ICYMI: A magazine for the business sustainability professional by Erb Institute

A MAGAZINE FOR THE

Business Sustainability Professional IN CASE YOU MISSED IT!

SPRING 2018

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GLOBAL SUSTAINABILITY COMMUNITY

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YEARS STRONG

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Welcome!

ow is the perfect time to pause and reflect on where we spent our time and energy in 2017. It’s ironic, but the one constant in each passing year is change. New people, new ideas, new projects and new ways to make an impact. But, in spite of annual

global model of a vibrant urban center, where business and community thrive in environmental, economic and social health. The Climate Change toolbox is the latest in a series of toolboxes released by the Erb Institute to provide strategies for businesses to address corporate sustainability issues.

change in Erb, one thing has remained the same: our

You will also read about four of our current students—

mission. The Erb Institute was created—and continues

Amelia Harris, Alison Bressler, Paula Luu and Erik Wolfe—

to strive—to leverage the influence and reach of

who were finalists in a case competition sponsored

business to create a more just and sustainable world.

by Patagonia. The competition, and the Erb team’s

Indeed, our new tagline is meant to embody this mission: BUSINESS FOR SUSTAINABILITY.

case, was aimed at driving change in global agricultural systems, with positive impacts for the environment and farmers alike. It is through creative and outside-the-box

It is through our research, educational programs,

thinking that our students and our alumni prove time and

business engagement and global community that the

again that they are the future innovators of sustainability.

Erb Institute makes its impact. Midway through my third year as the institute’s faculty director, I am inspired every

But enough from me.

day by the work we—and our partners—do in the name

I hope you’ll take a few minutes to see what we’ve been

of pushing the boundaries of sustainability. And I’m

up to over the past twelve months. And, most important,

especially delighted to share some of this work with you

I invite you to join us on the exciting business + sustain-

in this inaugural edition of ICYMI! (In Case You Missed It!)

ability journey that will be the year ahead of us.

In this issue, you’ll learn about our newest toolbox,

Welcome to 2018!

which was developed with local impact very much on our minds. Climate Change Strategies for Detroit Small Businesses was developed in collaboration with the Detroit Climate Action Collaborative, and it brings triplebottom-line issues in Detroit to life for local businesses. Beyond local impact, the toolbox positions Detroit as a

JOE ÁRVAI Faculty Director Erb Institute | Business for Sustainability Max McGraw Professor of Sustainable Enterprise School for Environment and Sustainability and Ross School of Business

IN CASE YOU MISSED IT! SPRING 2018 TABLE OF CONTENTS

ON THE COVER

Managing Director Terry Nelidov in an Executive Education session

ICYMI! is a business-focused

6 ENGAGEMENT

publication sharing the work of the Erb Institute. In this and future publications, we will share how our research, teaching and engagement are providing ideas and frameworks that will help businesses move forward in meeting their sustainability challenges.

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24 30

RESEARCH

TEACHING

TABLE OF CONTENTS

COMMUNITY

SOLAR RADIATION MANAGEMENT AS AN OPTION TO FIGHT AGAINST CLIMATE CHANGE Research by Erb Institute Faculty Director JOE ÁRVAI

AN ERB INSTITUTE +

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ENGAGEMENT

+ SUSTAINABLE BRANDS PARTNERSHIP

he Erb Institute and Sustainable Brands noted that our closely aligned missions and goals with respect to sustainability provided the perfect opportunity for collaboration

and partnership. The Erb Institute was instrumental in introducing SB to Detroit, culminating in a successful first flagship conference outside of San Diego. SB’17 Detroit marked the launch of a global conversation to discover

DIRECTOR’S CORNER WITH TERRY NELIDOV

Managing Director, Erb Institute | Business for Sustainability

how redefined societal aspirations are transforming the way brands deliver value for their customers. The Erb Institute synthesized this conversation into a comprehensive document that will help this initiative move forward in Vancouver in 2018 and then back in Detroit in 2019. INNOVATION LABS

THE ERB INSTITUTE PARTNERS WITH THE INDIA CENTRE FOR RESPONSIBLE BUSINESS

As part of SB’17 and its call to redefine the good life, conference attendees

Erb Research Manager Melissa Zaksek and I were in Delhi for

took part in sessions called innovation labs. Eleven innovation labs, each

the India Centre for Responsible Business’s fourth annual

focused on a different sector, met three days in a row and generated

International Sustainability Standards Conference.

robust discussion about how each sector is evolving and the innovations that will help industries to better enable the good life and to become more sustainable.

International standards have traditionally been developed by western brands, labor groups and/or nonprofits, many times with limited input from the farms and factories that eventually have

The participants reflected a diverse mix of affiliations, roles and interests.

to fulfill them—be it in India, China, Latin America or many other

Each lab began with a subject-matter expert sharing his or her perspective

countries around the globe. The CRB ISS provides a platform

on innovation in the sector. The groups delved into how well the

for discussion of the unique Indian perspective on these myriad

industry supports the good life, barriers that must be overcome to seize

standards—what works in India; how could standards be adapted

opportunities, bright spots of innovation and disrupters that are changing

to work better; where is sustainability headed in India; and how

the game. They identified compelling opportunities to advance innovation

can international standards respond?

and generated some potential solutions.

Melissa and I hosted a panel on innovation and sustainability, with

NEXT STEPS

speakers from Tata, Mahindra, GIZ, UNEP and CSR Europe. Our

In the innovation labs, participants defined how each sector contributes

panel discussions were featured in a few publications after the

to and advances the good life, how each sector has evolved and what

conference, including BusinessWorld and DailyHunt. We also had

is changing now. Across sectors, consumers want more sustainable

a series of discussions with CSO Tony Henshaw of Aditya Birla

products and services, data is getting more accessible and companies

Group about their emerging model of sustainability management,

are getting more nimble. Recommendations that surfaced repeatedly

and joined in CRB’s efforts to create a network of Indian and

included leveraging existing partnerships in new ways, building non-

international universities for research on sustainability in the

traditional partnerships and collaborating with new stakeholders, increasing

Indian context. Most important, we heard firsthand about the

transparency, making data more accessible and smarter, and considering

special challenges and opportunities of “doing” sustainability in

underserved or marginalized communities.

the world’s largest (and sometimes chaotic) democracy, a very

At Sustainable Brands’ 2018 conference in Vancouver, the theme of Redefining the Good Life will be succeeded by Redesigning the Good Life,

different context for getting things done than the China context that typically receives much more international attention.

and the 2019 theme will be Delivering the Good Life. Sustainable Brands is

The Erb Institute looks forward to continuing to develop its

continuing these conversations globally, across six continents and over three

partnership with CRB and exploring research sustainability

years, to broaden the impact of convening these industry leaders.

opportunities in India.

ENGAGEMENT

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THE

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ERB INSTITUTE RISDOC Purpose to Impact Elizabeth Kolbert spoke at the Erb Institute on April 11, 2017, to both small student groups and a large auditorium on many themes related to her Pulitzer-prizewinning book, The Sixth Extinction.

The thing that’s so important to convey is that the system is operating on a big time delay. The greenhouse gases that we’re putting up into the air now—the full effects of those will not be felt for 20, 30 years, by which point there is no turning back.” myumi.ch/6Q89Z

PARTNERSHIP

The Erb Institute and the larger academic community are still committed to supporting Cuba’s transition to a more sustainable market economy. The Erb Institute will continue to be a part of that transition, provided that the evolving U.S. government policy toward Cuba does not eliminate academic travel. The Brookings Institution and the Erb Institute, in partnership with the Ford Foundation and National Rural Electric Cooperative Association (NRECA), came together to support the Cuban government and enterprise leaders in achieving optimum sustainability outcomes and contribute to global sustainability. The Research Initiative for the Sustainable Development of Cuba (RISDoC) was formed in May 2016 with this goal, and member organizations will work toward three specific objectives: 1. Create learning opportunities for the Cuban

academic community, government officials and nongovernmental organizations (NGOs), and enterprise leaders regarding development opportunities around global sustainable business models; 2. Promote learning and engagement around sus-

tainable development in Cuba among international stakeholders; and 3. Conduct research to gather, analyze and dissemi-

nate knowledge on sustainability topics in Cuba. SUSTAINABLE DEVELOPMENT THE PATH TO ECONOMIC GROWTH IN CUBA On April 6, 2017, the Brookings Institution and RISDoC co-hosted an experts seminar that focused on Cuba’s long-term sustainability planning, building on the discussions that took place during Brookings’ May 2016 conference Opportunities for Sustainable Development in Cuba. The discussion focused on three main themes: Cuba’s economic response to changing regional and global contexts (including normalization with the United States), sustainable agriculture and renewable energy. As it prepares for the post-Castro era in early 2018, Cuba has the opportunity to reenergize its economic reform agenda to promote sustainable growth and

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Erb in the Media

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10/02/2017

A TEST FOR CORPORATE SUSTAINABILITY LEADERSHIP BY THOMAS P. LYON

Faculty Member, Erb Institute | Business for Sustainability Dow Chemical Professor of Sustainable Science, Technology and Commerce Ross School of Business, School for Environment and Sustainability

stability. To do so, the country will have to emerge from its current state of economic stagnation, heavy reliance on imports, unsustainably low state wages and ongoing brain drain. The December 17, 2014, announcement of normalization between Cuba and the United States renewed hope that, assuming continued progress toward lifting the embargo, Cuba would be able to access U.S. markets and investment capital to breathe new life into its economy. However, the election of Donald Trump has brought that into question and reaffirmed the view that Cuba should secure its own development opportunities with or without the United States. Experts are increasingly convinced that peerto-peer relationships between Cubans and Americans are a more effective route to expanding bilateral relations for increased development in Cuba. The newly formed RISDoC is putting this idea to the test, bringing together a diverse group of members that combine deep knowledge of the Cuban context with recognized expertise in sustainability, economic development and business acumen in order to support Cuban development efforts and achieve optimum sustainability outcomes. In February 2017, RISDoC held an inaugural conference in Havana that brought together universities and research centers, NGOs and government, including representatives of Cuba’s ministries of agriculture, energy and mines, tourism, and science, technology and environment. The conference sought to open channels for further communication about sustainability at the government and grassroots levels. Read the full Executive Summary from the Brookings Institution: myumi.ch/JDR7n

Corporate sustainability is entering an important new phase, a crucible if you will, that will take us another step towards maturity as a research area. The most powerful nation in the world is in the midst of an almost unprecedented retreat from environmental progress, one that is arguably even more radical than the retreat orchestrated by Anne Gorsuch (mother of the newest Supreme Court justice) and James Watt during the Reagan Administration. From pulling out of the Paris Agreement to abandonment of the Clean Power Plan to rejecting the Waters of the USA program, the federal government is retreating on many fronts at once. This development worries many who care about the natural world around us, the source of the fundamental resources that make our modern world possible. Yet it also offers an opportunity to the private sector to demonstrate its capacity to lead on sustainability issues. Many companies have stepped up, joining campaigns such as the We Are Still In movement. With over 2,300 members (more than 900 of them from the business sector) and $6.2 trillion of economic might, We Are Still In is the broadest cross-section of the U.S. economy ever assembled in support of climate action. By some estimates, even without federal action it is possible to still meet 100% of U.S. Paris commitments. This historical moment offers many opportunities for research. How much of the Paris Agreement commitments will non-federal efforts actually provide? How much of that will be attributable to corporate sustainability leadership, and how much to state or city policies? Will companies speak out on climate change per se, or will they feel a need to couch their views in terms of the more politically palatable issues of renewable energy and energy efficiency? Will they actually walk the talk?

A related question is how scholars can act to make a difference on sustainability issues about which they are passionate. Most of us will end up having our greatest impact through our communications with others—fellow academics, our students, the media, our political representatives, our clients, the public. What unique knowledge do we, as members of Alliance for Research on Corporate Sustainability (ARCS), have to contribute to these conversations? Our distinctive expertise as a research community lies in understanding corporate sustainability behavior. We know much about what motivates business firms to invest in sustainability beyond the level required by law, and the impacts these investments have on profits, people and the planet. We know much about how stakeholder pressure can influence business sustainability decisions. We are making progress understanding whether corporate sustainability initiatives spark complementary public policies or substitute for them, and whether corporate sustainability efforts go beyond reducing the firm’s environmental and social footprint to help lead systemic change. These answers can help managers make decisions that will raise profits while making the planet more sustainable. They can also help policymakers leverage their scarce resources to have the greatest possible impact. And they can help NGOs identify the pressure points that will best bring about change. The need for ARCS research has never been greater.

ENGAGEMENT

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Erb in the Media

06/01/2017

A GREAT, AND TERRIBLE, DAY FOR CLIMATE ACTION BY JOE ÁRVAI, Faculty Director A shareholder vote at ExxonMobil and rumours from the White House made May 31, 2017, both a great and a terrible day in the global fight against climate change.

ICYMI! SPRING 2018

hen reflecting upon yesterday’s climate change news, I thought back to a pivotal moment in the movie City Slickers when Billy Crystal’s character Mitch and his pals Phil and Ed are on horseback discussing their best and their worst days. When Ed, played by Bruno Kirby, is asked to recall his best

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ENGAGEMENT

A decision by Trump to withdraw from the Paris Agreement would place at risk the profitability of scores of American businesses.

day, he talks about his philandering dad:

“So I told him; I said ‘You’re bad to us. We don’t love you. I’ll take care of my mother and my sister. We don’t need you anymore.’ And he made like he was gonna’ hit me, but I didn’t budge. And he turned around and he left. He never bothered us again. Well, I took care of my mother and my sister from that day on. That’s my best day.” When asked about his worst day, Ed paused and said:

“Same day.” If you care about climate change you probably had had a similar experience on Wednesday.

regulatory reform. Consider what is happening in the oil sands. Increasing regulatory pressure, along with changes to oil’s global economic standing, have dealt a body blow to the industry. While oil production in the United States is not currently in the same dire straits as in Canada, it’s no longer inconceivable that increased regulatory pressure—or climate-focused trade restrictions imposed from abroad as other countries focus on reducing their own carbon dioxide emissions—could cut deeply into the viability of America’s petroleum business. Now for the bad news.

First, the news that made May 31st, 2017, a great day:

At the same time as ExxonMobil’s shareholders were making history,

In a historic and surprising vote by a clear majority—more than 62%—of its

Donald Trump’s White House was poised to make history of its own.

shareholders, the global petrochemical giant ExxonMobil was pushed in the

Multiple media outlets were reporting throughout the day that Trump

direction of being more transparent and more specific about the impacts

would order the United States’ withdrawal from the Paris Climate Accord.

of climate change on—and from—its oil and gas business. Last year, the

Not only would Trump’s decision place the United States in dubious com-

same resolution garnered support from a measly 38% of the company’s shareholders.

pany—joining Syria and Nicaragua as the only three countries to not take part in the Paris Agreement—it would represent a slap in the face to

Though the resolution is non-binding, it sends a strong message to the

a clear majority of Americans, and near-majority of Trump’s own voters,

company’s board and officers. When asked to explain the implications

who believe that their country should continue to participate.

of the vote, Edward Mason, head of responsible investment at Church

In light of these numbers, it should be made clear that any decision by

Commissioners, said “climate change is a material financial risk and shareholders want to know how companies will manage the change to a low carbon economy.” Mason added, “we believe Exxon’s board can and should support our reasonable disclosure request.” The vote by ExxonMobil’s shareholders is firmly in line with common sense in the United States about the risks associated with climate change. Indeed, the opinion of ExxonMobil’s shareholders is in lockstep with the opinion of most Americans. In each of our country’s 50 states, for example, a majority of adults believe that climate change is real; a majority of adults believes that carbon dioxide should be regulated as a pollutant; a majority

Donald Trump to withdraw the United States from the Paris Climate Accord is exactly that: his decision. To characterize this impending decision, which is based on a Republican anti-science ideology, as America’s withdrawal from the agreement is both misleading and disingenuous. This would be a decision by Trump and by the Republican Party, and it would disregard the will of the American people. In stark contrast to the vote by ExxonMobil’s shareholders, a decision by Trump to withdraw from the Paris Agreement would place at risk the profitability of scores of American businesses.

of adults believe the United States should set strict limits on carbon

Finally, to all but the most scientifically illiterate—and morally bankrupt—

dioxide emissions from power plants; and a majority of adults worry that

there is no denying that a decision by Trump to withdraw from the Paris

climate change will harm future generations.

Climate Accord would markedly increase the levels of climate-induced risk

Beyond common sense, the vote by ExxonMobil’s shareholders also makes good business sense. To understand why, think about all of the expensive

and vulnerability faced by American communities, American citizens, and America’s natural resources.

coastal infrastructure that would be at risk from more extreme weather

So, what has been the best day for the global fight against climate change

and sea level rise. Likewise, imagine ExxonMobil’s vast network of global

since last year’s presidential election?

operations that could be halted or disrupted as a result of a wide range of

Wednesday.

climate-induced natural hazards, not to mention climate-related civil unrest. The vote also makes good business sense because it helps to insure the company against shocks from changes in consumer demand, as well as

And what has been the worst day? SAME DAY.

ENGAGEMENT

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Erb in the Media

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10/02/2017

Andy Hoffman, faculty member at the Erb Institute, as well as Holcim (US) Professor of Sustainable Enterprise, Ross School of Business, School for Environment and Sustainability, was quoted in a New York Times piece, “Can Hollywood Movies About Climate Change Make a Difference?” The piece discusses recent movies, like Darren Aronofsky’s “Mother!,” that seek to affect climate change through depicting it on screen for mass audiences.

Typically, if you really want to mobilize people to act, you don’t scare the hell out of them and convince them that the situation is hopeless,” said Andrew Hoffman, a professor at the University of Michigan who is the author of How Culture Shapes the Climate Change Debate. The question becomes how best to motivate people. “It’s a difficult balance,” said Mr. Hoffman. “You have to communicate the sense of urgency, otherwise you won’t have a sense of commitment.”

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Erb in the Media

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07/06/2017

We’re Still In?

BUSINESS HAS MUCH MORE TO DO IF IT WANTS TO BE A CLIMATE LEADER BY JOE ÁRVAI If there’s one group that’s basking in the long shadow cast by Donald Trump’s ill-fated decision to withdraw the United States from the Paris climate accord, it’s business. In story after story, reporters and pundits are hailing businesses—large and small—as the would-be saviors of much needed progress in the efforts to curb the risks associated with climate change. Shortly after Mr. Trump announced his decision to withdraw the United States from the Paris Agreement, a host of multinational companies— Apple, Disney, General Electric, Tesla, Mars, among others—moved to cement their positions on the reality of climate change by committing to the Paris accord with or without support for the deal from the White House. It’s true that many corporations have been walking the talk on climate change for a while now. For instance, many companies now find themselves in a position to power their manufacturing facilities and shops with renewable energy sources such as wind and solar; others are creatively combining on-site renewables with purchased offsets to meet their 100-percent renewable energy targets. Not to be outdone, utilities around the world— including DTE in Michigan and Appalachian Power in West Virginia coal country—are either reducing their reliance on coal as an energy source, or are phasing it out altogether. But here’s the thing: It’s relatively easy and painless for businesses to pledge their allegiance to the Paris climate accord. For one thing, the agreement is non-binding, and has no enforcement mechanism, so talk can be sold on the cheap. We also live in a time when it makes decreasing economic sense for companies, especially utilities, to rely on greenhouse

gas-intense fuel sources such as coal when more climate-friendly options—such as natural gas and renewables—are cheaper. As we assess the business response to Mr. Trump’s decision, it’s also important to recognize that pro-Paris pledges have more to do with following through on their long-gestating corporate strategies—and drawing benefits from sunk cost—than they do with new strategic shifts in the direction of acting more aggressively to address climate-change risks. Success in any business is built upon companies taking the long view when it comes to their investments. As it became increasingly apparent more than a decade ago that both customer expectations and the regulatory landscape were tilting in the direction of climate action, businesses around the world responded by planning and investing accordingly. Thus, the position of many businesses when it comes to the Paris Agreement today reflects past investments more than it does future commitments. More telling about the stand taken by many businesses on the Paris climate accord in light of the “we are still in” rhetoric is what they were doing in the weeks and months before Mr. Trump’s decision. Take for example the recent lobbying efforts by many of the United States’ wealthiest and most influential corporations, which are aimed at rolling back pledges they made to address their contributions to greenhouse gas emissions. You may recall that it was barely two weeks into Mr. Trump’s tenure in the White House before chief executives from the United States’ automobile

manufacturers lamented to him personally that the requirement to comply with today’s fuel efficiency regulations—which were developed with companies’ cooperation as part of the deal to save them from bankruptcy barely a decade ago—was cutting too deeply into their already mighty profits. Similarly, oil and gas companies have—since Mr. Trump’s election—placed on hold plans to install new equipment, and to retrofit existing infrastructure, which would be aimed at preventing emissions of the most potent greenhouse gases. At the end of the day, I am an optimist. I couldn’t, in good conscience, do my job if I weren’t. From this perspective, I do believe it is still possible—indeed, necessary—to leverage the influence of business to address the world’s most pressing sustainability challenges; the indisputable reality of human-caused climate change is one of them. But in my role, I’m also required to be an honest broker. From this perspective, the private sector still has much work to do if it is to lead on the climate change file. Investors will need to be more assertive in terms of how they allocate capital toward climate progressives, and away from climate luddites. The same is true of consumers who must exert their own influence by voting with their wallets. Companies themselves will need to work more aggressively to divest their operations from fossil fuels. Most important, business will need to be more proactive in the voluntary search for more innovative climate solutions. In the absence of regulation, real leadership from business on climate will require new strategies and investments that push them to be truly sustainable, and not merely less unsustainable. myumi.ch/659VB

TABLE OF CONTENTS

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RESEARCH

The Superfund Act imposes liability on people and companies that own or operate hazardous waste sites for the costs of cleanup (the researchers call this the “private approach”). But, with this approach, “potential buyers do not want to purchase and develop brownfield sites for fear of potential liability; as a result many sites are simply ‘mothballed’ and left unremediated,” the researchers wrote. But the contaminated brownfields that remain pose public risks. In response, many states have created mandatory cleanup programs (MCPs, or the “public approach”). However, government resources to

A CLOSER LOOK

operate such programs are limited, and these programs typically require a site’s contamination to be completely eliminated.

AT VOLUNTARY

A PUBLIC-PRIVATE OPTION

CLEAN-UP PROGRAMS

that involves agreeing on a plan that is good for both environmental

FOR BROWNFIELDS Based on research by THOMAS P. LYON

housands of “brownfield” sites—properties contaminated with toxic pollutants—across the U.S. sit idle. Delays in remediating these sites

have hampered urban revitalization. One solution has been the

VCPs emerged as an alternative option: a public-private partnership protection and business interests. Developers or site owners initiate a cleanup plan, and public agencies make sure it adequately protects the environment. The owner agrees to achieve a certain level of mitigation and receives a certificate that shields the owner (or a future purchaser) from state-initiated lawsuits in the future. All 50 states have adopted some aspect of voluntary cleanup, and the number of sites using these programs continues to grow. But VCPs are understudied, the researchers noted, so they created a model that assesses both how VCPs affect mitigation levels and how they affect the number of sites that get developed. FINDINGS The model looked at mitigation and development for four types of sites

voluntary cleanup program (VCP), which aims to make

along a contamination continuum. The analysis shows that VCPs do not

progress where mandatory programs have not.

increase mitigation efforts at all sites, but they do increase the number of

How much do VCPs help? A team of researchers set out to improve understanding of these programs and the incentives that they create. They developed the first theoretical model of VCPs, and their findings were published in Environmental

and Resource Economics: “Voluntary Cleanup Programs for Brownfield Sites: A Theoretical Analysis,” by Thomas P. Lyon, Haitao Yin, Allen Blackman and Kris Wernstedt. Lyon is a faculty member of the Erb Institute. BACKGROUND Congress enacted the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, known as the Superfund Act)

contaminated sites that get remediated and placed back on the market. VCPs encourage contaminated sites that would otherwise be mothballed to be redeveloped, the researchers found. In particular, “high-contamination sites with high market value that were unknown to the agency and would have been mothballed to avoid being sent to the MCP will come out of the woodwork and volunteer for the VCP.” VCPs’ effects vary based on individual site characteristics, the researchers found. They noted that “an important contribution of our paper is that we offer a theoretically consistent framework for understanding the introduction of VCPs in many states, and provide a lens through which one can view the divergent empirical findings on the number and types of brownfield sites that participate in VCPs.”

in 1980 to protect the public from toxic pollution. Nearly 400 brownfield

The researchers explained that the way these programs are designed

sites have been cleaned up through Superfund since then, but more than

is important. In particular: “Information disclosure provisions

1,300 sites remain on the Superfund National Priority List, and hundreds

are particularly promising as a way to induce sites with serious

of thousands of less contaminated sites are not on that list.

contamination to take voluntary action.” They found that highcontamination sites are more likely to join a VCP if they are put on a public list of confirmed release sites, which suggests that information disclosure can enhance brownfield development.

RESEARCH

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CLIMATE DEBATE AND THE MCKIBBEN EFFECT IS THERE A MCKIBBEN EFFECT— A RADICAL FLANK EFFECT ON THE U.S. CLIMATE DEBATE—AND IS IT POSITIVE OR NEGATIVE?

ew research by Todd Schifeling, former Erb Institute postdoctoral fellow (of Temple University), and Andy Hoffman (Erb Institute faculty member), in the journal

Organization & Environment, addresses this question in

the context of the climate movement. Schifeling and Hoffman specifically reference Bill McKibben, his organization 350.org, and their relentless

lobbying to encourage divestment from fossil fuels by large stockholders and the effect this may have had on the climate change debate. Goals of the research were to evaluate whether there are important indirect effects from radical

“Schifeling and Hoffman acknowledge that the divestment movement has not—and, realistically,

flanking; postulating that even if a radical

probably cannot—accomplish its goal of

campaign does not achieve its own stated goals,

substantially affecting the financial health of

it may yet cause important shifts elsewhere in

large fossil fuel companies.”

the debate.

However, “the radical position of divestment

This, more or less, is what they speculate is true

helped recenter the US climate debate around

of McKibben/350.org’s divestment campaign.

alternative solutions (rather than “do nothing”

There was a populist movement in 2010 where

versus “do something”) in an enduring way—

university students began requesting that their

or at least enduring so far.”

universities divest their fossil fuel investments. McKibben and 350 have carried that torch and have 749 participating institutions, worth about $5.53 trillion in investments.

Article from Vox. Read the full article here: myumi.ch/amgzx

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RESEARCH

SUPPORTING EMPLOYEES IN SUSTAINABLE CHANGE– RESEARCH BY SODERSTROM AND SCHIFELING

S Fall of 2017 marked the addition of the

ummer interns with EDF

a month, or once a quarter, or visit—that gives

Climate Corps have made many

a recharge that I need to go back and try to tell

companies greener, and their

my co-workers why it’s important to think about

experiences offer some lessons

this not just in the short term but in a triple-

for long-term employees. Researchers Sara

bottom-line way. It gives me space to reaffirm

Soderstrom (University of Michigan) and Todd

my identity.” Trade groups and conferences are

Schifeling (Temple University) are studying EDF

two ways to get this type of connection.

Climate Corps fellows for lessons about how to achieve change.

More system-wide support? EDF also provides valuable technical resources,

Soderstrom and Schifeling surveyed the 125

such as an Excel financial model that all fellows

fellows in the 2016 EDF Climate Corps cohort

and participating organizations can use to

at the beginning, middle, and end of their

evaluate energy projects. Soderstrom urges

experience, and examined their project scopes

companies to think about jointly developing

assistant professor of Organiza-

and eventual outcomes. They also interviewed

such tools and best practices. “Are companies

tional Studies and Program

fellows and EDF staff, including Ellen Shenette,

just along with sustainability for competitive

EDF Climate Corps manager.

advantage? If so, we need to keep resources

Erb Institute’s fourth faculty member, Sara Soderstrom,

in the Environment. Sara, who is also a former Erb Institute

Here, Soderstrom and Shenette offer insights

postdoctoral fellow, focuses her

into how individuals can achieve change—and

research on how corporations engage in societal sustainability

how organizations can help them. Mentoring, technical expertise, and peer support provided

internal. Or is our goal to address a huge societal issue that requires an all-hands-on-deck, solutions-sharing approach? Companies should be explicitly thinking about that.”

by EDF help fellows achieve their goals;

challenges, and how individuals

But EDF Climate Corps also provides broader

companies could provide similar support for

lessons about how to bring about sustainability

within organizations mobilize

their employees.

change. Employees need technical knowledge,

others, develop coalitions and access key decision-makers

How companies can support their sustainability actors

when they are trying to imple-

Any employee working on sustainability issues

ment sustainability initiatives.

needs reinforcement, say Soderstrom and

interpersonal awareness and motivation to succeed. “Someone can be personally committed, trying to enact change,” says Soderstrom. “But if he or she doesn’t have the

Shenette. Soderstrom has found that employees

resources, success will be out of reach.”

working on sustainability crave connection.

Article from the Network for Business

“A sense of isolation is frequent. People will say,

Sustainability. Read the full article here:

‘I found this one organization—I can chat once

myumi.ch/LPVV5

RESEARCH

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SOLAR RADIATION MANAGEMENT AS AN OPTION TO FIGHT AGAINST CLIMATE CHANGE Based on research by JOE ÁRVAI

ften discussed within scientific circles,

their findings were published in Climatic Change—“Beliefs and

but still relatively unknown among

Values Explain International Differences in Perception of Solar

the general public—is solar radiation

Radiation Management: Insights from a Cross-Country Survey.”

management (SRM), a type of geoengineering that reflects short-wave

radiation (such as ultraviolet radiation or sunlight) into space. SRM has the potential to reduce the Earth’s mean temperature, but the technology raises concerns.

Because SRM’s side effects are not well understood, and its use will cross national boundaries, the researchers surveyed people in Canada, China, Germany, Switzerland, the U.K. and the U.S. to better understand both perceptions of SRM and predictors of acceptance among people from different countries. They

Despite potential ecological side effects, SRM would be

investigated public acceptance, tampering with nature, moral

much easier and cheaper for some countries—even compa-

hazard, egoism, altruism and biospheric values.

nies—to implement than carbon dioxide removal, another geoengineering option, because it is already within their

RELATIVELY HIGH PUBLIC ACCEPTANCE

technological capabilities, and its effects might be more

In all six countries, concern about climate change was associated

immediate.

with greater acceptance of SRM. This suggests that, “as people

Erb Institute Faculty Director Joseph Árvai, as part of a group of researchers (Vivianne H.M. Visschers, Jing Shi, Michael Siegrist and Joseph Árvai) set out to study public perceptions of this technology in different countries, and

are more worried about the consequences of climate change, the perceived need for a wide range of strategies—including SRM—for dealing with it is higher,” the researchers wrote. Overall, perceptions of SRM’s high risk and stronger beliefs that SRM interferes with nature were consistently linked to lower acceptance.

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RESEARCH

TAMPERING WITH NATURE Tampering with nature was the most important predictor of SRM

SUN

acceptance in Canada, Germany, Switzerland and the U.K. The strong relationship indicates that “emphasizing the artificiality of SRM is likely to solidify public opposition, independent of

Solar radiation reflected away from the Earth because of solar geoengineering Incoming radiation from the sun

individuals’ valuation of nature and the ecosystem.” So the idea of tampering with nature is important in assessing public acceptance of SRM in western countries. MORAL HAZARD

Solar geoengineering releases a fine mist of sulphuric acid and water

The moral hazard of SRM is that, because the technology can

Solar radiation reaching the Earth’s surface

reduce global temperatures on its own, there would be no reason to address the root human cause of climate change: greenhouse gas emissions. But they found the opposite: Stronger beliefs

EARTH’S SURFACE

that SRM would cause a moral hazard were related to greater acceptance in every country except Switzerland. Why? “It could be that concerns about the consequences of climate change usurped similar concerns about moral hazard, perhaps because people increasingly believe that drastic measures to address global warming are needed to prevent irreversible effects of climate change when other climate mitigation policies appear ineffective,” the researchers wrote. EGOISM Stronger egoistic values were consistently linked to greater SRM

DIFFERENCES AMONG COUNTRIES The U.S. respondents were less concerned about climate change than their counterparts were, and their belief that SRM would pose a moral hazard was weaker. “Hence, American respondents may have been less convinced of the need for a technology such as SRM to combat climate change and were, therefore, less supportive of this technology,” the researchers noted.

acceptance. The researchers explained: “This observation makes

Chinese respondents were more accepting of SRM, and their

sense, in that people who are more inclined to focus on them-

belief that SRM tampers with nature was lower than those of

selves are generally less willing to change their behavior in order

respondents elsewhere. But their belief that SRM presents a

to benefit others; because SRM is a technological (vs. behavioral)

moral hazard was significantly higher than the other countries’

fix, it does not require changes on a personal level.”

respondents. Chinese respondents “worried more that [SRM’s]

ALTRUISM The researchers did not find a strong link between altruism and SRM acceptance. The lack of a strong association suggests that people who support SRM do not necessarily do so to help others. BIOSPHERIC VALUES Biospherism is characterized by a sense of unity with, and concern for, nature, and the survey found that biospheric values were

deployment would hinder mitigation efforts aimed at the root causes of climate change.” IMPLICATIONS The researchers argue that the general public must be consulted about SRM’s acceptability, and that decision-making about SRM should be an internationally inclusive process, as it will require a long-term commitment from the international community.

inversely related to SRM acceptance. The researchers noted that

And the study offers insight in dealing with public perception.

people with strong biospheric values may see SRM as tampering

“Pointing people to the risks of irreversible climate change will

with nature, so the relationship between nature tampering and

increase support for SRM, even to people who feel that this

SRM acceptance may overshadow the relationship between

technology interferes with nature,” they wrote. Also, because

biospherism and acceptance.

people may not associate many benefits with SRM, risk communication should stress these benefits, such as rapidly stabilizing many of the harmful environmental, social and economic consequences of climate change. myumi.ch/LrblE

RESEARCH

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ERB.UMICH.EDU

ERB POSTDOCTORAL FELLOWS Postdoctoral researchers at the Erb Institute are global in their approach, think in

terms of systems and adopt an interdisciplinary perspective on sustainability. Rather than limiting our search to individuals who represent a particular discipline, we seek scholars whose research and academic interests sit—from a contextual perspective—at the inter- and transdisciplinary nexus between broad sustainability and the private sector. The Erb Institute is proud of our 2017 postdoctoral researchers, Uyanga Turmunkh and Caitlin Drummond, and the work they have accomplished to further our pursuit of a sustainable world through the power of business.

2017 RESEARCH HIGHLIGHTS FROM UYANGA TURMUNKH

DECISION AIDS FOR VALUES-CONGRUENT CONSUMER DECISIONS My research into sustainable decisions aims not only to better understand how people make such decisions, but also to identify strategies for improving such decisions. In the face of complex decision situations that involve uncertainty, multiple conflicting objectives, and time trade-offs, people often resort to simpli-

CLIMATE AMBIGUITY: BELIEFS AND LEARNING

fying heuristics and rules of thumb, failing as a result to make

To the extent that personal beliefs govern the consequential

decisions that are congruent with their own fundamental values.

decisions of political and corporate players, behavioral

Environmentally consequential decisions are particularly prone

investigation into the processes underlying the belief formation

to value-incongruent decisions as they usually involve all of these

about scientifically grounded but politically charged issues

complexities. People may care deeply about environmental sus-

can produce valuable implications for climate strategy. My

tainability and yet fail to incorporate this into their own decisions

research in this area aims to do just that. Specifically controlling

as consumers and citizens. Building on behavioral insights from

for initial beliefs, I’ll look to examine how people update these

psychology and consumer behavior, this research will aim to iden-

initial (possibly false) beliefs in response to new information.

tify decision aids that enable people to make more value-congru-

The research will seek to identify personal characteristics that

ent choices in decision situations ranging from everyday decisions

impact the extent to which an individual is willing to update her

about food and clothing consumption to rare, but large-impact

beliefs. The findings of this study will add to basic knowledge

decisions such as car purchases and lifestyle switches.

about learning and will produce implications for effective policy strategies for informing and educating the public about climate change specifically and politically charged issues generally.

ICYMI! SPRING 2018

“Scientific evidence is key to developing sustainable solutions to pressing problems. Better understanding the factors that influence public reception of scientific evidence can guide science communication and help to ensure that science is used to promote sustainability.”

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RESEARCH

RESEARCH FROM ERB POSTDOC, CAITLIN DRUMMOND

DOES EDUCATION MATTER IN SUSTAINABILITY COMMUNICATION? It’s well known that some of the biggest issues of our time are polarized along religious or political lines, meaning that people with different religious and political affiliations tend to have different beliefs on these issues. A new paper by Erb Institute Postdoctoral Fellow Caitlin Drummond, and Baruch Fischhoff of Carnegie Mellon University, investigated whether people with more education and greater science knowledge express beliefs that are more (or less) polarized. In the paper, published in the

Proceedings of the National Academy of Sciences, Drummond and Fischhoff used data from the nationally representative General Social Survey to examine participants’ beliefs about six controversial scientific issues, including the “big bang,” human evolution, stem cell research and climate change. They found that for science and technology topics that are already polarized along political and religious lines, individuals with greater education and science knowledge tend to be more polarized. On climate change, the researchers’ data show that liberals perceive the effects of climate change as more dangerous, compared to conservatives. This partisan gap is wider among highly educated liberals and conservatives. “Scientific evidence is key to developing sustainable solutions to pressing problems,” says Drummond. “Better understanding the factors that influence public reception of scientific evidence can guide science communication and help to ensure that science is used to promote sustainability.” myumi.ch/6QxYO

RESEARCH

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ERB VISITING SCHOLAR WREN MONTGOMERY

Assistant Professor of Management, University of Windsor

A NEW MODEL FOR BUILDING SOCIAL-BENEFIT MARKETS Like all markets, social-benefit markets provide a platform for buyers

can measure and control the benefits, define tradable units and

and sellers to exchange commodities, but they are distinguished by

facilitate trading.

their unique goal of improving social and environmental conditions. For example, most people are familiar with carbon trading markets, which aim to reduce greenhouse gas emissions. Social-benefit markets are not only a promising strategy to combat pressing social and environmental problems; they are also contributing significantly to the world economy, with trading volumes estimated to reach $1 trillion by 2020. Still, the problems that these social-benefit markets address are large, com-

The social-benefit market’s formative processes must allow the diverse actors’ interests to be aligned and integrated into the “market artifact”: the information system that supports the interorganizational arrangement (such as hardware, software, data and procedures). The actors that become involved may include potential market participants, such as buyers and sellers; information intermediaries, such as technology companies; and financial intermediaries, such as banks.

plex and multifaceted; their development and sustenance therefore

Phases of social-benefit market creation

will require novel entrepreneurial approaches.

Corbett and Montgomery provide a six-phase process to align and

The power of a collective

“inscribe” the entrepreneurs’ interests into a market artifact and

In the article “Environmental Entrepreneurship and Interorgan

to form the market.

izational Arrangements: A Model of Social-Benefit Market

• JOINT PROBLEM RECOGNITION

Creation,” recently published in Strategic Entrepreneurship

• JOINT SOLUTION DESIGN

Journal, Jacqueline Corbett and A. Wren Montgomery, who is

• “INTERESSEMENT”

visiting scholar at the Erb Institute, provide a model for creating

• RESOURCE POOLING

social-benefit markets that suggests that the collective contri-

• MARKET ARTIFACT CREATION

butions from several key sectors can provide the necessary re-

• ENTREPRENEURIAL TRANSFERENCE

sources and legitimacy for the new market. This collective should include environmental entrepreneurs from government, business

This model is both similar to and different from traditional

and social movements.

entrepreneurial undertakings. “In particular, the complexities of

These emerging markets in fact require characteristics typical

the recombination of unique skills and resources, leading to the

of entrepreneurs: innovativeness, proactiveness and a willing-

creation of a stable market artifact inscribed with the interests of

ness to take risks. The researchers explain that “a single entre-

a plurality of entrepreneur-actors,” the researchers wrote.

preneur lacks the skills, capabilities, and credibility necessary for social-benefit market creation.” Specifically, Corbett and Montgomery suggest that participants “must come from three main sectors—business, government, and social movements.” Diverse individuals and organizations combine their expertise and

social-benefit market formation demand collective action and

This research adds to the existing literature on entrepreneurs’ role in creating markets, by focusing on a new form of market that relies on environmental entrepreneurs specifically for their unique skills and knowledge. It also builds on literature that suggests “heroic”

resources to achieve a common objective.

entrepreneurs are unlikely to orchestrate complex change alone.

Public goods

Business, government and activist involvement is essential in

One problem with social-benefit markets is that they trade in so-called public goods—such as clean air and water—which may involve no inherent private property rights. Social-benefit markets need to create different incentives for participation than traditional markets do. A potential solution is developing an IOS (interorganizational information system) that will “facilitate the creation and management of virtual property rights for public goods.” This IOS

developing any successful social-benefit market, the researchers say. To this end, the authors lay out actionable guidance for businesses wishing to work across sectors to develop the new ventures and markets of tomorrow. Further, the paper can also be read as a call to action for businesses and sustainability practitioners by illustrating the need to actively work together to achieve a more sustainable future.

ICYMI! SPRING 2018

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RESEARCH

BOOKS+CHAPTERS

ERB FACULTY MEMBER ANDY HOFFMAN AUTHORS CHAPTER IN STATE OF THE WORLD’S EarthEd With global environmental changes locked into our future, what we teach must evolve. All education will need to be environmental education, but environmental education cannot focus solely on teaching everyone to live just a bit greener. Instead, it will need to both teach students to be bold sustainability leaders as well as equip them with the skills necessary to survive the turbulent century ahead.

EarthEd, with contributions from 63 authors, includes chapters on traditional environmental education topics, such as eco literacy, nature-based learning and systems thinking, as well as expanding the conversation to new topics essential for Earth education, such as character education, social emotional learning, the importance of play and comprehensive sex education. Ultimately, only by boldly adapting education do we stand a chance in adapting to our rapidly changing planet. In Andy Hoffman’s chapter, The Evolving Focus of Business

Sustainability Education, he opines that business schools “must teach both enterprise integration and market transformation simultaneously, even though these are fundamentally different approaches.”

Sustainability—A Guide for Boards and C-Suites is a succinct business-focused summary of how business leaders should think about the risks and opportunities associated with sustainability, by Gilbert Hedstrom, former Erb Institute External Advisory Board member. The book includes insights not only from the approximately 60 board of directors meetings he has participated in, but also from the experiences of over 50 companies that have used the Corporate Sustainability Scorecard over the past 20 years.

DOW

NARRATIVE ON SUSTAINABILITY EXECUTIVE EDUCATION

ow recognized that it is often challenging for employees to see the impact that their dayto-day job has on the overall sustainability performance of the company. As such,

Dow needed to find a way to bridge this gap and mobilize

In July 2017, 35 Dow employees,

employees at the individual level as part of redefining the

totaling 11 teams, arrived at the Ross School of Business after

role of business in society at a corporate level. Erica Ocampo, Sustainability Strategy Manager (Consumer Solutions),

Erica Ocampo

inaugural Sustainability Academy

worked with the Erb Institute to develop an interactive and personalized executive education program. Ocampo opined, “I was very happy to find the right partner with the Erb Institute. It was particularly exciting to see their ability to take our initial ideas to the next level by bringing together a multidisciplinary team of experts from the University of Michigan’s Ross School of Business, School for Environment and Sustainability and the Ford School of Public Policy.” Dow and Erb—together with Ross Executive Education—collaborated on the design of a 4-day training

having earned their spot on the

cohort from among over 100 nominated applicants. Each team was assigned a project related to one of Dow’s 2025 Sustainability Goals. Teams were tasked with implementing on a six-month timeframe, investing up to 20% of their regular work schedule. The program was kicked off with an address by Neil Hawkins, Corporate VP and Chief Sustainability Officer who impressed upon the participants the importance and urgency of commitment to Dow’s “Footprint, Handprint and Blueprint.”

that provided an overview of the history, trends, strategies

The footprint is what Dow considers to be the sustainability

and immediate challenges on key environmental, social and

impact they can control directly within their “fence line,”

policy fronts.

while the handprint considers the impact of Dow’s products

Ocampo’s goals for the Sustainability Academy were:

and solutions outside of their direct purview. The blueprint is a bold and ambitious step that fosters collaborations not

1. First, to ensure employees left the program empowered

only with Dow, its suppliers and its customers, but also with

with the new sustainability knowledge and tools acquired,

government, NGOs and academia to foster the type of impact

2. Second, to understand how sustainability connects to

that contributes to the greater well-being of our society.

everything they do at the company, and

The Erb Institute has kept the process on track; adding two

3. Last, to equip them with the right network, tools and

follow-up webinars to keep participants engaged and to

mindset that will allow them to address sustainability

answer questions as the project teams began rolling up their

challenges germane to their spheres of influence.

sleeves. We are excited to see the results.

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Erb Sustainability Management

TOOLBOX SERIES IS

ENV

Materiality Assessment

Human Rights Risk

TRIPLEBOTTOM-LINE DECISIONMAKING

Metrics + Reporting

Stakeholder Engagement

IRO

E SU

Sustainability Strategy

Global Value Chains onceptualized around the Erb Sustainability Life Cycle, our toolbox series springs from

The toolbox series begins with Stakeholder

Metrics + Reporting closes the loop, bringing

a stakeholder-based view of

Engagement, which provides a framework

GRI principles to sustainability reporting and

for mapping stakeholders and identifying their

crafting a coherent plan for authentic

key interests and expectations around the

communication back to stakeholders, around

company’s sustainability impacts. Next, the

the very issues and concerns that the toolbox

the firm, which elevates the interests

and expectations of a broad range of stakeholder groups (not just

Materiality Assessment and Sustainability

series started with. Last, Triple-Bottom-Line

shareholders) in company decision-

Strategy toolboxes prioritize stakeholder issues

Decision-Making is the lynchpin toolbox that

making. Each toolbox is designed as

against business drivers and craft a coherent

applies Erb Faculty Director Joe Árvai’s signature

sustainability strategy around a small set of

decision-analysis framework to goal-setting,

strategic pillars. Global Value Chains extends

decision-making and feedback loops across

sustainability strategy from corporate HQ out to

all of the toolboxes.

complex, remote and often opaque global value

While the series will continue to grow as new

a simple, step-by-step approach to actually “doing” sustainability at the company level, including mini-cases of other companies’ experiences and recommended online resources for more information.

chains, while the Human Rights toolboxes drill down on the UN Guiding Principles on Business & Human Rights and their application through human rights risk assessment and business integration.

sustainability topics are added, the toolboxes’ core focus on “getting things done” for sustainability impact will remain constant. myumi.ch/6xNjz

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TEACHING

OUR MOST RECENT TOOLBOX IS:

CLIMATE CHANGE STRATEGIES FOR DETROIT SMALL BUSINESSES

Each toolbox is designed as a simple, step-by-step approach to actually DOING sustainability at the company level.

Partnering with Detroiters Working for Environmental Justice and the Detroit Climate Action Collaborative (DCAC), Erb developed this toolbox to help often-overlooked small enterprises contribute to meeting Detroit’s climate goals in the city’s ambitious Climate Action Plan released in 2017. The DCAC has piloted the toolbox through two workshops with small businesses in Detroit.

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Erb Case Studies T

he Erb Institute has established itself as a recognized leader in helping top business school

programs and businesses navigate

sustainability challenges through its

teaching case studies. Since 2008, over 70 titles have been published, with more than 43,000 copies in use worldwide. Erb Institute Faculty Member Andy Hoffman has been the driving force behind the rich, timely content and variety of business challenges offered in Erbâ&#x20AC;&#x2122;s case study portfolio. Here, we highlight two highly requested cases new in 2017.

ICYMI! SPRING 2018

Climate Change and the Napa Valley Wine Industry DESCRIPTION Jon-Mark Chappellet, director of operations at Clos Du Val Winery in Napa Valley, is developing a 50-year plan. The effects of climate change are forcing Chappellet and other Napa Valley vineyards to adopt various adaptation strategies to protect the quality of their grapes and wines. Napa Valley is a strong, competitive market for grape growers and vintners and is most known for its ideal growing conditions for cabernet sauvignon grapes, which estate wineries like Clos Du Val focus their production efforts on. Will Clos Du Val have to abandon its signature brand of cabernet sauvignon wines and adopt other grape varietals capable of thriving in the changing climate conditions?

DEVELOPED BY Alex Engel, Robert Meyer and Sarah Perry. This case was written under the supervision of Andrew Hoffman. myumi.ch/Jyg1j

ERB.UMICH.EDU

TEACHING

Seventh Generation and Unilever: Would an Acquisition Affect Sustainability? DESCRIPTION Seventh Generation, a sustainable cleaning and personal care products company, has received a purchase offer from Unilever. Seventh Generation’s CEO is deciding whether to accept the offer and, if so, under what terms. The deal would open many new avenues for growth and expansion for Seventh Generation, but would they be able to continue to pursue their mission “to inspire a consumer revolution that nurtures the health of the next seven generations” under the ownership of Unilever? Could Seventh Generation affect Unilever’s values, to make both organizations more sustainable?

DEVELOPED BY Kirstie Hostetter, Cory Wydysh, Anna Hayden and Mike Porcelli. This case was written under the supervision of Andrew Hoffman. myumi.ch/Jy14j

CAN HEMP EASE THE TRANSITION TO ORGANIC FARMING? Patagonia MBA Case Competition

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COMMUNITY : STUDENTS

ow can a company like Patagonia most effectively work to change the global agricultural system, to sequester more soil carbon, to stop topsoil erosion and to have a positive impact on agricultural lands? This is the question our group set out to answer between December 2016 and February 2017 as part of the Patagonia Provisions Case Competition. It’s a question scientists, politicians and academics have been working on for decades, and many consider it the most important solution to mitigate climate change. Six

We had to overcome our naturally riskaverse MBA student mindset to dive in.”

graduate students from across the University of Michigan had to answer with a five-page solution in just three short weeks. Our friends who had won the competition the year before suggest-

Kentucky produced tobacco, but decreasing tobacco profits have

ed we take a risk and think outside the box. Their advice made

left farmers desperate for an alternative. Since 2014, the number

sense—we are in school, there are no repercussions, and with 70

of acres of hemp that Kentucky farmers have cultivated increased

other teams trying to come up with the silver-bullet answer, we

from 33 acres to nearly 12,800 in 2017. Now is the prime time for

had to try something to set ourselves apart. Still, we had to over-

companies like Patagonia to step in and contract with farmers to

come our naturally risk-averse MBA student mindset to dive in.

grow hemp organically, when farmers already are preparing to

When we did dive in, we focused on the challenges of converting a farm from conventional to organic production. In this situation, the

For the Patagonia project, we designed a contract system and

biggest barriers for farmers is the painful, expensive, steep learn-

educational curriculum to accompany our idea. Patagonia would

ing curve of the three-year organic transition process. During this

benefit from a domestic supply of hemp fibers that, after three

time, farmers cannot use the pesticides and fertilizers they have

years, would turn into thousands of acres of hemp seeds, oils and

depended on to produce high yields, and they also cannot charge a

other certified organic crops.

premium price for their crops yet (they don’t technically become certified organic until the end of the three-year process). So we thought: What if there were a crop that farmers could grow during the transition years that fetches a market premium, is easy to grow and uses the same tools that farmers already own? Paula Luu MBA/MS 2019

Erik Wolfe MBA/MS 2019

This crop exists: hemp.

In April, after five months of research, brainstorming, writing, rewriting, slide creating and rehearsing, we flew to California to present our idea alongside nine teams from other schools across the country. Patagonia CEO Rose Marcario said during one of her welcome talks: “In order to do good, you have to do something.” To us, that was her invitation for all of us to get out there and just do it—to

Industrial hemp is a natural fiber that grows with

take risks—in the name of bettering our world, our society and our

significantly less fertilizers, pesticides and water

agricultural lands. We are proud of the work our mighty “Wolver-

than other row crops, produces both fibers for use in

ine Foodball” team did and lucky to have spent five months of

clothing and fabrics and edible, high-protein seeds and

business school critically thinking about how we can change a

does not contribute to microfiber pollution. Industrial

broken system. The system is nowhere close to being fixed, but

hemp had been illegal in the U.S. since the 1970s war

dedicating this time and thought to the process can help us get a

on drugs determined that it looked a little too much like

lot closer.

its close cousin, marijuana. However, after significant effort from activists and Congress, the 2014 Farm Bill gave decisions about hemp farming legality back to the states. Since then, 33 states have legalized industrial hemp cultivation. One state where Patagonia and hemp pair nicely is Amelia Harris MBA/MS 2019

grow something new.

Kentucky. Until recently, most farmland in western

The University of Michigan sent a cross-functional team of students representing several different schools to the Patagonia Case Competition Finals in California in April 2017. The team included Paula Luu (Erb 2019), Erik Wolfe (Erb 2019), Amelia Harris (Erb 2019), Alison Bressler (SEAS Ph.D.), Nosheen Hayat (Public Health 2017) and Amanda Lownes (Public Health 2018). They were advised by Erb Institute Faculty Director Joe Árvai.

myumi.ch/6wOnd

COMMUNITY : STUDENTS

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PORRIDGE HELPS BUILD A BETTER FUTURE IN

RWANDA N

Julio Villaseñor MBA/MS 2017

project this time was to find possible production efficiencies, help control

production costs better and analyze the production point at which TIP would achieve economies of scale that would allow for more production at a lower cost. One of the first things I did when I got there was to visit the production facility to see

early two years ago, through the

what had changed since I was last there, to

William Davidson Institute, I had the

further understand how porridge was being

opportunity to spend a summer in

produced and what costs were incurred during

rural Rwanda working with the Ihangane Project

the production process. The porridge, which

(TIP), a small nonprofit dedicated to improving

not so long ago existed only as an idea, is now

health care outcomes in the Ruli catchment

produced and sold under the name Aheza, which

area. My project was to develop a business plan

means “better future.” And production has been

for TIP to start producing fortified porridge in

ramping up.

a manner that would help the local economy, empower farmers and subsidize the porridge that is given to HIV+ mothers and infants each month as part of TIP’s nutritional program.

Working with the TIP team, I learned how they handle orders, manage production schedules and plan out their year. I made some recommendations that I hope will allow them to grow faster,

During my time in Ruli, I got to meet, work

but I feel that, whenever I am in Rwanda, I am the

and make friends with an amazing group

one learning. I am always amazed at what can

of people who are committed to changing

be accomplished when a team is committed and

the world one person at a time. Together, we

inspired and has a clear goal.

created a business plan that considered grain prices, seasonality, and farmers’ capacities and limitations—as well as the potential of local and surrounding markets that we would need to approach to make our product a success. Helping to design the small factory and going

My experience with TIP has shown me the transformative and positive power that business can have. TIP is an NGO, but it has created new models that use business to create positive change. Aheza is a clear example of this, but so is the holistic approach that TIP takes when

to Kigali to buy the mill and other necessary

looking at health care—an approach that goes

equipment were highlights of that trip.

beyond medicines and focuses on education,

This year, thanks to the Erb Institute, I was able to go back to Ruli to continue supporting TIP in building up its fortified food business. My

sustainable agriculture, increased optimism about the future and economic empowerment. myumi.ch/L3zv7

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COMMUNITY : STUDENTS

CREATING A SUSTAINABLE FUTURE IN COASTAL REGIONS

ommunities in arid coastal regions are becoming increasingly water-stressed due to over-exploitation of wells, increasing temperatures and decreased precipitation due to climate change. A team of students from the University of Michigan, including Erb student Iuliana Bleanda-Mogosanu, began probing these issues and investigating how they might bring a sustainable solution to water scarcity issues in coastal communities. Over the past year, the team developed a proprietary process to remove salt from local water sources by leveraging solar radiation to power an innovative desalination technology.

What makes this solution truly sustainable is the business component.

Early analysis indicates that the combination of concentrated solar power and single-stage distillation will provide a cost-effective and easy solution to water scarcity issues. What makes this solution truly sustainable is the business component. This technology results in both a salable by-product, by processing brine into salt, and an improved capacity for coastal fishers to bring their catch to larger markets. This significantly improves the technologyâ&#x20AC;&#x2122;s financial viability and provides a true market solution. Furthermore, once communities have permanent access to fresh water, there is a great opportunity to improve the residentsâ&#x20AC;&#x2122; well-being. myumi.ch/6wbnq

Iuliana Bleanda-Mogosanu MBA/MS 2018

COMMUNITY : ALUMNI

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GAUGING THE WORKABILITY OF

CARBON CREDITS IN MOROCCO

A Q&A WITH ERB INSTITUTE ALUM DANNAN HODGE The High Atlas Foundation (HAF) works to improve livelihoods and spur economic growth and grassroots development in disadvantaged communities in Morocco. HAF brought in Erb alum Dannan Hodge (MBA/MS 2017)

to help with the organization’s potential carbon credit projects. Hodge’s three-week project was funded by the Land O’Lakes Farmer to Farmer initiative, organized through the International Executive Service Corp.

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How does HAF work toward sustainability?

facts. I started with a presentation and reference library aimed at providing

HAF works in both social and environmental sustainability. On the social

a baseline understanding of the carbon market. A better grasp of the

side, they seek to provide additional sources of income for rural farmers

stakeholders involved, as well as a more thorough understanding of the

that will allow them to stay on their land farming, versus migrating to

objectives of the carbon market, steps of a carbon project, market trends

urban areas for work. Continued opportunity to work the land increases

and associated risks would allow for better decision-making.

local food security, keeps families together and maintains resources within communities.

This gave the organization a more realistic look at what resources were required, what risks there were to be managed and what possible

What did HAF bring you in to do?

benefits they might see. The organization concluded that they needed

As a not-for-profit working to improve the lives of farmers, HAF must

to understand what their capacities and core competencies were and to

constantly find new and inventive sources of income. With plans to grow

evaluate their mission statement. We didn’t have enough time to do a full

and distribute over a million trees in the coming year, HAF wanted a

feasibility study but instead created templates for their staff to fill in with

business plan to enter the carbon market—to financially capitalize on

their human and financial resources. Then they could decide whether to

carbon sequestration of the trees they produce and distribute by creating

move forward with a carbon credit project and, if so, in what role, with

and selling carbon credits. These additional funds would be used to expand

what stakeholders and under what terms. I also recommended that HAF

their farming community improvement programs in Morocco.

partner with an established project developer, South Pole, as a community

As organizations often do, HAF initially thought the carbon market would be a simple affair: a process of planting trees in return for carbon credits.

organizer. The following week, HAF, a representative of South Pole and I were on a call pitching the project idea and outlining next steps.

Once I met the staff and started to understand the organization’s expertise

How did your Erb Institute education come into play on this project?

and capacity, it became clear that what HAF needed, before a business

Erb seeks to use the power of business to do good in society. This is also

plan, was training on the carbon market and tools with which they could

HAF’s goal, but they lacked the dedicated man power to help them match

assess the feasibility and profitability of a carbon credit project.

their core competencies and societal goals to the most applicable business

How did you help HAF?

opportunities.

With HAF’s limited understanding of the carbon market’s complexity

At Erb, we learn to mesh the tools learned and developed in both business

and high expectations of how carbon finance could help the organization

and natural science courses, while being sensitive not to impose harmful

achieve its goals, I started by providing them with digestible and relatable

outside ideas and ways of thinking that would prove unsustainable down the road. This mindset proved valuable in this project. While I was working with HAF, one of their clients, Ecosia, a search engine that plants trees around the world with marketing income, was also visiting projects. We got to talking about sustainable business models, and Fairphone came up. I remembered speaking with Sean Ansett, an Erb External Advisory Board member, at an Erb-organized dinner and thought

What HAF needed … was training on the carbon market and tools with which they could assess the feasibility and profitability of a carbon credit project.”

a Fairphone-Ecosia partnership would be great. Sean got back to me within 48 hours and put me in touch with the appropriate person at Fairphone, who responded that they thought it was a great idea too and had already been in talks with Ecosia. How has this experience shaped your perspective? Working with HAF reminded me of my pre-grad school career in NGOs and why I decided an MBA was a crucial addition to a Master of Science. HAF is full of individuals with big hearts, pure intentions and visionary mindsets. What is often missing but essential to sustained success is an entrepreneurial mindset and business skills to take those visions and make them realistic enterprises. Ultimately it was gratifying to provide the methods to help the organization think through their goals. However, HAF has the local knowledge, experience and skin in the game to localize the information and tools and can now implement it in the most appropriate and valuable way.

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ERB ALUMNI TAKE MASTER’S PROJECT TO THE NEXT LEVEL Three Erb Alumni and Erb Faculty Andy Hoffman, along with

SEAS colleagues on their master’s project, an exhaustive 2010

three SEAS colleagues, are highlighted in the 2017 documentary

environmental report with specific recommendations and ideas

“Saving Place, Saving Grace.”

for sustainable business ventures. This report became the

The documentary shows the Holy Cross Abbey, a Cistercian

blueprint for Holy Cross’s ongoing sustainability efforts.

monastery in Virginia’s Shenandoah Valley, and their quest

“Their report is the basis for our ongoing stewardship,” says

to create a strategic plan to combat a shrinking membership

Fr. James Orthmann, one of the Holy Cross monks. “The

and management of 1,200 acres. Former Erb Institute alumni

sustainability study from the University of Michigan remains

Kathryn Buckner, MBA/MS ’11, Charlotte Coultrap-Bagg, MBA/

the backbone and motivation of our commitment, fueled by

MS ’11, and Alexander Linkow, MBA/MS ’11, worked with three

our faith vision.”

Kathryn Buckner MBA/MS 2011

Alexander Linkow MBA/MS 2011

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Erb Alumni Engaged in Work Related to All 17 United Nations SDGs

Erb Institute alumni are working in all areas and facets of business, tackling the tough questions. In this fun spin on the United Nations Sustainable Development Goals (SDGs) chart, we showcase by SDG where our alumni are focusing their efforts. The boxes have been proportionally sized to represent the number of alumni stating that their work touches on that goal. myumi.ch/JyYg3

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he glaciers along Ecuador’s eastern cordillera—Chimborazo, Cayambe, Antizana and Cotopaxi—are quickly disappearing, and glaciers along Ecuador’s western cordillera—Cotacachi, Corazón and Sincholagua—have been completely lost in the past ten years. When we climbed and summited Cayambe and Cotopaxi, we saw firsthand the magnitude of both the mountains and the glaciers. These are not small mountains. Cayambe is

ECUADOR’S GLACIERS ARE DISAPPEARING FAST,

19,000 feet tall, and the equator runs right through the mountain. This means Cayambe’s glaciers are the only place on Earth where glaciers straddle the equator, and they are disappearing fast, having retreated 50 percent in the past 30 years. Scientists forecast that

AND THIS COULD SPELL TROUBLE FOR INDUSTRY AND TOURISM

Cayambe’s glaciers will completely disappear in

BY GABRIEL THOUMI, MBA/MS 2008, AND IAN ROBINSON, MBA/MS 2017

to 1997, Cotopaxi lost 0.33 km3 of ice, much of

Gabriel Thoumi, MBA/MS 2008 Summit of Cayambe Glacier, Ecuador

the next 20 years. Cotopaxi is the Earth’s second-tallest active volcano, standing at 19,347 feet above sea level. It is also the second-tallest mountain in Ecuador. Scientists estimate that from 1976

Summit of Cotopaxi Glacier, Ecuador December 2017

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this caused by climate change. That is enough

a high-altitude river. Meltwater that did not go

glaciers throughout the Andes show that glacial

water to fill 132,000 Olympic swimming pools.

directly into the river drained to the paramo,

retreat accelerates during El Niño years and

Need another visual? Stack 132,000 Olympic

high-altitude moorlands that are crucial in

slows, or even briefly reverses, during years of

swimming pools (2m deep) on top of each other,

regulating water resources in the Andes, and

La Niña, which bring colder temperatures and

and you’d have a skyscraper of pools that is 164

incredibly important for the 50 percent of

increased humidity.

miles high. That is a lot of water.

Ecuador’s population that depend on them. Studies indicate that the amount of water

Rainfall in the region is diminishing. Local

coming off the glaciers increases notably in the

farmers are having to make tough choices.

dry season, allowing a steady flow of water to

While water from melting glaciers is helping communities compensate for decreasing rainfall, the glaciers are disappearing because of impacts from climate change and volcanism. AN ECOSYSTEM BEING DISMANTLED BY CLIMATE CHANGE

altitude ecosystems and rivers that sustain the

Antisana Volcano glacier, meltwater accounted for up to 37 percent of the water flowing into

snowcap reflects a greater amount of solar radiation, instead of absorbing it, thereby reducing the amount of runoff. Accelerated glacier retreat increases the amount of solar radiation the mountains absorb, because the sunlight hits the

Studies show that glacial melt in the Andes

mountains instead of the glaciers. This absorbs

occurred at a relatively stable rate before that

the radiation and increases melt.

glaciers are particularly sensitive to the changing

meltwater from the glaciers feeds the high-

lost during the dry season. Furthermore, a white

lost between 30 and 50 percent of their mass.

of its mass between 1976 and 2006. Andean

water supply. For example, in dry seasons, the

season allows the glacier to replenish what it

In the last 30 years, the Andean glaciers have

of the most studied volcanoes, lost 45 percent

fulfilled a regulatory function in the local

glaciers. According to an investigation on the

provides water for consumption and irrigation.

period. The glacier on the Cotopaxi volcano, one

For generations, the Ecuadorian glaciers have

livelihoods of people living in and around the

areas that have extended dry seasons. This flow

Snow and hail accumulation during the wet

climate conditions because they are constantly close to melting conditions. This is evident during years of El Niño Southern Oscillation, which causes temperature increases and rainfall declines in the tropical Andes. Investigations of

Retreating Glacier Hermoso, Cayambe Mountain December 2017

Climate change projections have focused on the parameters of temperature and precipitation. However, the poor resolution of these models, the topography of the tropical Andes, and the lack of precipitation information in the high Andes make it difficult to produce accurate models for the region. This lack of information makes it difficult to predict how to solve these problems for Ecuador.

The Erb Institute is the University of Michigan’s business-sustainability partnership between the University of Michigan’s Ross School of Business and the School for Environment and Sustainability. We work with business leaders to help them improve company competitiveness through enhanced social, environmental and economic performance. Our degree programs prepare students to be future business leaders for sustainability, while our research and executive education prepare current business leaders for what’s next in sustainability. Ross School of Business 701 Tappan Street Ann Arbor, Michigan 48109-1234

Regents of the University of Michigan Michael J. Behm, Grand Blanc Mark J. Bernstein, Ann Arbor Shauna Ryder Diggs, Grosse Pointe Denise Ilitch, Bingham Farms Andrea Fischer Newman, Ann Arbor Andrew C. Richner, Grosse Pointe Park Ron Weiser, Ann Arbor Katherine E. White, Ann Arbor Mark S. Schlissel, ex officio

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The University of Michigan, as an equal opportunity/affirmative action employer, complies with all applicable federal and state laws regarding nondiscrimination and affirmative action. The University of Michigan is committed to a policy of equal opportunity for all persons and does not discriminate on the basis of race, color, national origin, age, marital status, sex, sexual orientation, gender identity, gender expression, disability, religion, height, weight, or veteran status in employment, educational programs and activities, and admissions.

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Project Managers Carolyn Kwant Carmen Quinonez Writer Allison Burtka Selected Photography Marc-Grégor Campredon Design Susan Ackermann

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