It is good to learn that Kenya's rose-growing industry has been transformed since we reported on its damaging impact
In a world of many bad news stories, it is good to learn that Kenya's rose-growing industry, worth $500m a year, has been transformed since we reported, in 2003, on its damaging impact on the people and environment of the shores of Lake Naivasha. Better, safer working conditions and a dramatic new emphasis on sustainability are the upshot of a mix of public criticism and a devastating drought followed by floods that left no alternative but a radical rethink about the way the growers and their workforce used water. Backed by huge charitable organisations like the Rockefeller and the Bill and Melinda Gates foundations, there is an upsurge of interest in this kind of impact investment, where developed-world capital seeks projects in Africa, Asia and South America which can generate commercial returns from sustainable development. Wealthy individuals prefer social enterprise to charity; ethical fund managers look for vehicles that do good at the same time as doing well.
The dilemma is how to judge at what point the costs outweigh the benefits. The current controversy over another Kenyan project, to grow the poisonous and invasive South American plant jatropha for biofuel, shows just how difficult it is to strike a balance. The project's critics protest at damage to the Dakatcha woodland, an important habitat, warn against the extensive planting of an exotic species, and argue that jatropha will produce more carbon than it saves. Its supporters promise jobs and investment in an arid, poverty-stricken part of Kenya. In the wake of land grabs by China, Asia and the Middle East seeking food security for their own people, there is widespread suspicion of an agribusiness invasion, and persuasive arguments against commercial agriculture in countries where more than 90% of the people still rely on subsistence farming. But their backers claim projects that promote food security, create opportunities for smallholders and are environmentally sustainable in countries like Tanzania or Malawi show what can be delivered by good design and careful management.
The best way to judge is by an internationally recognised set of standards. The Global Impact Investment Network's IRIS project seeks to do just that. Yet some impact investment funds are still reluctant to sign up: they recognise the protection such a system would offer; but they are reluctant to commit to anything that might slow the cash flow. Plenty of African entrepreneurs find some funds' concerns to promote equity and transparency irrelevant in a marketplace desperate for cash. Our report today makes clear that consumer pressure is a powerful incentive. That Mother's Day bunch of roses smells a little sweeter now than 10 years ago.