The Skype connection to Kenya crackles. Mikkel Vestergaard Frandsen, the 38-year-old CEO of a Swiss company that bears his family name, tried to make himself heard. His excitement is palpable.
"Watching this unfold is crazy," he tells me. "There are so many things we're trying out here, things we've never done before, things that no one has ever done before."
Vestargaard Frandsen is a Swiss for-profit company that's in business to save lives in the global south. Its products include Lifestraw, a portable water filter and Permanet, a long-lasting bednet to protect people from malaria.
Ordinarily, it sells these products to aid organizations and governments. Then they're given to people in need. This time, Vestergaard is trying something different: It's directly giving away about 1 million Lifestraws, at a cost of nearly $30 million, mobilizing thousands of local people to do so, tracking results carefully and expecting to be paid back in the form of carbon credits. Mikkel's right -- this has never been done before.
How this came to pass is interesting. Founded in 1957, family-owned Vestergaard Frandsen originally produced material for work clothes. About 20 years ago, it started a line of relief products like blankets and tents. By 1997, when Mikkel became CEO, the company had phased out conventional textiles to concentrate on relief aid products.
"We're fortunate to be able to build a business around the opportunity to save lives," he says.
Mikkel got especially excited about a simple water filter that the company developed as part of an effort led by the Carter Center to fight guinea worm, a waterborne infection that afflicted millions of people in 20 countries in Asia and Africa.
"It's a pretty nasty thing," Mikkel told me. "The worm gets into your body, and it grows to about a meter long, and then it has to get out of your body somehow." We'll spare you the sickening details.<!--pagebreak-->
Today, thanks in part to the filters his company produced, the disease has been confined to four countries and is on the verge of disappearing. "It will be the first disease eradicated without a vaccine," Frandsen said.
Back in September, 2008 -- on September 15, to be precise -- Vestergaard Frandsen launched a campaign to give away a product called CarePak in western Kenya. More than 115,000 young people who came in for HIV testing were rewarded with CarePaks which including "60 male condoms, an insecticide-treated bednet, a household water filter for women or an individual filter for men, and for those testing positive, a 3-month supply of cotrimoxazole and referral for follow-up care and treatment." I mentioned the start date of December 15 because of something else that happened that day: Lehman Brothers went bankrupt, setting off the global recession. Mikkel realized afterwards that raising funds from donors and governments for his company's products was about to get a lot harder.
That's when the company turned to carbon markets, in this case the voluntary markets. In these markets, companies or individuals buy credits to offset their CO2 emissions.
Lifestraw qualifies for carbon credits, it turns out, because when people in poor rural areas like western Kenya have a way to purify their water, they no longer have to gather and burn firewood to boil it. The program was approved for voluntary carbon credits under the Gold Standard certification scheme. J. P. Morgan Chase is among the first buyers of credits, and will sell them to its clients.
To qualify for credits, though, the use of the water filters has to be documented and carefully monitored. So Vestergaard Frandsen has hired and trained 4,000 community health workers and another 4,000 drivers to give the filters away over the next five weeks. Each is equipped with a smart phone to provide GPS coordinates and photos of each family using a Lifestraw. And the company will hire hundreds more people to make sure the filters keep working -- because its revenues depend on proving that it is offsetting carbon.
Can you see why Mikkel is excited? The Carbon-for-Water program gets clean water to hundreds of thousands of people and protects their lungs from the indoor air pollution created when they burn wood. It creates jobs (albeit temporary) and income in a poor country. It brings carbon finance to Africa, which so far has received less than 5 percent of all carbon finance revenues. It's transparent and accountable, unlike many aid efforts.
And if all goes well, it can get a lot bigger -- because Vestergaard Frandsen expects to profit.
"The carbon-for-water campaign could be a game-changer if we can take this to scale," Mikkel said. We'll see.
Top photo CC-licensed by SCA Svenska Cellulosa Aktiebolaget.