Solving sanitation for all: The intersection between purpose and business

The private sector is increasingly aware of the need for leadership in solving important public challenges, and ensuring long term environmental and social sustainability globally. Conversations on purpose and on how each company is aiming to improve society permeate boardrooms, annual letters, investor indices, and talent recruitment events – so how can we work better together to accelerate progress and demonstrate the business potential?

In his annual 2019 Letter to CEOs, Larry Fink underscored:

“Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being – what it does every day to create value for its stakeholders. Purpose is not the sole pursuit of profits but the animating force for achieving them.”

Excitingly, efforts to embed purpose are no longer the traditional Corporate Social Responsibility (CSR) programs of the past where employees volunteered or philanthropic donations were made with excess profits. The private sector is evolving – increasingly aware that improving society requires looking holistically at all aspects of their business and employee and community engagement. Now, supply chains are evaluated for responsible sourcing, for the lives and livelihoods of their suppliers and communities, for the environmental impact. Products are developed and evaluated for their long-term impact, and tailored to more local needs across a broader, and more inclusive, range of target customers. Investors are rewarding companies prioritizing diversity and responsibility with new ESG indices and preferential investment. A shift is underway, where strategic focus is driven by global challenges and long-term sustainability, rather than just immediate gains. 

Today, over two billion people – more than 1 in four worldwide - still do not have access to basic sanitation (JMP 2019.) Improving accessibility to basic sanitation is an opportunity to solve one of the world’s greatest challenges, and to do so sustainably by helping develop a future market.  

I joined LIXIL, maker of pioneering water and housing products, just over six months ago as a company that embodies these purpose-driven ideals across its brands. Establishing Global Sanitation & Hygiene as one of the three pillars of its Corporate Responsibility Strategy, LIXIL has been tackling the global sanitation crisis by commercializing solutions such as its innovative and affordable SATO products.

SATO offers a range of products – toilet squat pans, stools, and systems for pit latrine connections - that suit local requirements and preferences, reflecting religious, social, and structural differences depending on the country and location. Importantly, the affordable products can make the experience of using the toilet safer and more pleasant (limited odor, flies, etc.) – making a consumer more likely to keep using the toilet instead of returning to open defecation.

SATO launched in Bangladesh in 2012, and today, the SATO business model in Bangladesh is breakeven, demonstrating that social enterprise can be viable and self-sustaining even under challenging operating conditions.

Junichi “Jack” Goto, CEO of SATO, recently shared:

“I am proud to be leading SATO, one of the most exciting and unique businesses within LIXIL. … Our strong and knowledgeable local partners BRAC and RFL [in Bangladesh] are the keys to our success by contributing innovative and reliable approaches for sanitation marketing, and robust sales and distribution models. We welcome potential local partners around the world to join us in tackling sanitation issues in other markets.”

With local partners playing an important role in demand creation, the business today encompasses production, distribution, installation and maintenance, all sourced locally. SATO sees success in markets beyond Bangladesh as well, with its smartly designed, affordable, hygienic and manageable SATO products now present in over 25 countries, an increase of 10 countries in less than a year.

SATO continues to seek for new and effective approaches to deliver products to millions. LIXIL has and will continue to partner with UNICEF, USAID, PSI, UNHCR, WaterAid, BRAC and many other organizations who play an important role in sanitation demand creation and education as well as seek new partnerships with other private sector companies and stakeholders.

I know that we cannot fundamentally improve society for all without private sector leadership – and the private sector cannot do it alone. Our SATO team is refreshing our strategy and devoting new resources to tackle the global sanitation crisis in anticipation of even further growth and to improve our ability to reach more people in need of these innovations. In partnership with other companies, local stakeholders, and funders, we can continue to strengthen the role of the private sector and partnerships in achieving the ambitious global agenda. Together, we can look holistically at the challenges, and design solutions that amplify each of our individual efforts.