air, beyond what it could do within its agency mandate. In doing so, the EPA’s administrator at the time, Lisa Jackson, and her team began to articulate to a variety of potential partners, including the US Department of State under Secretary Clinton, how clean cooking could generate not only environmental benefits, but also result in substantial positive impacts in health, gender equality, and affordable energy.
While accelerating the clean cookstove manufacturing industry was not a priority for most of these potential partners, the Alliance model was considered a new and powerful way to achieve their specific objectives. With the adoption of the Sustainable Development Goals (SDGs) in 2015, this wide value proposition became attractive to a variety of potential donors that linked the growth of the industry to achieving one or more of the SDGs. These same value propositions were effective in facilitating the formation of cross-ministerial committees in Kenya and Bangladesh that include government units responsible for health, energy, environment, and agriculture, among others.
In the early stages of the Alliance’s formation, those championing this effort approached the United Nations Foundation (UNF) to act as a host organization for the Alliance. They viewed UNF as an organization that could provide a governance structure and the reputational capital to facilitate investment from the public and private sectors, and from multiple countries, as well as effectively prioritize, sequence, and channel those investments. Once established within UNF, the Alliance continued to evolve its structure and strategy as the industry evolved, from an organization that was predominantly focused on global issues to one that is increasingly focused on country-level issues.
In Kenya, for example, the Alliance played a key role in the formation of the Clean Cookstove Association of Kenya (CCAK), which created local ownership, governance structures, and reputational capital. The CCAK is a professional membership association that aims to increase the use of clean cooking and fuels through policy advocacy, increasing awareness, and building the capacity of local enterprises.
The Alliance benefitted from the Secretary Clinton’s championing of the issue of clean cooking, and its launch at the Clinton Global Initiative helped facilitate support from the World Health Organization, the EPA, Royal Dutch Shell, and the UNF, among others. Since its formation, the Alliance has continued to find ways to attract champions who have been invaluable in ensuring commitments are made and honored. These individuals include those who can leverage political capital within specific organizations, as well as individual ambassadors who raise the profile of clean cooking, such as actress Julia Roberts and chef José Andrés.
2. Accelerate Collective Action: While creating a wide investment proposition in the accelerating investment stage supported a variety of stakeholders investing in the clean cooking industry, it also presented the challenge of responding to a diverse set of interests and motivations. Potential partners want order, but they do not want to be ordered. As such, the Alliance had to build industry legitimacy in order to facilitate collective action. Success in this stage of acceleration can be measured by the perceived legitimacy of the impact industry
Our research identified three activities that were central to the Alliance’s efforts to accelerate collective action. First, it sought to establish a common vision and goals for the clean cooking industry at the global and local levels. Given the mixed success of the development community’s prior efforts to promote clean cookstoves, the Alliance needed to create confidence in the direction in which the industry was moving and facilitate collective action among all of its stakeholders.
Second, we found that continued engagement and future investment by partners generally hinged on the Alliance building a solid foundation of empirical support for the relationships between the use of clean cookstoves and fuels, and specific social impacts. The existence and strength of this social value proposition proved invaluable in articulating the magnitude and urgency of the problem, crafting more effective solutions, and demonstrating progress towards the desired outcomes.
Third, the Alliance undertook efforts to ensure quality and consistency. Delivering on a shared vision, including achieving the expected social impacts, requires confidence in the manufacturing and use of the products. Given the wide range of product offerings, the Alliance needed to address information asymmetries across the value chain and build confidence in the consistency and quality of products being offered within and across markets.
To establish a common vision and goals for the industry, the Alliance had to engage and align a diverse set of stakeholders and advocate for the sector to become a priority for these stakeholders’ resources. This required co-creating a global strategy as well as individual CAPs in its eight focus countries. The global strategy was built with inputs from 350 key stakeholders and 11 working groups. The local CAPs were developed and owned by local institutions in each country, either a local association, local government ministries, or other stakeholders.
The process of creating these CAPs helped to lay the foundation for collective prioritization and action. In Bangladesh, for example, the CAP process resulted in the formation of the Household Energy Platform with support from the Power Division within the Ministry of Power, Energy and Mineral Resources, which coordinates stakeholders and resources across the cookstove industry.
Maintaining commitment and momentum required the Alliance to demonstrate that the clean cooking industry was achieving the social impacts its partners desired. The Alliance found, for example, that while household air pollution was a problem recognized by the development community, evidence that clean cooking would provide demonstrated benefits for health was more limited. It therefore commissioned research to better understand the potential impact that lower emission biomass cookstoves and cleaner fuels could have on child survival, as well as research demonstrating how key indicators of cardiopulmonary health (like blood pressure and lung function) could change with the adoption of clean cooking. This information was also disseminated more broadly to create greater awareness and empower advocates within the clean cooking industry.
These results, however, were only meaningful if product quality and consistency could be ensured across several key dimensions. To do this, the Alliance invested in developing global standards. Working through the International Standards Organization process, a team of experts developed a tiered system that characterizes differences in efficiency, emissions, safety, and durability. These standards were developed to facilitate comparisons across similar products by providing a consistent approach for testing, characterizing and reporting performance, and labeling that provided a way to share this information to consumers.
Leveraging global efforts to create standards helped ensure harmonization across markets. Variations in local context, such as the availability and quality of different fuel types, could then be addressed by adapting the standards to these local realities, and communicating these standards through labels that are appropriate for the local market. For example, both Kenya and Bangladesh are engaged in efforts to develop local standards, testing approaches, and labeling regulations for cookstoves.
3. Accelerate Profitability: The Alliance’s market building activities were not directed at a specific enterprise. Rather they were targeted at building the market environment that surrounds these companies, so that all the enterprises in a market were better positioned to become profitable. Success in this stage can be measured by the establishment of durable and robust markets for clean cookstoves and fuels.
In our research we identified three core activities in the Alliance’s efforts to build profitable markets for clean cookstove enterprises. First, the Alliance explored opportunities to enhance the enabling environment by addressing the laws, regulations, and policies that influence business activities in the industry. These included cumbersome or inadequate rules that made it prohibitively expensive or time-consuming to do business, burdensome import duties and restrictions, and weak or non-existent institutional infrastructure that limited access to capital or otherwise prevented the market from operating efficiently.
Second, the Alliance invested in energizing demand for clean cooking products and services through awareness raising and behavior change. Need is not the same as demand, and in many markets there was low awareness of the benefits of clean cooking, which was a barrier to purchase.
Third, the Alliance saw an opportunity to reduce producer costs by facilitating bulk purchasing that allows for collective negotiation with suppliers. This improves the companies’ bottom lines and their ability to extend their product offerings further down the economic pyramid.
To address legal and institutional gaps, and to facilitate advocacy for market-building activities, the Alliance has supported the formation of local institutions in its focus countries. These may be business membership organizations like the CCAK in Kenya, or inter-ministerial bodies like the Household Energy Platform in Bangladesh. These organizations can take up issues that would be challenging for any one actor to address alone. In Kenya, the CCAK, with support and guidance from the Alliance, successfully advocated for the removal of a value added tax for both imported cookstoves and the raw materials required to manufacture cookstoves and facilitated the development of local testing centers to assess the quality of stoves.
Enhancing demand is a key pillar of the Alliance’s in-country efforts to increase the adoption of clean cooking solutions. The Alliance has piloted awareness campaigns along with behavior change communications programs to increase understanding of the dangers of indoor air pollution. This type of investment is a common good that few, if any, individual companies can or would want to make.
For example, in Bangladesh the Alliance has supported a campaign that used mass media, street theater, and fairs to raise awareness of clean cookstoves, which reached almost 50,000 people.
In some countries, the Alliance is working with financial institutions to increase access to consumer financing to enable customers to pay for clean cooking solutions on an installment basis. It has also created targeted subsidy programs in partnership with the United Nations High Commissioner for Refugees to make cookstoves available to displaced populations. In Kenya, the CCAK is also engaging the government of Kenya to understand the opportunities for institutional purchases of clean cookstoves that would provide producers with predictable, high-volume demand.
4. Accelerate Impact: The Alliance recognized that only when enterprises are sustainable at scale can the industry’s impact goals be achieved. If the enterprises are unsustainable or remain small, the opportunity for impact will be limited. The Alliance’s activities and investments at this stage of acceleration focused on specific enterprises and included broader support for experimentation and innovation followed by targeting resources toward the best opportunities for sustainable growth. Success in this stage can be measured by the scaling of enterprises within and across geographies in a manner that is economically sustainable. This includes both the growth of specific enterprises and the replication of successful business models by other enterprises.
Our research found that the Alliance focused on three key activities in this stage of acceleration. First, it encouraged variation by enabling a relatively large number of enterprises to experiment with business model and technology innovations. By supporting a diverse set of approaches, the Alliance sought to increase the probability that a subset of enterprises with a demonstrated potential for growth would emerge.
Second, it targeted the most viable enterprises as candidates for additional support. This meant providing more resources to a smaller number of enterprises viewed as having the highest likelihood of achieving sustainability at scale.
Third, the Alliance recognized that a dedicated effort at understanding and sharing lessons learned, best practices, and performance drivers could help speed the success and growth of the selected enterprises while also providing logic for their decision-making.
The Alliance and its partners implemented several programs that provide support to enterprises seeking to innovate. By targeting specific bottlenecks faced by enterprises—such as providing seed capital to support proof of concept pilots, the unique challenges experienced by women entrepreneurs, and the high cost of technology research and development—the Alliance has spurred experimentation and variation. Additionally, the Alliance endeavored to make these programs accessible to as wide a range of enterprises as possible, including programs that specifically focus on locally-owned, early stage ventures.
To encourage scale, the Alliance designed interventions such as a capacity building facility that provided tailored technical assistance to enterprises that were ready to scale and partnered with impact investors that provided growth capital. The Alliance also recognized the importance of de-risking investments in the clean cooking industry by developing loan and loan guarantee programs that provide enterprises with working capital financing that they otherwise would be unable to access. While a winnowing process to identify high performers was necessary to enable the creation of a healthy, self-sustaining industry, this also required that the Alliance manage the tensions and discontent among enterprises that were not selected to receive further support.
As its support for this research study demonstrates, the Alliance is interested in understanding lessons learned and best practices that inform future decision making. Yet disincentives to learning continue, as most of the industry’s funders want to see short-term results that generate immediate impact in the field. However, the Alliance recognizes that this goal must be balanced with a longer-term perspective of learning how best to build enterprises that are sustainable at scale and to accelerate an impact industry with the limited resources available. The industry’s continued evolution, combined with the goal of adding more countries to the eight already in its portfolio, suggests that a learning orientation will only become more critical in the Alliance’s efforts to accelerate multiple markets targeting the BoP.
Implications for the Alliance
In collaboration with the Alliance leadership team, we applied this four-stage acceleration framework to help prioritize and choreograph activities in their strategic planning process. Assessing the gap between the current and desired state of the industry, we developed a roadmap for organizing action and rebalancing activities and investments at the global level, as well as in Kenya and Bangladesh. This analysis started by looking at relative success across the four acceleration strategies.
Over its first five years, the Alliance has been most successful in accelerating investment and collective action, and our analysis indicated that, at a global level, the Alliance’s work is currently centered on the latter stage. Its efforts at mobilizing substantial resources, establishing a common vision and goals, developing a wide social value proposition, and establishing quality and consistency in product offerings have provided a strong foundation for further accelerating the industry.
Maintaining this momentum will require continued attention across the four acceleration strategies. The adoption of the SDGs by the global community has created new opportunities to develop a wide value proposition through linking clean cooking to multiple SDGs. Short-term budget cycles and the emergence of new priorities are a reality of the development community and mobilizing resources will require continued attention to build relationships and activate financial support.
The Alliance believes that now is the time to put greater emphasis on accelerating profitability and impact. Increased investment in developing local institutions, and in awareness creation and behavior change interventions, reflect a greater focus on building sustainable markets for clean cooking enterprises. While the Alliance has invested in fostering variation and innovation among enterprises through a variety of mainly grantmaking programs, a shift toward scaling impact will require the Alliance to place more emphasis on selecting the most promising of these enterprises and facilitating access to the appropriate type and level of scaling capital. As the scale and impact of its investments grow, the Alliance will continue to expand its learning-oriented efforts to ensure these enterprises have access to the latest research on best practices, which will enhance their likelihood of success.
What this analysis produced was a structured approach for identifying next steps in the Alliance’s journey to accelerate the clean cookstove industry, and a guide to building out the details of the organization’s strategic plan. (See “Roadmap for clean cookstove industry acceleration” below.) Applying this approach also yielded insights into the internal capabilities and external collaborations necessary for the Alliance to best achieve continued success. A reprioritization of activities can point to the need for new internal skills and capabilities and also involve reallocating existing staff and resources into new priorities. Similarly, partnerships that are optimized for a particular portfolio of activities may not be as suitable when the focus shifts.
While this analysis was developed for the Alliance, we believe that other IIAs may benefit from pursuing a similar approach. Creating growing and sustainable impact industries that target the BoP—such as affordable energy, clean water and sanitation, better housing, and improved health care—can be life altering for billions of people around the world.
If these IIAs are able to effectively identify, prioritize, and choreograph activities within and across the four stages of acceleration, they and their partners will be better positioned to turn their vision of impact into reality.