Investing in livelihood and

enterprise development

By Philipp Essl

19 January 2015

BG case studies on strategic social investment

Legal notice

Certain statements included in this presentation contain forward-looking information concerning BG Group plc’s strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which BG Group plc operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within BG Group plc’s control or can be predicted by BG Group plc. Although BG Group plc believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from the guidance given in this presentation for a number of reasons. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the “Principal risks and uncertainties” included in the BG Group plc Annual Report & Accounts 2011. Nothing in this presentation should be construed as a profit forecast and no part of this presentation constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. BG Group plc undertakes no obligation to update any forward-looking statements.

No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this presentation and no responsibility or liability is or will be accepted by BG Group plc or any of its respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) in relation to it.

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About BG Group

• Market leader:

– FTSE top 25 company

– Listed on London Stock Exchange

– Market capitalisation

– Circa $ 45 billion

• Two highly distinctive capabilities:

- World class exploration

- Unique LNG model

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Deepsea Metro I drill ship

Where we work

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BG approach to strategic social

investments

• Country-level approach, supported by corporate guidelines &

expertise

– Alignment with local/national development & BG business objectives

– Projects based on 3-5 social investment strategies and annual work

plans

• Focus areas: livelihoods & enterprise development, vocational

training, and STEM education

• Prior assessments to understand local context – development

needs and constraints (e.g. socio-economic baseline, etc.)

• Delivery through expert partners (international & national NGOs)

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Case study 1

Livelihoods development project

in Bolivia

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Business and community context (I)

• Since 2000, BG Group in

Bolivia operator of gas

operating plant with 6

integrated, on-shore gas

fields

• Local footprint communities

with little livelihoods options

(only fishing)

• Strong dependency on

external support (NGOs)

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Business and community context (II)

• Difficult company/community

relationship

• Ad-hoc charity to respond to

local expectations with

limited, long-term benefits

• Continued pressure locally

and nationally to

demonstrate contributions to

broader local development

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Shift in community investment

approach

In 2009/2010, decision to apply more strategic approach to social

investment

– Participatory baseline study to strengthen understanding of local

context

– Joint identification of development priorities for BG support: local

economic development to support family incomes, as well as

local institution building

– Company and community relationship strengthened through this

process

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Launch of “value chain development”

project with NGO

• “Honey/beekeeping” identified, based on strong competitive

advantage

• Objective & beneficiaries: “develop sustainable source of

household income for families in local footprint area”

• Activities: capacity building along entire honey value chain

(production, processing, and commercialisation)

• Focus on measurement: production in kg; cost in $, sales in kg & $

• Capacity building of local institutions part of the project

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Honey production

1145 producer household (’14) Total production (’14): 6,200kg

Commercialisation

12Total revenues 2014: 20,000 USD (~10% ROI)

Launching the brand “Weenhayek”

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Case study 2

Investing in entrepreneurship development

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Youth entrepreneurship development

– the business case

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Country perspective:

Youth unemployment and lack of

opportunities key political and

economic challenge

BG Group perspective:

Strong community expectations

regarding job and enterprise

opportunities business risks

Shared value proposition:

Supporting enterprise & job creation, benefiting

BG’s supply chain and/or broader economy

Global, strategic partnership with

Youth Business International

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Support youth (<35 yrs.) to

create new businesses and

subsequently jobs

Strong focus on M&E to

understand what works

KPIs: #businesses, #jobs, etc.

Training

Mentoring

Access to finance

Delivery by local YBI network

member organisation, with

international YBI oversight and

capacity building support

Objective & beneficiaries Measuring results

Activities/services Approach

Projects in Canada, Kenya, Tanzania, and Trinidad

Supporting creation of new, youth-led

businesses in Kenya

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• 366 youth and community members

reached through outreach events

• 172 youth trained

• USD 28,905 distributed in loans

• 30 new businesses started

Objective & focus: Support alternative

livelihoods among coastal communities in in

Mombasa

Results after 1 year:

Back Up

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Lessons learnt

• Convincing communities to invest strategically can be challenging – but indispensable in order to deliver sustainable benefits

• Good understand of local socio-economic and political context important for design & implementation of strategic social investment

• Social investment process has contributed to a “partnership-like” relationship between communities and BG

• Building institutional capacity among communities (e.g. associations) can complement and leverage development support from public institutions

• Many challenges/risk remain: dependency on BG support, “political hijacking” pf community investments, and managing intercommunity tensions

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Youth entrepreneurship development

– the business case

• Unemployment and lack of economic opportunities among youth

key challenge across many BG host countries & communities

• Key community expectations vis-à-vis BG Group relate to job

and/or enterprise opportunities

• Contributing to broader youth-led enterprise growth and job

creation (direct and/or indirect), of direct benefit to BG business &

supply chain, as well as to broader economy

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