|The Business Response to HIV/AIDS (UNAIDS, 2000, 79 p.)|
|SECTION 2. THE BUSINESS IMPACT OF HIV/AIDS|
|2. Individual company level impact|
The importance of identifying the impact of HIV/AIDS on individual companies is two-fold:
i. Long-term sustainable business responses will only be achieved if all stakeholders (leadership, managers, personnel, shareholders) within companies are convinced of the real business rationale for action. In particular, a committed and knowledgeable leadership is paramount, as highlighted in many of the Profiles in this report.
ii. A clear understanding of the specific impacts of HIV/AIDS on a company and of the context in which these occur (e.g. modes of transmission), is a critical factor in the development of effective and appropriate policy and programme responses.
Beyond the macro-level impacts on markets, labour, savings and investments that are described above, it is possible to identify two broad areas in which HIV/AIDS impacts on individual business operations:
B. Increased costs
Basic business principles combined with extensive experience clearly provide the direct link between HIV/AIDS, declining productivity, rising production costs and declining company profits. For example, a USAID-funded study of a transport company in Zimbabwe estimated the total cost to the company arising from HIV/AIDS was equal to 20 percent of profits.3 In this case, over half of the costs incurred were through higher health-related costs. This causal relationship between HIV/AIDS and declining profitability is more complex than this evidence initially implies, as illustrated in Figure 3.
FIGURE 3 Impact of HIV/AIDS on a company