ICYMI: A magazine for business sustainability professionals

IN CASE YOU MISSED IT!

FALL 2018

In clean energy portfolios, money isn’t everything BY JOE ÁRVAI

ICYMI! FALL 2018

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GLOBAL SUSTAINABILITY COMMUNITY

450 ALUMNI IN COUNTRIES 20

120

Graduates of the Executive Education Program in Sustainability

STUDENTS WITH SERVICE BACKGROUNDS

% 28

% FEMALE 49 COHORT

GREAT SCHOOLS + 2 GREAT DEGREES!

4 Faculty + 7 Awesome Staff + 3 Postdoctoral Fellows + 1 Executive in Residence

150+

PEER-REVIEWED ARTICLES

MICHIGAN ROSS SCHOOL OF BUSINESS

U.S. NEWS BEST BUSINESS SCHOOLS 2019

YEARS STRONG

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The long, languid days of summer hen I started at the Erb Institute back in 2013, I was forewarned of frenetic school years but then promised quiet, reflective summers to catch up on projects, ponder strategy and think deep about business, sustainability and the human condition. Even today, people still ask, “Oh, you work at the university. Do you take the summer off?” Well, it’s my fifth year at Erb, and I have yet to take a summer “off.” Quite the contrary: We’ve been hitting the road much of summer 2018, talking with business people, academic colleagues and nonprofit leaders to hear what’s new in business and sustainability.

SARA SODERSTROM shared her research on company-community

partnerships at Sustainable Brands’ annual conference in Vancouver. ANDY HOFFMAN reminded us of the need for a new generation of

“engaged scholar” during his keynote address to accept the Academy of Management’s Distinguished Scholar award in Chicago. We’re returning to Ann Arbor with new perspectives and expanded networks to feed our research and teaching for the coming year.

COMING ATTRACTIONS THIS FALL

WHAT WE DID FOR SUMMER “VACATION”

It’s September in Ann Arbor, and the “frenetic fall” that I was promised is officially here! Indeed, business engagement will continue to be a priority as we close out the year.

At the Erb Institute, we see this type of engagement as vital in shaping the global dialogue on business sustainability. We aim to have a seat at the table, both to hear how executives and thought leaders are thinking about sustainability and to make our own contributions from the work of Erb faculty, students and alumni.

In mid-September, Erb will send a delegation to the landmark Global Climate Action Summit being hosted by California Governor Jerry Brown in San Francisco, while also convening our own affiliate roundtable during Summit Week to explore business-academic collaboration on corporate climatechange strategy.

This summer, Erb was well represented at some milestone business-sustainability events—from the Shift Project’s “Valuing Respect” roundtable on business and human rights in New York City, to Erb sessions at Innovation Forum’s “ROI of Sustainability” roundtable in London and the Network for Business Sustainability’s biannual conference in New York City.

October will welcome Innovation Forum’s “ROI of Sustainability” roundtable to Detroit. Erb will be the forum’s local partner, and we’ll feature thought leadership of Erb researchers, alumni and business partners in this roll-upyour-sleeves, let’s-get-to-work discussion of defining and measuring the impact of companies’ sustainability efforts.

Erb core faculty continued the sustainability dialogue in both business and academic circles.

And stay tuned for Sustainable Brands’ Global Flagship Conference next June! Erb helped bring the conference to Detroit for the first time in 2017, and attendance set a high-water mark at 2,200 participants. Erb is working with SB leadership to lay the groundwork for deeper engagement with the City of Detroit around next year’s conference theme, “Delivering the Good Life.”

As Erb faculty director, JOE ÁRVAI worked with Dow Chemical and Ross Executive Education to deliver another successful cohort of the Dow Sustainability Academy in Ann Arbor. TOM LYON, president of the Alliance for Research on Corporate

Sustainability, led design and delivery of this year’s ARCS conference in Boston.

More to come!

TERRY NELIDOV Managing Director Erb Institute | Business for Sustainability

IN CASE YOU MISSED IT! FALL 2018 TABLE OF CONTENTS

6 ENGAGEMENT

ICYMI! is a business-focused

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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RESEARCH

TEACHING

TABLE OF CONTENTS

COMMUNITY

BUSINESS SUSTAINABILITY 2.0

Market Transformation Research by Erb Institute Professor ANDY HOFFMAN

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ERB INSTITUTE CONVENES THE BUSINESS SUSTAINABILITY COMMUNITY OF DETROIT The Erb Institute hosted a Sustainable Brands Networking Reception in Detroit ahead of SB 2019 in Detroit.

he Erb Institute’s May 9th gathering of the sustainability community in Detroit and greater Michigan served as an opportunity to create connections between businesses, government and brands in anti cipation of Sustainable Brands’ return to Detroit in 2019. Our panel provided updates from the business and government perspectives on the role brands can and should play in the future of sustainability in Detroit. Erb Managing Director Terry Nelidov explained the how and why of the Erb Institute’s partnership with Sustainable Brands. A conversation was sparked back in 2015 as SB considered moving its flagship conference to a location that could contribute to the conversation on delivering on the Good Life. Erb became SB’s academic partner in the process.

Detroit is undergoing tremendous growth and has the opportunity to do so in a way that supports a new conception of the Good Life. The competition to bring SB to a major city was stiff. However, in the end, SB 2017 Detroit became a reality and a huge success— with the highest attendance of any SB conference to date. This Networking Reception was an opportunity to continue the conversation from 2017 and start preparing for SB 2019. myumi.ch/6ORqG

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John Erb

President, Fred A. and Barbara M. Erb Family Foundation

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Chief Sustainability Officer and Corporate Vice President for EHS & Sustainability, The Dow Chemical Company

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Kimberly Hill Knott

President/CEO, Future Insight Consulting, LLC

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Joel Howrani Heeres

Director of Sustainability, City of Detroit Terry Nelidov

Howrani Heeres:

“A sustainable city is one that not only ensures Detroit’s financial recovery is sustained and that services are delivered to meet the needs of all Detroiters right now, but provides a road map so that this is accomplished in a way that is for all Detroiters, continuously improved, and is sustained for future generations.”

Managing Director, Erb Institute Greg Pflum

Vice President and General Manager, BASF Corporation

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John Viera

Global Director, Sustainability & Vehicle Environmental Matters, Ford Motor Company KoAnn Vikoren Skrzyniarz

Hawkins:

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The Panelists

Dr. Neil Hawkins

Hill Knott: “There is no reason one community should be disproportionately diagnosed with asthma and other respiratory illnesses. Detroit has two of the state’s most polluted zip codes. In order to reduce pollution and create sustainable communities for ALL Detroiters, businesses must work closely with city and state government, residents, the academic community, nonprofit organizations and other key stakeholders to fully embrace and implement the Detroit Climate Action Plan and other sustainability efforts.”

Founder & CEO, Sustainable Brands

“Detroit 2019 is a huge opportunity for both the city and the broader community of Sustainable Brands. Redefining, Redesigning, and ultimately Delivering the “Good Life” is a truly humbling and powerful platform. Detroit 2019 will be amazing!”

Viera: “While [Ford] can have a sizable

impact on Detroit communities given the resources available from our large company, our most significant impact in this community is when we combine our efforts with other organizations, both large and small, to truly magnify that impact. What is especially exciting about SB coming back to Detroit in 2019 is that SB can serve as an outstanding platform for a variety of different entities to get together and deliver real impact on the communities in this city. So exciting!”

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SUSTAINABLE BRANDS PARTNERSHIP

Redesigning the Go Sustainable Brands held its flagship annual conference in Vancouver in June, with the Erb Institute as a strategic partner. Erb and SB had teamed up for the SB17 conference in Detroit, recognizing that our missions and sustainabilityrelated goals were closely aligned. The theme of that conference was “Redefining the Good Life,” and SB18 carried that theme forward, focusing this time on “Redesigning the Good Life.” As a strategic partner, Erb will continue to work with Sustainable Brands to plan for SB19, which is bringing the conference back to Detroit with the conference theme “Delivering the Good Life.”

REDESIGNING GOOD MEETINGS Erb Managing Director Terry Nelidov helped facilitate the workshop on “Best Practices and Challenges in Event Sustainability,” together with global event manager Freeman. Attendees shared their experiences with holding sustainable events—the good, the bad and the ugly—and talked about best practices and areas that can be improved. With most participants coming from the Industry Events Council, it was encouraging to see how the events conversation has moved beyond compostable vs. disposable plates, to minimizing food waste, supporting local suppliers, promoting organic alternatives, facilitating accessibility for attendees with physical challenges, promoting diversity in speakers and session content, and replacing the classic conference bag with digital agendas and virtual exhibitions.

REDESIGNING SOCIETY Sara Soderstrom, Erb faculty and assistant professor in the University of Michigan’s Program in the Environment, led the session “CompanyCommunity Partnerships for Purpose and Sustainable Impact.” One example she highlighted was how the Detroit Lions team has built partnerships to benefit Detroit residents—in ways that make sense for both the Lions and the local communities. The process has required the team’s humility in being willing to learn about the city’s needs, and the team has chosen partners that align well with the team’s core purpose. This kind of match helps build sustainable partnerships.

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Good Life DESIGN THINKING AND INNOVATION LABS Design thinking is a solutions-focused methodology that designers use in business and beyond to solve complex problems. Building from the conference theme of “Redesigning the Good Life,” design thinking was weaved throughout the conference, giving attendees opportunities to redesign product and service offerings and rethink business models for a changing, more sustainable economy—and to respond to shifting societal needs. SB18’s Good Pavilions, which were organized around industries and initiatives, employed design thinking during their Innovation Labs. Each of 12 Innovation Labs led attendees through a facilitated designthinking process, drawing on the diverse perspectives the attendees brought from different disciplines, industries and locations. Convergent thinking allowed the conversation to progress and develop solutions, and attendees turned the best ideas into prototypes. The Erb Institute is working on a report summarizing the ideas that all 12 labs generated. The institute developed an Innovation Lab report for SB17 as well, which was released earlier in 2018. myumi.ch/aG7Vm

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C-Suite Speaker Series Dave Stangis Dave Stangis spoke at the Erb Institute in January to both small student groups and a large colloquium about his experience as the chief sustainability officer at Campbell Soup Company and his latest book, 21st Century Corporate Citizenship.

Focus on your business strategy– not the business case of sustainability. The ultimate goal is instead: How can I best accelerate the business strategy, innovation or results? Use the sustainability lens to help the business excel.”

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MEASURING SUSTAINABILITY IMPACT

BY MELISSA ZAKSEK Research and Thought Leadership Manager Erb Institute | Business for Sustainability

In June, Erb Managing Director Terry Nelidov and I traveled to London to attend Innovation Forum’s twoday conference, “How Business Can Measure the Impact—and ROI—of Corporate Sustainability.” This event dove into the complexity associated with holistically measuring, communicating and responding to a corporation’s social, environmental and economic impacts. U.K.-based Innovation Forum conferences take a unique approach, following the Chatham House Rule (the content of the discussion can be shared publicly but not attributed to individual participants) and a strict zero-slides policy. This format offers a breath of fresh air, enabling and encouraging speakers and audience members to speak frankly and directly about the challenges they face and the sometimes unpalatable realities of the business sustainability landscape. At the conference, Terry participated on a panel discussion titled “Social License to Operate: Can Companies Really Value Their Environmental and Social Footprint? What Is the Cost of Failing to Do So?” Drawing from his extensive experience working with communities, nonprofits and extractive companies in Latin America, Terry spoke about the importance of using key principles as an anchor during times of community crisis. For the Erb Institute, these principles include the core beliefs that people matter, organizational operations should align with and reflect community interests and values, and shared learning and best practices are already available (i.e., they don’t need to be re-invented) to support resilience. Terry pointed to the Erb Institute’s foundational, practitioner-focused Stakeholder Engagement Toolbox as a resource to guide companies as they set out to develop a robust stakeholder engagement process.

I was struck by a few key common themes that surfaced over the two days. There was widespread agreement that the landscape of sustainability reporting tools and frameworks is very crowded, making it difficult for companies to decide how to meaningfully measure and communicate their sustainability impact. Many conversations also led to the conclusion that having a company culture that is rooted in shared sustainability values is critical for impact. Finally, companies need to rely on their materiality assessment to identify and respond to the sustainability-related risks that are most material to their company, and prioritize what matters most for their companies and their stakeholders.

Company culture rooted in shared sustainability values is critical for impact. The London conference nicely set the stage for Innovation Forum Detroit, scheduled for October 2–3, 2018, in historic downtown Detroit. As part of our “Conversations With Consequence” series, the Erb Institute is collaborating closely with Innovation Forum to develop a dynamic agenda on defining and measuring sustainability impacts, and a participants roster from across the U.S. and around the globe. Learning from London will inform discussions in October, with a nod to the challenges and opportunities of business in contributing to the growth that Detroit is experiencing! myumi.ch/6507B

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he Erb Institute and the World Environment Center (WEC) brought together 40 seniorlevel thought leaders and executives from business, academia, government and nonprofits, as well as selected Erb Institute students, for a roundtable discussion. Held November 30 to December 1, 2017, in Washington, D.C., with support from the Dow Chemical Company, the roundtable was a highly interactive, peer-to-peer conversation, operating under Chatham House Rules to foster honest and open dialogue. The roundtable focused on three major themes: • Goal-setting for corporate sustainability: developing a clear connection between impacts and metrics to improve decision-making; • Identifying and confronting systemic challenges: forging new partnerships, facilitating learning, and more tightly integrating sustainability impacts with business decision-making; and • Developing new business models: identifying approaches to business that balance social, environmental and economic objectives.

Participants discussed their ideas about and experiences with moving from a tactical, short-term approach to corporate sustainability to one that is longer-term, larger-scale and more robust, and tightly integrated with overall business strategy. Organizations will need to iteratively reevaluate and refine their strategies, and learning from their peers will help inform these processes. About the roundtable, Erb Institute Faculty Director Joe Árvai said, “There’s no shortage of stories about how companies are on the path toward sustainability, or how sustainability is in their DNA. What there is a real shortage of, though, are concrete examples of what companies have done—or are doing—to integrate social, economic and environmental objectives into core business practice.” He explained, “To make corporate sustainability as widespread as possible, we must collectively pivot from high-sounding and inspirational narratives to tools, shared metrics, and structures for data-sharing and learning. That’s what we came together to discuss at this meeting.” myumi.ch/J9GZX

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Erb in the Media

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04/04/2018

I’M SUING SCOTT PRUITT’S BROKEN EPA In 2017, just a few days after Donald Trump was sworn in as president, a freshman GOP lawmaker with only a few days on the job of his own proposed House Resolution 861. Its language was ominous: “The Environmental Protection Agency shall terminate on December 31, 2018.”

I was in my sixth year on the EPA’s Science Advisory Board when H.R. 861 was introduced. When I called senior EPA colleagues to assess the threat, I was assured that it would never happen; the nation’s environmental laws, and the agency that makes and enforces them, could not be killed in two years by a 10-word resolution written by a rookie congressman.

BY 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

Then along came Scott Pruitt. Since taking over as administrator, Pruitt has overseen the nominations and appointments of a diverse array of lobbyists and corporate insiders while at the same time letting key vacancies languish. He has put the brakes on enforcement, slowed or suspended progressive regulatory actions initiated by his predecessors, and defended draconian budget cuts proposed by the White House. He has also gutted the agency’s science advisory boards, one of which I proudly served on. Pruitt’s directive to “reform” the EPA’s science advisory boards, which I believe is both unethical and illegal, led me to join a group of scientists who are suing the agency. From where I sit as both a scientist and former EPA adviser, the motivation behind Scott Pruitt’s actions is as clear as day: He isn’t reforming the agency; he’s trying to kill it. The good news for the EPA is that a majority of Americans support its fundamental mission to protect the environment and public health. And, judging by recent reports, bipartisan calls for Scott Pruitt to resign are growing louder. But for the EPA to really rebound after Pruitt’s repeated assaults, the agency will need to address some of its legitimate shortcomings.

Toxic and risky Pruitt has floated proposals that have not only ignored widely accepted and peer-reviewed science, they have been toxic to morale at the EPA. Last summer, for example, Pruitt—who for years has questioned established climate science—proposed a series of polarizing “red team/blue team” debates aimed at unraveling the public

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consensus—and years of hard work by EPA staff—on climate change. In March of 2018, Pruitt vowed to enact new rules limiting what pseudo scientists like Steve Milloy have deceptively called “secret science.” On the surface, such a rule sounds like a good idea; who, in their right mind would want secret science? But, in reality, this rule would mean that critical public health studies could no longer be used to inform EPA policy because some of the data are protected doctorpatient or researcher-participant confidentiality. Also in March, Priutt issued a series of talking points to agency staff instructing them to exaggerate uncertainties about the human causes of climate change. In effect, Pruitt is asking EPA staffers to lie. As a result of these—and other— actions, career civil servants are leaving the agency in droves, further hastening EPA’s brain drain.

Balancing environmental, social and economic concerns In my job, we don’t just talk about “the environment” anymore; we talk instead about the need for making trade-offs across environmental, social and economic goals. In other words, we talk about sustainability. Step one is to establish better relationships with the communities the EPA serves. The risks that a reinvented EPA will be responsible for managing— from the environmental and public health impacts of climate change to polluted water systems in cities like Flint—must be jointly defined by EPA staff and the citizens who pay their salaries. Likewise, how the magnitude of these risks is measured must be based on science and, importantly, people’s values. I can already hear strident environmentalists bristling at the suggestion of letting public values decide. But they needn’t be afraid: Public values already decide. How we think about environmental health is based entirely on our values.

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What we deem to be a “healthy environment” is a constructed, valuesbased judgment; what we really mean is, healthy enough so that we can feel comfortable with how much of the environment we’re prepared to give up in return for other things—social and economic—that we also value but for different reasons. A reinvented EPA must also forge stronger partnerships with business: Corporate America needs the EPA as much as the EPA needs corporate America. Consumers are demanding more leadership from companies when it comes to sustainability, and they are punishing companies—by withholding their money—that don’t deliver on this new social contract. In my experience working at the intersection of sustainability and business, I’ve been repeatedly told by executives that it’s much easier for them to justify leaving potential earnings on the table in the name of environmental and social progress when they are compelled to do so by regulation. Here’s where better partnerships between companies and a revamped EPA can help. Corporate America and the EPA must work together over the long term to craft sensible and, importantly, adaptable regulations that are responsive to changing environmental, social, and economic conditions. Taken together, the American people will benefit from a reinvented EPA because the agency will do a better job of responding to their needs and concerns. Businesses will benefit because they’ll be better able to plan for the shocks brought by new regulations. And, the EPA will benefit because it will have powerful new allies—companies and more supportive voters—to help it achieve its mission. All of this will mean less helter-skelter at an agency that’s essential for American progress. And, importantly, it will mean that we’ll never again see the perceived need for another Scott Pruitt. myumi.ch/Jm4G1

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Erb in the Media

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01/15/2018

om Lyon, faculty member at the Erb Institute, as well as the Dow Chemical Professor of Sustainable Science, Technology and Commerce, at the Ross School of Business and School for Environment and Sustainability, was a guest on the Sirius podcast Knowledge@Wharton. The episode discussed U.S. Secretary of the Interior Ryan Zinke’s announcement of the next step for responsibly developing the National Outer Continental Shelf Oil and Gas Leasing Program (National OCS Program) for 2019–2024, which proposes to make over 90 percent of the total OCS acreage and more than 98 percent of undiscovered, technically recoverable oil and gas resources in federal offshore areas available to consider for future exploration and development. Let’s start with your reaction to this possibility of selling new leases on sectors in the ocean and places along the Atlantic or Pacific coast. Could we see more platforms showing up in the next couple of decades?

I think we need to consider the story as to whether this will create jobs and avoid dependence on foreign oil. However, there’s been no mention of offshore wind. Wind would probably create more jobs than offshore oil and gas drilling. Avoiding dependence on foreign oil is not a bad thing, but the question is how to do that. In my view, the most effective way to do this is to reduce our use of oil and gas. And, of course, this totally ignores the climate impacts of increasing oil and gas drilling and overrides states’ rights in many of the Atlantic and Pacific states, which are totally unhappy with this proposal. In reality, the main benefit is increased profits for oil and gas companies, which is not a bad thing per se, but we need to weigh it against all of these other considerations. Let’s talk about the environmental impact of having a wide range of areas where we may see drilling in the next couple of decades.

Governors up and down the Atlantic coast are universally opposed. There are 500,000 jobs in the Florida beach tourism industry—a $50 billion industry. Gov. Rick Scott, a Republican, opposes drilling. New

Jersey’s Gov. Chris Christie also opposes drilling due to a $44 billion beach industry with 300,000 jobs. So I don’t think Atlantic states are going to be any more interested in drilling than the Pacific states are. Alaska may be the area in which they will find the most significant opportunity for development. Even though this represents a smaller piece, there are “already estimations that this could be bringing in billions upon billions of dollars economically to the U.S.”

The amount of oil that would come from ANWR would supply the U.S. for a very short period of time. Yes, it would bring additional billions of dollars to the oil and gas industry; however, it’s not clear to me that they are in any great need of that. In terms of what that does for U.S. jobs or reducing dependence on foreign oil, it’s really a drop in the bucket; it has very little benefit for us.

“[A]fter the Deepwater Horizon disaster, people realize that we need to make our oil platforms safer. This administration is now proposing to not bother with that.” In the words of Ryan Zinke, this is a “first step for responsible development.” However, all you have to do is look at the path of the administration to plainly see their intent to open these sectors of the ocean to oil companies to explore.

I think it’s important to keep in mind that this administration says a lot of things, but then the next day comes, and they get distracted. The intent will be to provide more opportunities for the industry. One of the things that Ryan Zinke said is that they plan to do this in a way that is environmentally sound. At the same time, it is important to note that the Interior Department also just recently suspended a study on the safety of offshore oil and gas platforms that was going to be done by the National Academies of

Tom Lyon Weighs in on Secretary Zinke’s Proposals for

Science and Engineering and Medicine. These are the most respected researchers in our country, and after the Deepwater Horizon disaster, people realize that we need to make our oil platforms safer. This administration is now proposing to not bother with that. So I find their claims that they want to do this in an environmentally responsible way a bit unbelievable. Also, I want to point to the way Secretary Zinke has been framing this is in terms of “energy dominance,” which is a new phrasing in the energy business. For 30 years, U.S. presidents have been talking about energy independence, but this notion of energy dominance is a whole new idea, and I think it is important to take a step back and realize that this is a fundamentally meaningless claim. Even if we were the number-one producer of oil in the world, that means nothing. If there is some sort of plan, I can’t see a path for it not being challenged in court.

This may be a move that is on the wrong side of history from the perspective of the investment community also. Over the last few years, there’s been a whole series of large investors who’ve announced their divestment from fossil fuels. Going back to September 2014, the Rockefeller Brothers Fund announced that they would divest from fossil fuels. In 2016, Norway’s central bank, which manages the world’s largest sovereign wealth fund worth $1 trillion, announced that it would divest its shares in oil and gas. In 2016, JP Morgan Chase & Co. agreed to revise its coal policy so as to no longer invest in coal mines, and the World Bank announced that it would no longer fund oil and gas exploration. Right at the end of 2017, the State of New York announced that its $200 billion pension fund would stop investing in fossil fuels and, within an hour, the City of New York announced that its $190 billion pension fund is going to follow suit. So it could be that the market itself will end up raining on this parade and stopping it, but I don’t think we should count on that. myumi.ch/L19R9

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Erb in the Media

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06/18/2018

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 Wall Street Journal piece, “How a Florida Utility Became Global King of Green Power.” The Erb in thethe Media piece highlights NextEra, a Florida-based company that has become the world’s largest operator of wind and solar farms, as well as America’s most valuable power company, all while remaining relatively under the radar. Hoffman was on the NextEra advisory board until 2012. He commented:

“They were focused on business fundamentals and not the Hollywood status” that comes with being a champion of green power.

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BY SARA SODERSTROM Assistant Professor of Organizational Studies and Program in the Environment Erb Institute | Business for Sustainability

a new, more strategic approach to engagement with the local community. Kate and I had been working on a different research project in Detroit, focusing on FoodLab Detroit and the emergence of a sustainable food economy in the city. As we spoke with different food entrepreneurs, we kept hearing about the Detroit Lions as an example of a fantastic partner to these early-stage business people. We started to explore what the Lions were doing and how they were having such a positive impact.

NEW PARTNERSHIP MODELS

Partnerships and Purpose at

SUSTAINABLE BRANDS I was excited to attend and present at Sustainable Brands 2018. My research focuses on how

organizations are engaging with sustainability challenges, and my work’s motivation stems from my deep-seated hope that business will transform how we address the many societal challenges that we face today. I believe that business is uniquely situated to help solve challenges like climate change and poverty. It was inspiring to hear from hundreds of companies at Sustainable Brands that are working to redefine how they do business—to do well by doing good. As a University of Michigan faculty member, it was also exciting to have an opportunity to share my research with an audience of practitioners. My academic career often feels split—research and conferences with other academics, and teaching with practitioners. Yet for our research to have impact beyond the ivory tower—as Professor Andy Hoffman at Erb challenges us to do!—we must engage with practice around data collection, analysis and sharing of findings. Sustainable Brands was a great chance for me to do that. I shared research I had done a few years ago with Kate Heinze, associate professor of Sport Management, University of Michigan. We did a case study on the Detroit Lions and how they developed

The Lions had recently transitioned from a traditional model based on charitable giving to a more focused development model with the goal to “support transformational efforts that improve the wellbeing of metro Detroit’s underserved communities” (Lions’ Living for the City, 2013). In our assessment, we found the Lions’ narrower and deeper approach (focused on community health and local development) to be more strategic, and necessitating a stronger commitment to the city. This novel model of sustainable partnerships for impact contrasts with a more standard approach to community engagement—philanthropic donations of funding.

NEEDS IDENTIFICATION An initial step in the Detroit Lions’ new approach was to complete a concerted, bottom-up process of identifying the city’s needs. The Lions community relations team met with many leaders throughout Detroit—to learn from them and better understand all the activities and expertise that already existed in the city. The team then identified how their own strengths mapped to a long list of community needs, narrowing their areas of focus to those topics that were the best fit between city need and team resources and goals. Thus, the Lions were deliberate in the areas they selected and focused on these two primary areas to develop and strengthen linkages with community stakeholders. Our research identified this as a critical element of their success—recognizing what skills they had and how they could apply them to the city’s needs.

COMMUNICATION AND OUTREACH Once community partners were identified, the next step was communication and outreach. The Lions mindfully considered both what their

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RESEARCH

role should be and how their involvement should be perceived. It was clear to both Kate and me that the Lions’ path towards mindful engagement was critical in their successful outreach. Several key themes were identified that characterize these partnerships: RESPECT AND HUMILITY Listen to different perspectives, defer to the expertise of various partners, and respect the knowledge and experience of long-standing community organizations ENABLER ROLE Engage in a helping, rather than selfserving and imposing, manner AUTHENTICITY A more genuine commitment to helping Detroit’s revitalization; not simply about money or visibility MUTUAL BENEFITS Partnerships that benefit themselves and their partners in terms of more specific organizational goals BROKERAGE Connect different organizations committed to aiding Detroit As I shared these findings with the audience at Sustainable Brands, it was affirming to hear how much these ideas resonated. Leaders across different companies met with me after to discuss how they are developing partnerships for their own projects and to ask about various considerations with respect to building sustainable partnerships for impact. The talk also generated a thought-provoking discussion about “what is impact?” that touched on how to measure the impact of community partnerships, the importance of recognizing causality, and the critical step of defining—and aligning—objectives for each partner in a project. I look forward to continued conversations about impact through partnerships. Through my research, teaching and engagement with practitioners, I hope to connect with many in the Erb community. Note: research findings adapted from Heinze, K. L., Soderstrom, S., & Zdroik, J. (2014). Toward strategic and authentic corporate social responsibility in professional sport: A case study of the Detroit Lions. Journal of Sport Management, 28(6), 672-686.

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In clean energy portfolios, money isn’t everything BY JOE ÁRVAI

eople may be more willing to pay for clean energy and strategies that dramatically reduce emissions than previous studies have suggested, according to new research by Michigan State University Professor Douglas Bessette and University of Michigan Professor Joseph Árvai, “Engaging Attribute Tradeoffs in Clean Energy Portfolio Development,” published in Energy Policy. Árvai is the Erb Institute’s faculty director.

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o prevent global mean temperatures from increasing beyond 2 °C, governments and utilities will need to make drastic changes to electrical infrastructure, including relying more on clean energy and using carbon capture and storage. Many factors are at play, but the cost of these changes and people’s willingness to pay for them usually are at the forefront of strategic planning and political discourse. Studies that measure the public’s willingness to pay often rely on vague policy options, ignore important social and environmental attributes, and do not give people a way to analyze trade-offs, the researchers noted. Studies that don’t make the costs and benefits clear may not accurately gauge people’s willingness to pay, they argued. So Bessette and Árvai conducted three studies on people’s willingness to pay for clean energy and transition strategies in the U.S. and Canada. They gave participants multiple-choice tasks for evaluating real-world portfolio options, including key social and environmental attributes. For some participants, the tasks included constructing an energy portfolio. “Our results show that individuals placed high importance on minimizing costs, yet also consistently ranked strategies highest that reduced both greenhouse gas (GHG) and air particulate emissions, even when those portfolios require considerable cost increases,” the researchers wrote.

TRADE-OFFS Árvai opined that, in making decisions about energy, people ought to consider numerous attributes, including its impact on air quality and mitigating GHG emissions; its risk to human health; its impact on employment, national security, wildlife habitat and biodiversity; the changes to local landscapes or land use it might require (as with wind energy); and how much it relies on risky technologies or technical, social or market innovations. “Making clear how different energy plans perform across such attributes is certainly important; however, simply expanding the range of attributes people consider may not go far enough,” the researchers explained. “This is due to the technical and cognitive complexity associated with recognizing and confronting tradeoffs between attributes, a complexity which increases with the number of attributes included.” In these situations, people may rely on mental shortcuts and systematic biases, so structuring decision processes, working to “de-bias” choices, and breaking complex problems into more manageable steps can help, the researchers said.

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THE THREE STUDIES The researchers conducted three studies between 2014 and 2016. The first two used an interactive energy system model and online interface; participants could build their own energy portfolio options and then engage in two choice tasks. Bessette and Árvai’s previous research had shown that allowing people to put together their own portfolios improves their energy literacy and understanding of how energy systems work. The third study used two choice tasks to examine national-scale energy plans and attributes. All three studies provided relevant social and environmental attributes and multiple methods to investigate trade-offs among them. “Across all three tasks, participants ranked, weighted, preferred and constructed options that were both costly and significantly reduced GHG and air particulate emissions,” the researchers noted.

IMPLICATIONS Most of the studies’ participants rejected the status quo, which suggests that a majority in both the U.S. and Canada support transitioning toward energy systems that mitigate emissions, primarily through the deployment of renewables. In one of the studies, the highest-ranked portfolio option relied on efficiency improvements—an option that is “plagued by public misunderstanding,” the researchers wrote. Their results “suggest that focusing people’s attention on the additional benefits of efficiency improvements, i.e., not just the long-term cost savings, but also the reduced emissions, may motivate adoption.” Overall, minimizing cost was important to participants, but “delineating the social and environmental health benefits alongside those costs—and providing means to explore the tradeoffs between those benefits and costs—generated higher [willingness to pay] for clean energy portfolios” than previous research has found, Bessette and Árvai wrote. And the stakes are high. “Considering the serious consequences of unmitigated emissions, working to improve the processes by which we elicit the public’s willingness to pay for clean energy is critical.” myumi.ch/Lq82y

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BUSINESS SUSTAINABILITY 2.0

Market Transformation BY ANDY HOFFMAN Adapted from “The Next Phase of Business Sustainability”

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STRATEGIES AND SYSTEMS

This broader change will require companies to reshape their strategies to include the sustainability of the wider systems they fit within. They will need to change their approach to operations, partnerships, government engagement and transparency.

he concept of sustainability in business has become mainstream, and market forces have driven sustainability strategy. But, in its current form, business sustainability will not solve the root causes of the problems it is intended to address, says Andrew Hoffman in “The Next Phase of Business Sustainability,” recently published in the Stanford Social Innovation Review. To enact change on a larger scale, business must transform the market. The Erb Institute calls this “market transformation,” and it is the next phase of business sustainability. Hoffman explains that the previous phase, called “enterprise integration,” has involved businesses responding to shifts in the market by integrating sustainability into what they already know how to do. But market transformation looks further forward—it involves business transforming the market to make it more sustainable. And businesses are equipped to make it happen. “The market is the most powerful institution on earth, and business is the most powerful entity within it,” Hoffman writes. “Business transcends national boundaries, and it possesses resources that exceed those of many nation-states.” To combat climate change more substantially, for example, companies have to do more than reduce their environmental footprint. As Hoffman explains, “the market must go carbon neutral and eventually go carbon negative. We don’t yet know how to do that, but we know that it cannot be done by one company or one product. It requires a change in the overall market.”

In operations, for example, companies can incorporate circular models that pay more attention to the end of the life cycle—including how materials and energy can be recovered or reused. Novel partnerships can make gains as well, including partnerships with nonprofit organizations, the government, competitors and typically unrelated companies. Hoffman points to Ford’s collaboration with Infineon, SunPower, Whirlpool and Eaton to develop its MyEnergi Lifestyle program. The program looks at how hybrid electric vehicles, solar power systems, energy-efficient appliances and home design all can reduce someone’s carbon footprint. Transparency is key as well. Hoffman cited Nestlé as an example: The company found forced labor and poor worker treatment in its Thai fish supply chains, made its report public, imposed new requirements on suppliers and, in the process, nudged other companies to take action as well. BUSINESS NOT AS USUAL

Market transformation also requires a new approach to the business model, including new conceptions of corporate purpose, consumption, and models and metrics of business success. Evidence of changes in corporate purpose are emerging in innovations like benefit corporations, or “B Corps,” which integrate objectives beyond profits into their purpose and governance. Companies also are rethinking consumption. One example is Patagonia, which encourages people to try buying used Patagonia products before buying them new, through its Common Threads Initiative. Regarding business models and metrics, new models such as positive organizational scholarship and appreciative inquiry go beyond standard conceptions about behavior, which are cynical about people’s motivations. These new models look at what motivates people to devote their work to improving the world around them. Public sentiment is shifting in favor of sustainability efforts. Most companies see the long-term trajectory of climate change—and many are poised to take action. myumi.ch/JgpzA

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When corporations take credit for green deeds, their lobbying may tell another story RESEARCH BY TOM LYON AND MAGALI DELMAS ABRIDGED VERSION

oday, most large companies like Exxon Mobil, Ford and GM issue slick reports extolling their efforts to conserve resources, use renewable energy or fund clean water supplies in developing countries. This emphasis on efforts to curb environmental harm while benefiting society is called corporate sustainability. Once uncommon but now mainstream, this show of support for a greener and kinder business model might seem like a clear step forward. But many of these same companies are quietly using their political clout, often through industry trade associations, to block or reverse policies that would make the economy more sustainable. And because public policy raises the bar for entire industries, requiring that all businesses meet minimum standards, lobbying to block sound public policies can outweigh the positive impact from internal company initiatives. This kind of corporate hypocrisy—what we call talking green while lobbying brown—is a form of greenwashing, in which companies trumpet their good deeds while hiding their efforts to block progress. As the past and present presidents of the Alliance for Research on Corporate Sustainability, we are concerned that this greenwashing may delay by years or even decades steps that might solve sustainability problems, such as slowing the pace of climate change or ending the ocean plastic pollution crisis.

SOUNDING GOOD YET LACKING IMPACT

We and our colleagues in the alliance have documented many business initiatives that fall short of the impact they claim. One of the best known was the chemical industry’s Responsible Care program, created after an explosion at Union Carbide’s plant in Bhopal, India, killed thousands of people in 1984. Strategy professors Andy King and Mike Lenox showed that participants actually made less progress in reducing their emissions of toxic chemicals than did nonparticipants. That prompted the industry to overhaul the program. Or consider the Climate Challenge program. The Energy Department created this now-defunct partnership between business and government to encourage electric utilities to voluntarily reduce their greenhouse gas emissions. When one of us teamed up with Management Professor Maria Montes-Sancho to evaluate its track record, we found that there was no difference overall between participants and nonparticipants in their emissions reductions. Both of these voluntary initiatives failed to solve environmental problems, so why were they created? In the case of Responsible Care, chemical industry documents show that one of the program’s main goals was preempting tighter regulations. Likewise, public statements the electric utility industry and the Energy Department made indicate that they formed Climate Challenge to stave off new regulations.

And following the Trump administration’s plan to spike the Clean Power Plan, a federal rule that would have limited air pollution from power, utilities have essentially avoided federal climate regulation to date. Even though these and other voluntary initiatives accomplish little of substance, they help call attention to the good steps industries appear to be taking instead of the environmental damage they are causing—which is exactly how greenwashing works. TALKING GREEN WHILE LOBBYING BROWN

As we and our colleagues explain in an upcoming article in the business journal California Management Review, it is easy to get away with greenwashing in part because it’s hard to detect what companies lobby for in the U.S., as there is no requirement to disclose the positions they espouse. “Despite the statements emitted from oil companies’ executive suites about taking climate change seriously and supporting a price on carbon, their lobbying presence in Congress is 100 percent opposed to any action,” Sen. Sheldon Whitehouse, a Rhode Island Democrat, lamented in Harvard Business Review. Exxon Mobil has clearly engaged in this doubletalk. The corporation declared in its 2016 Corporate Citizenship Report that “climate change risks warrant action by businesses, governments and consumers, and we support the Paris Agreement as an effective

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framework for addressing this global challenge.” Yet the nonprofit group InfluenceMap recently found that Exxon was one of the top three global corporations in lobbying against effective climate policy. Exxon Mobil’s hypocrisy may not be surprising given the company’s long history of funding climate deniers. However, it is far from alone in talking green while lobbying brown. Indeed, even companies with much stronger records on sustainability than Exxon do this, often through industry trade groups. For example, Ford said in its 2017 sustainability report that “we know climate change is real, and we remain committed to doing our part to address it by delivering on CO2 reductions consistent with the Paris Climate Accord.” GM’s sustainability report stated that “General Motors is the only automaker on the 2017 Dow Jones Sustainability Index for North America, and is also on the World Index.” Yet as Alliance for Automotive Manufacturers members, Ford and GM both lobbied the Trump administration to weaken fuel economy standards —a strong tool for reducing vehicle emissions. MORE POLITICAL TRANSPARENCY NEEDED

When companies hide their political opposition to sustainability policies, it deprives investors of the right to know how their funds are being used. This obfuscation also denies consumers the right to vote with their wallets for greener products. We believe the best way to expose this duplicity is by requiring corporations to disclose more details about their political actions. For instance, new laws might demand that companies, both individually and as part of industry associations, make their lobbying stances public, and reveal which politicians they have called on to take a given position. And companies could be forced to reveal what they spend on so-called “independent” political advertisements, also known as issue ads. In the U.S., one good option would be to update the Lobbying Disclosure Act to require more detailed reporting, including spending on astroturf lobbying, the practice of using fake grass-roots groups to influence public opinion. The private sector can take action too. In Europe, the Vigeo Eiris rating agency has begun to assess corporate political transparency. Such evaluations would become much more powerful if required by leading investment managers. That is why we see the recent call by BlackRock, the world’s largest asset manager, for companies to “benefit all their stakeholders” as a step in the right direction. myumi.ch/6OABQ

Professor Hoffman’s book selected as Loyola students’ first-year text “First-Year Text” is an initiative that Loyola University instituted in 2006, in which

all of Loyola’s first-year students read the same book over the summer. The book chosen for the 2018 First-Year Text is Finding Purpose: Environmental Stewardship as a Personal Calling, by Andrew Hoffman. In this book, Hoffman “invites us to look beyond material growth and explore the role of the individual and business in discovering a wider purpose to bring about a balanced and sustainable society,” according to the publisher’s description. Martin Finnie, program coordinator for First-Year Text, shared a little bit about the process for choosing the book. In October of the prior year, a campus-wide solicitation invites the Loyola community to nominate a book for review. This list is narrowed down to 12–15 selections that the committee divides up and reads, and then they choose one. This fall, 4,000 first-year students will enter campus having read the book and ready to enter into introspective discussion, specifically as part of Loyola’s “Communities in Conversation” series, which aims to encourage students to make a fundamental commitment to environmental sustainability and justice, and to help them find their passion to serve the world’s needs. When asked what it was about the book that felt like a good fit for the program, Finnie explained, “Finding Purpose speaks to a person’s responsibility as a part of planet Earth. This very much aligns with Loyola’s values, specifically being a globally minded individual. The text does a great job calling upon everyone to evaluate how they impact the Earth in their career, through their faith or in society in general. We hope to help students discover their calling or vocation, if they have not done so already, and we believe Finding Purpose can help to do this while keeping the world’s needs in focus.” He added:

We hope that students understand the positive impact they can have on the world.”

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IS UNEQUAL JUDGMENT OF EQUAL FAILINGS REAL? BY UYANGA TURMUNKH Erb Postdoctoral Fellow

f she had been male, none of this outrage would be happening” was

a popular sentiment about the furor that raged in the media following the comedian Michelle Wolf’s recent performance at the White House Correspondents’ Dinner. How true is the sentiment? Had the same biting jokes been delivered by a male comedian, would they have been perceived as less threatening or vulgar? In business, do we—women included—somehow judge miscalculations, errors in decision-making, ethical transgressions and the like more harshly when the culprit is a woman? The question is important, because we all make mistakes at work. Our performance is a sequence of successes and failures, and the sum total, as judged by our peers, bosses and clients, determines our career progress. If women’s failings are judged more harshly than men’s comparable failings, is it surprising that women may be less likely to succeed than their equally performing male colleagues? If unequal judgment of equal failings is a real and common tendency in all of us, how do we correct it?

THE UNDERREPRESENTATION OF WOMEN IN POSITIONS OF POWER

Women are conspicuously underrepresented (and underpaid) in the upper echelons of entertainment, politics, business and academia. Women represent about half of the adult population and over half of college graduates in the U.S. Yet of the 500 largest U.S. corporations, only 25 have women CEOs, despite the fact that women hold over half of managerial and professional occupations in the U.S. Womenfounded businesses represent about 40 percent of all privately held companies in the U.S., but female founders receive a paltry 2 percent of venture capital financing. While women represent over half of tenuretrack professors at U.S. universities, they account for less than a third of tenured professors. What is

holding women back from moving up? According to a poll conducted by the Pew Research Center, most Americans believe this is because women are held to higher standards than men, with women twice as likely to hold this belief as men. In other words, people— women more so than men—believe that women have to do more to prove themselves than men do.

in our interactions with colleagues and subordinates, observe and attend to their performance-relevant information. Attention requires effort, and, sensibly enough, we know to use it sparingly and wisely. For the most part, our attention is in effort-saving automatic mode, selectively registering and ignoring information. Research has shown that preexisting beliefs function

“The man’s behavior may be judged as evidence of his competence . . . while the woman’s behavior may be attributed to some external factor such as luck.” IS SUBCONSCIOUS BIAS IN PERFORMANCE REVIEWS TO BLAME?

Research by behavioral scientists over the past decades has unearthed valuable insights about how human cognition subconsciously produces biases in our judgments of performance. Through better understanding behavioral research insights, we, in our roles as colleagues and managers, can learn to reduce bias in our judgment and provide better feedback. For businesses, developing performance review systems that eliminate subconscious biases may be a significant step toward reducing gender inequality in pay and promotion. Considering the commonly held belief—especially by women—that performance appraisals often are unfair toward women, learning to bias-proof managerial and organizational appraisal systems also may protect businesses from accusations or suspicions of gender-based discrimination. So what does the research say? Whenever we are asked to evaluate a colleague’s or a subordinate’s performance, we must judge a sum total of his or her multiple separate instances of successes and failures. This means that we must first,

as one such perceptual filter, directing attention toward belief-consistent information and away from belief-inconsistent information. For example, people tend to believe that men are more strongly associated with so-called “agentic” traits such as analytical, decisive and competitive, whereas women are more strongly associated with “communal” traits such as courteous, helpful and sentimental. Thus, we may notice more and register more female colleagues’ and subordinates’ courteousness, helpfulness and sentimentality and, analogously, notice and register more readily male colleagues’ and subordinates’ analytical prowess, decisiveness and competitiveness. Incidentally, “agentic” traits are the ones more strongly associated with leaders in business and politics. If men’s such traits are noted more, then men may be more likely to be recognized and promoted for them. When we notice performance-relevant information, we must draw inferences from the observed information and store them in memory. Interpreting and storing new information also takes effort, particularly when this information is ambiguous, because making sense

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Merriam Haffar

of new information involves resolving its place within the existing informational network in our minds. As such, preexisting beliefs can shape the manner in which new information is encoded. Identical behavior of men and women may be interpreted differently. For instance, the same driven work demeanor may be encoded as “competitive” when exhibited by a man, but as “selfish” when exhibited by a woman. An article in Fortune reported anecdotal but convincing evidence of successful women in technology receiving criticisms for being “abrasive” and “emotional,” while successful men’s critical evaluations contained virtually no such personality-based criticisms. Similarly, causal attributions can lead to selective storage in favor of preexisting beliefs, by discounting behaviors that cannot effortlessly be attributed to the person’s believed stable dispositional traits. For example, an equally competent behavior by a man and a woman can be judged differently. If it is in a domain typically associated with men, the man’s behavior may be judged as evidence of his competence in that domain, while the woman’s behavior may be attributed to some external factor such as luck. Also, an equally incompetent behavior in the domain typically associated with men may be judged as a fluke or an accident when committed by a man, and, when committed by a woman, as evidence of her incompetence in that domain. To make matters worse, at the final step of the appraisal process, when we aggregate into a summary judgment our selectively observed, selectively interpreted and selectively stored information about a colleague’s or subordinate’s performance, we tend to be susceptible to further biases. For instance, research has found that in forming aggregate evaluations, people tend to give more weight to negative attributes than to positive attributes. Moreover, how we weight and combine attributes can vary depending on whom we are evaluating.

THE BAD NEWS AND THE GOOD

Evaluating our colleagues’ and subordinates’ performance requires us to perform a series of information-processing tasks. Unlike machines, however, human capacity for information processing is bounded, and as a way to efficiently use our limited capacity for attention, storage, retrieval and aggregating computation, human cognitive machinery has learned to rely on simplifying heuristics (subconscious rules of thumb) that allow us to perform these tasks with as little effort as possible. Because heuristic processes are—by design—unsystematic, they can make our judgments susceptible to biases. The more ambiguous the performance criteria that we are asked to evaluate, the more vulnerable our evaluations become to the biases produced by our cognitive machinery. The bad news is that the ambiguous criteria, such as flexibility, initiative, communication and interpersonal competence, often are the attributes most evaluations seek to measure. The good news is that being aware of our subconscious biases and, more important, understanding how they may arise can help us minimize their influence in providing feedback about performance. Counterfactual thinking is a notoriously difficult thing to do, but eliminating a potential bias from our judgment may be worth the effort. So next time, when you might be evaluating a colleague’s performance, try to imagine the same behavior being exhibited by a different colleague. Would you make the same evaluation? If not, then it can be helpful to take the time (at least sometimes) to introspectively examine why. myumi.ch/JWMV9

is completing her Ph.D. at Ryerson University’s Environmental Applied Science and Management Program. She is a Vanier Scholar, under the Social Sciences and Humanities Research Council. Her research focuses on the trade-offs that companies encounter in the practice of sustainability, and applying a systems-based perspective on the measurement of sustainability performance. Her work has been published in various journals, including the Journal of Business Ethics and Journal of Cleaner Production. Before joining her Ph.D. program, Merriam worked in the environmental industry as an environmental, health and safety consultant, and as an environmental laboratory manager, and is certified in greenhouse gas accounting and green building concepts (LEED). During her postdoctoral fellowship at the Erb Institute, Merriam will be working in partnership with Ford Motor Company on a multi-year collaborative research initiative that aims to help managers navigate sustainability decisions with inherently complex tradeoffs. Merriam’s research will include the development of a decision-support tool to aid managers in defining, measuring and assimilating social sustainability impact information. This proposed tool will help businesses better understand their social sustainability impacts and leverage key sustainability performance information into operational improvements, product innovations and strategic management decisions. This research will ultimately help businesses enhance their triple bottom line and strengthen their contributions to wider, systems-level sustainability.

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It’s not easy trying to be green SCIENTIFIC REASONING AND SUSTAINABILITY BY CAITLIN DRUMMOND Erb Postdoctoral Fellow Trying to live consciously can be a challenge. Is it better for the environment to purchase locally grown produce? What does it mean for a cleaning product to be “environmentally friendly”? And how much good does bringing a reusable mug to the coffee shop really do? These questions may sound simple, but their answers are often complex. Understanding the impacts of our decisions on our environment is the focus of a great deal of research, the results of which are sometimes conflicting or counterintuitive. Becoming an expert on sustainability research is not exactly feasible for most people. How can consumers make sense of the research so that they can make informed decisions that reflect their values? Researchers, including myself, have sought to identify what skills and knowledge non-experts need to better understand scientific research and apply it to their own lives. In one study, my coauthor and I developed a series of test questions to measure individuals’ scientific reasoning ability—the extent to which they can critically reason about the factors that determine the quality of scientific evidence. Study participants were given statements such as: “A researcher finds that American states with larger parks have fewer endangered species.” Then the participants were asked to indicate whether a second sentence is true or false: “These data show that increasing the size of American state parks will reduce the number of endangered species.” Providing the correct answer, false, requires participants to understand that even if two variables—here, national park size and number of endangered species—are related, this does not necessarily mean that one variable caused the other. For example, maybe states with larger budgets can afford both larger national parks and more efforts to protect animals. This distinction, between correlation and causation, is important for understanding the implications of scientific studies, but scientific reporting does not always make this distinction clear. We found that participants who answered more of these scientific reasoning questions correctly were more likely to hold beliefs consistent with the existing scientific evidence on controversial issues such as vaccine safety. They were also better able to correctly interpret information about the efficacy and side effects of a drug, using numerical information about the results of a drug trial. While our research on scientific reasoning is just beginning, our results so far suggest that skills like scientific reasoning might be able to help nonexperts interpret scientific information and use that information to inform their judgments and decisions. While it might not be easy to try to be green, scientific evidence can help us make decisions that positively impact our communities and our world.

BY WREN MONTGOMERY Erb Visiting Scholar, Assistant Professor of Management, University of Windsor

AND ALLISON BURTKA Erb Institute Staff Writer

A RIGHT TO WATER IS WATER A HUMAN RIGHT OR A COMMODITY? IT’S TREATED LIKE BOTH. As water scarcity becomes more pressing, both public and private entities have had to examine their stances on how water resources should be controlled. These issues frequently arise in the developing world, where water resources and sanitation often are inadequate—but are now arising increasingly in U.S. cities, when drinking water gets contaminated or residents can’t pay their water bills. Residents of Flint, Michigan, have been unable to drink their tap water since the city’s contamination crisis made headlines four years ago. On April 6, state authorities announced that the city’s water is safe to drink, but residents and advocates are concerned that their tap water remains unsafe because some tainted pipes still need to be replaced. Flint’s mismanaged water system left residents with dangerously high lead levels in their bodies and various health problems—which they argue violated the Safe Drinking Water Act and their right to bodily integrity. Flint third-graders’ reading proficiency was reported to have dropped from 41.8 percent in 2013 (when lead poisoning began) to 10.7 percent last year, and some blame the lead poisoning. In 2014, tens of thousands of Detroit households had their water shut off after failing to pay their bills. One Detroit mother of five said to United Nations representatives: “How can you deny a person the right to use a toilet?” After her water was shut off, she was evicted and had to move her family to a bus shelter. A 2017 study by the Henry Ford Global Health Initiative found that residents living on a street with shutoffs were 1.55 times more likely to be diagnosed with a waterborne illness. When people lack access to clean water and sanitation, the implications can be profound.

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A COMMONS In 2010, the UN General Assembly adopted a resolution affirming the human right to clean drinking water and sanitation. The motion passed with 122 nations voting in favor and no votes against, but 44 nations abstained. Those that abstained—including the United States—suggested that a right to water was unclear, unnecessary or premature, given existing rights and other ongoing negotiations. The countries supporting the resolution argued that water was essential for life and noted that large portions of the population lack access to clean drinking water and adequate sanitation. In 2002, the UN Committee on Economic, Social and Cultural Rights had adopted Comment 15, which stated: “The human right to water is indispensable for leading a life in human dignity. It is a prerequisite for the realization of other human rights.” The 2010 declaration reaffirmed this right and made it explicit, and it was subsequently approved by consensus at the UN Human Rights Council, of which the U.S. was a member, in motions in 2010 and 2011, making it legally binding in international law. The UN also has determined that water and sanitation must be sufficient, safe, acceptable, accessible and affordable, defining “affordable” as not more than three percent of a household’s income.

A COMMODITY Traditionally, most of the Western world’s water bodies and water systems have been publicly owned, although private landowners have had limited rights to use water sources on their property. However, as scarcity concerns have grown, industries have expanded around water, ranging from desalination to dam construction to bottled water. Efforts to privatize and sell water resources have grown. The 1992 Dublin Principles declared water an “economic good” for the first time and stated that trading water as a commodity is the most efficient means of managing scarce water resources. Although numerous global governments and organizations and several transnational corporations support this view, others disagree. Some governments and nonprofits have created a global “water justice movement” to try to maintain the traditional model of public ownership and delivery of water. Disputes over privatizing public water systems have arisen around the globe, including the clashes in Cochabamba and La Paz, Bolivia—after the water corporations Suez and Bechtel succeeded in lobbying for privatization in 1999, and the companies were later ousted. Many communities around the world have also pushed to “re-municipalize” water systems—to shift control from corporate back to public entities. Several corporations have found themselves at the heart of this debate, including Veolia Water and Suez Environnement, the world’s largest water-services companies. They are responsible for many municipal water privatizations—and they are the subject of much activist criticism.

A STAKE IN WATER Beyond water-services companies, many corporations that use significant quantities of water have also found themselves at the crux of conflicts over how water should be managed. For example, Coca-Cola has faced protests and boycotts over

its water withdrawals in India; critics say the company has exacerbated drought-related problems. One of the ways the company has responded is by working with local nonprofits to help build “check dams” that allow water from monsoon season to be stored for later use. Nestlé has clashed with environmental and community advocates in the United States and Canada over the water it withdraws for its bottled water. Issues include the price Nestlé pays for water extraction and whether the company’s withdrawals deplete the water table and harm the local environment. On April 2, the Michigan Department of Environmental Quality approved the company’s permit to increase the amount of water it withdraws from the groundwater table from 250 to 400 gallons per minute, for which it reportedly pays a $200 annual fee. The permit drew public ire, and its approval came four days before the announcement that Flint’s water is safe and the city’s free bottled water distribution would cease. Nestlé is not directly connected to Flint’s problems, but critics point out that it is paying next to nothing to bottle and sell water—and has been depleting local wetlands—while Flint residents about 120 miles away were still being charged for water they couldn’t drink. The company issued a fact sheet that addresses some of these concerns and points out that Nestlé has been donating water to Flint residents. Similar issues are at stake in California, where Nestlé pumps water out of the San Bernardino National Forest for its Arrowhead Mountain Spring Water. Nestlé maintains that it is committed to being a leader in water stewardship. It is a founding member of the Alliance for Water Stewardship and states that it “will continue to certify our facilities to the AWS Standard and seek to inspire others to adopt the standard to help advance the principles and practices of water stewardship and responsible water resource management.” Growth in water-intensive energy technologies also is reinvigorating these commons versus commodity debates in the United States and Canada. On a global scale, nonprofits and the media are noting growing attempts to gain private rights to water that was previously in the public commons, through extensive land purchases in South America, Africa, Asia and elsewhere. Land purchases are really about purchasing the water that goes with it—or a “great water grab,” as Peter Brabeck-Letmathe, then Nestlé’s chairman, put it. Banks and investors, from JPMorgan to Deutsche Bank, have also been increasing their water investments. The World Economic Forum has declared the growing global “water crisis” a leading risk to the global economy. Lack of clean water and sanitation creates problems that span around the world, from urban households to rural agricultural production. Many disparate stakeholders have an interest in addressing this crisis. And businesses—from companies that bottle water and sell it, to water services providers, to industries that use water to produce their goods—have an important stake in how water resources are used and protected for future generations. myumi.ch/aZ2mP

We are proud to announce that Erb Institute Visiting Scholar, Dr. Wren Montgomery, has recently accepted a tenure-track position in Corporate Sustainability at the Ivey Business School at Western University. Ivey is Canada’s leading business school and, along with the Erb Institute, a global innovator in sustainability research and teaching. Wren will be continuing her research on the water crisis and greenwashing and will also be involved with Ivey’s Centre for Building Sustainable Value and supporting the Network for Business Sustainability, a global network of sustainability institutes of which the Erb Institute is a member. Congratulations, Wren!

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TEACHING

2017

IDEAS WORTH TEACHING AWARD Erb faculty Andy Hoffman receives honor from the Aspen Institute

rofessor Andy Hoffman was honored as a recipient of the 2017 Ideas Worth Teaching Award for his class on Sustainable Business in Iceland offered through Global Initiatives at the Ross School of Business.

Jerry Davis and Chris White, also professors at the Ross School of Business, were similarly honored for their course on Intrapreneurship: Leading Social Innovation in Organizations. The Ideas Worth Teaching Awards were established to celebrate curricula that bring to life the promise of meaningful work in business—showing students the “choice points” available to firms and managers in realms like sustainability and the future of work. This year’s winning courses focus on critical social issues ripped from the headlines—populism, water scarcity and artificial intelligence among them—and illuminate how and why these issues are business issues. Collectively, these courses paint a picture of what is possible in management education. Upon receiving the award, Andy Hoffman commented, “I am truly honored to be receiving this award, both for its own sake, and also for the impressive company of other award winners.

“While I’ve taught business sustainability in many formats, being able to bring students to Iceland brought the subject matter to life in a novel and compelling way. Given its location at the fault line between the European and North American tectonic plates, and its unparalleled access to geothermal energy, Iceland finds itself in a uniquely opportunistic position. However, there are tough questions still to grapple with, namely how Iceland can harness this energy in a way that both feeds its economy and helps it reduce its carbon footprint. “It was an absolute pleasure to share the concept and promise of business sustainability with an undergraduate group of students. Their questions and comments were on point, and it was fun for me to see their excitement as they quickly began to grasp the scope of the opportunity and possibilities for business to be a positive force in society.” myumi.ch/6xlEE

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TEACHING IN CHINA A Q&A With Tom Lyon

r. Thomas P. Lyon recently taught a short course at Shanghai Jiao Tong University on Corporate Environmentalism and Public Policy. Lyon holds the Dow Chair of Sustainable Science, Technology and Commerce, with appointments in both the University of Michigan’s Ross School of Business and School for Environment and Sustainability. He talked with the Erb Institute about his experience teaching on these topics in Shanghai. How did this course at Shanghai Jiao Tong University come about?

Professor Haitao Yin, a former Erb postdoctoral researcher who teaches at the university, invited me to teach it. I had previously taught a short Ph.D.-level course there on energy economics, but this was my first time teaching this course, which was aimed at MBA students in an international MBA program. About two-thirds of the students are Chinese and one-third are exchange students, most of whom are from Western Europe, but some are from India, Nepal, Germany and the Netherlands. What were the goals for the course?

The general goal was to acquaint these MBA students with the many ways that environmental management matters nowadays. I thought it was really interesting that Chinese students are now getting some of that exposure. That’s not something Chinese firms have been concerned about for a long time, so I thought it was a great sign that they wanted to offer this course. I tried to tailor it partly to the Chinese context but also to give them an understanding of how environmental issues affect companies in the U.S. and Western Europe, because that may give them some idea of what’s coming for China in the years ahead. Is there more of a need for sustainability education there?

Yes. They are just not nearly as exposed to it or familiar with it as Michigan students. For example, I asked them if they were familiar with ecolabels like “organic” or “Fair Trade,” and most of them had no clue what those are. These practices are much less advanced in China.

“For the Chinese students, the course was more about teaching them that if you’re going to operate in the Western world, you’ve got to pay more attention to sustainability than you’re used to paying in China.”

How do Chinese students’ perceptions of business sustainability issues differ from those of American students?

One way to gauge that is to look at the topics they chose for their final papers. I had them write short final papers in teams, and I’ve taught this course in various places around the world—in Switzerland and California, and versions of it at the University of Michigan. Three of the Shanghai student teams chose to study steel companies, and a fourth studied a mining company. So the environmental issues Chinese students are thinking center around mitigating the damage caused by heavily polluting industrial firms. In contrast, American students tend to be more interested in start-up companies that are creating new solutions to sustainability problems. What about awareness of environmental issues more generally?

There is a strong awareness of air pollution. In many of the big cities, the air quality is terrible much of the time, and people are very aware of air pollution as an issue. I’ve been to Shanghai several times before, and one thing that’s really noticeable now is that, about two years ago, the government passed an ordinance that says that all scooters—motorized two-wheel vehicles—have to be electric. They seem to have done a pretty serious job of enforcement, so you don’t really see the diesel-engine scooters around anymore. The Chinese government is fairly tolerant of the growing number of environmental protests, as party leaders understand they need to make huge improvements in air and water quality. And they are willing to talk about climate change as a serious issue, unlike the current U.S. administration.

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TEACHING

CASE STUDY Dell: Upcycling Ocean Plastics Through Supply Chain Innovation

BY ANDY HOFFMAN DESCRIPTION

important global driver of electrification, and the business world is going to play a crucial role in bringing that forward. What else have you learned about sustainability in China?

What does that say about China’s progress toward sustainability?

It’s still the giant, state-owned enterprises that are the focus of environmental concern in China, and they really have not yet gotten to a culture where everyday businesses feel they have to deal with environmental issues as an important issue. I think that time is coming, but for the Chinese students, the course was more about teaching them that if you’re going to operate in the Western world, you’ve got to pay more attention to sustainability than you’re used to paying in China. What opportunities do you see to bring concepts of sustainability through business in China?

One of the first things that comes to mind is food— organic food, healthy food, trustworthy food. The Chinese have had a lot of scandals with additives and dangerous things in food. For example, in 2008 there was a scandal in which melamine was added to milk and infant formula, and over 50,000 babies were hospitalized as a result. The chemical has also been found in pet food from China that has killed family pets in the U.S. Chinese quality controls are still really poor, and there’s still a lot of corruption that goes on. So Chinese people are starting to become aware that maybe they need to seek out food products— especially produce—that are healthier than what they might expect to get off the shelf at an ordinary grocery store. I think that’s one of the big areas where things can be improved. Another big opportunity is that China is making a big push for electric cars. The country will be a very

I have a colleague in Beijing, Professor Xiaoli Zhou, who was a visiting scholar at the Erb Institute in 2008/2009, and she is putting in a proposal to the Chinese equivalent of the National Science Foundation for funding on a research project looking at movement toward a low-carbon economy, trying to increase the amount of renewable energy that’s used in China and trying to understand the incentives and disincentives that are created by the current Chinese system. One of the things I’ve learned from her is that, even though China has put in place incentives to build a lot of wind turbines, somewhere around 20 to 30 percent of them are not even connected to the electric grid. Local officials are rewarded for increasing GDP, and building a wind turbine looks like it’s an addition to GDP, but officials aren’t really concerned about whether it gets used. This project would be looking at ways to change that—to increase the installation of wind and solar and to move away from coal. So you have connections with people from the Erb community in China. Did you see any other evidence of the Erb Institute’s reach during this experience?

There was a student from Nepal who came up and spoke to me after class a couple of times, and after the course was over, he contacted me about a product that he’s trying to get off the ground—a certain type of biodegradable utensil. He’s trying to find a market for them in the United States. I put him in touch with an Erb alum who had worked in Nepal for years before she came to Erb and has returned since then. She asked the Erb community for ideas about how to introduce his product to the U.S. So I got to see this Nepalese exchange student, whom I met in China, connecting back to the Erb community through an alum in Nepal— that was amazing. It shows that the Erb network really is global at this point. myumi.ch/aZVPK

This case focuses on Dell’s efforts to develop an open-source, scalable, and cost-effective supply chain capable of delivering ocean plastics waste to its production facilities, and potentially to those of partnering companies through a consortium. Piyush Bhargava, vice president of global operations at Dell and leader of Dell’s Ocean Plastics Initiative, must deliver a strategic plan for how to proceed with the initiative but has three primary challenges: (1) how to deliver “additionality,”(2) how to operationalize an ocean plastics supply chain at scale and (3) how Dell should approach developing a consortium to ensure meaningful demand for the material. DEVELOPED BY:

Daniel Partin, MBA/MS 2019, Luke Sawitsky, MBA/MS 2019, and Allison Ward, MS 2018. This case was written under the supervision of Andrew Hoffman and Ravi Anupindi.

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DOW JOINS FORCES WITH ERB INSTITUTE TO EXPAND SUSTAINABILITY LITERACY THROUGH

ONLINE EDUCATION SERIES In celebration of Earth Day, the Dow Chemical Company and the Erb Institute partnered to host the inaugural Elements of Sustainability Series, a free online education

event, with webinars posted daily for five days. The week-long webinar series explored the fundamentals of sustainability as seven renowned academics shared their expert insights on the leading global challenges shaping the future of business, society and sustainability. “Our aim is to educate and empower participants to think critically and creatively about sustainability’s role in all aspects of their life, whether it be within their organizations or their homes,” said Erica Ocampo, sustainability strategy manager for Dow Consumer Solutions and organizer of the webinar series. “The more people who actively incorporate sustainable thinking into their everyday lives, the greater chance we have to create long-lasting positive change.”

Webinars shared the presenters’ unique perspectives, experiences and research in sustainability and business. They included:

Decision-Making for the Triple Bottom Line, presented by Dr. Joe Árvai, University of Michigan

A Brief History of Sustainability and

presented by Dr. Andrew Hoffman, University of Michigan

Business Transformation, presented by Dr. Sara Soderstrom, University of Michigan, and Reducing Environmental Impacts Using Life Cycle Assessment, presented by Dr. Jeremiah Johnson,

NC State The Follies of Neoliberalism: A Sustainability-Oriented Approach to Business and Society, presented by Dr. Tima

Bansal, Ivey Business School Climate Change: How to Tackle a Wicked Problem, presented by Dr. Daniel Vermeer, Duke

University, and Consumer Perceptions and Behavior, presented by Dr. Kaitlin Raimi, University of Michigan

The Next Phase of Business Sustainability,

Dow’s partnership with the Erb Institute aims to serve as a catalyst for sustainable growth and innovation, demonstrating its mission to join forces with like-minded institutions as part of Dow’s 2025 Sustainability Goals. “The webinar series highlights the importance of collaboration between sustainability and business leaders,” said Joe Árvai, director of the Erb Institute and a presenter. “This is another important step towards fostering a culture of idea sharing across both communities.” myumi.ch/aMNAz

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Dow Sustainability Academy at the Erb Institute BY TERRY NELIDOV Managing Director

he world’s most innovative, customer-centric, inclusive and sustainable materials science company, “New Dow” is setting the bar high in reinventing this globally recognized brand. “New Dow” is the internal name tag for the company’s Materials Science division, which is one of three planned spinoffs from last year’s DowDuPont merger. New Dow, with nearly $44B in 2017 pro forma revenue, aims to be nothing less than the “premier materials science solutions provider.” But is this fiery new ambition too high of a bar for a legacy company with—as some would argue—a traditional management culture and a renowned engineering mindset? The Dow Sustainability Academy has given me reason to rethink old assumptions. If anyone can bring this ambition to life, it’s the upand-coming sustainability leaders who have been the inspiration for—and target of—the Dow Sustainability Academy over the past 18 months. The Dow Academy is a partnership among Dow, the Erb Institute and Ross Business School’s Executive Education Program. Now in its third edition, each cohort brings together roughly 40 Dow employees every six months for a four-day sustainability boot camp covering the science, business, policy and

decision-making of sustainability. The most recent academy took place July 10-14 in Midland and Ann Arbor, focused mostly on North American employees, with a few liaisons from the company’s South American, Asian, African and European operations as they expand the program globally. Erb Faculty Director Joe Árvai works with Dow’s program manager to design each academy, and then recruits a multidisciplinary team of instructors from across the University of Michigan—including professors from Ross, the School for Environment and Sustainability, College of Literature, Science and the Arts, and the Ford School of Public Policy. What’s unique about the Dow Academy is that, unlike most exec-ed training, implementation is baked into the program itself. After the week of learning, employees return to their jobs but immediately begin applying the tools and insights to practical team projects across a broad range of Dow divisions, functional areas, product lines and geographies. Each project, sponsored by a senior Dow leader, is designed to support delivery on one of the Dow 2025 Sustainability Goals. Six months later, the cohort reports on their work to Dow’s chief sustainability officer and other senior business leaders in Midland and shares their tips and lessons learned with the incoming cohort, who head to Ann Arbor that day to begin their training.

I’ve been an instructor in three academies and have heard project stories from two completed cohorts. What stands out for me confirms the old adage that people (still) matter! Even in this epoch of virtual collaboration, accelerated technology and big data, it’s people who get things done, working with other people. With each new cohort, we keep hearing that some of the project teams’ greatest sustainability challenges are actually people challenges—how to get things done in large, complex, global organizations with distributed leadership, dotted-line reporting, and real human beings making decisions. While each academy dives into the technical aspects of sustainability analysis and business strategy— from life-cycle assessment to systems thinking and environmental policy—we complement those technical skills with an equally deep dive into management and the human condition, including sessions on leadership and influence, change agents, stakeholder engagement and harnessing people’s natural biases for better management decision-making. New Dow’s ambition is an inspirational one, and these New Leaders can bring it to life. myumi.ch/6pWYO

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Erb Sustainability Management

TOOLBOX SERIES

ENV

Materiality Assessment

Human Rights Risk

TRIPLEBOTTOM-LINE DECISIONMAKING

Metrics + Reporting

Stakeholder Engagement

IRO

E SU

Sustainability Strategy

Global Value Chains

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

Conceptualized around the Erb Sustainability Life Cycle, our toolbox series springs from a stakeholder-based view of the firm, which elevates the interests and expectations of a broad range of stakeholder groups (not just shareholders) in company decision-making. The toolbox series begins with Stakeholder Engagement, which provides a framework for mapping stakeholders and identifying their key interests and expectations around the company’s sustainability impacts. Next, the Materiality Assessment and Sustainability Strategy toolboxes prioritize stakeholder issues against business drivers and craft a coherent sustainability strategy around a small set of strategic pillars. Global Value Chains extends sustainability strategy from corporate HQ out to

complex, remote and often opaque global value 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. Metrics + Reporting closes the loop, bringing GRI principles to sustainability reporting and crafting a coherent plan for authentic communication back to stakeholders, around the very issues and concerns that the toolbox series started with. Last, Triple-Bottom-Line Decision-Making is the lynchpin toolbox that applies Erb Faculty Director Joe Árvai’s signature decision-analysis framework to goal-setting, decision-making and feedback loops across all of the toolboxes. myumi.ch/6xNjz

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TOOLBOX SERIES

SUSTAINABILITY LANDSCAPE SURVEY AND ASSESSMENT

S U S TA I N A B I L I T Y L A N D S C A P E A S S E S S M E N T:

SOCIAL SUSTAINABILITY

The Erb Institute is excited to share the release of two new companion pieces designed as a preface to its series of toolboxes: Sustainability Landscape Survey: Corporate Environmental Responsibility and Sustainability Landscape Assessment: Social Sustainability. In contrast to the deep-dive toolboxes, these documents offer a high-level view of both the social and environmental issues businesses face. Both of these resources offer ideal starting points and topical insight as excellent preparation for embarking on the Erb Institute toolboxes. As the next step, toolboxes provide the frameworks for response to these social and environmental issues, once identified, and approaches to manage sustain-ability issues in company strategy and operations.

Mary Kate Richardson (MBA 2019), Amelia Adams (MBA 2019) and Zach Friedman (MBA/MS 2019)

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Salmon farming and sustainability in Chile Q&A with Erb student Zach Friedman A team from the Ross School of Business immersed themselves in the salmon farming industry in Magallanes, in the Patagonia region of Chile. As part of their multidisciplinary action project (MAP), they worked to identify the qualities that make salmon from this region unique and to make recommendations on marketing strategy. They worked with the Asociación de Productores de Salmón & Trucha de Magallanes A.G., a trade organization that includes six production companies. Zach Friedman (MBA/MS 2019) was one of the students, and he talked with the Erb Institute about his team’s consulting project. WHAT WAS YOUR TEAM BROUGHT IN TO DO?

We worked with an association of salmon farming companies, helping them to develop a unified marketing strategy to sell their salmon in the U.S. as a premium product that is distinct from salmon elsewhere in Chile. We spent a month in the Magallanes region, understanding what makes this region so unique and special, and researching what attributes consumers seek and appreciate in their salmon—and identifying the overlap and the gaps for producers in this region to position their salmon appropriately as a premium product. HOW DID SUSTAINABILITY FIT INTO THE PROJECT?

Part of the reason these producers want to distinguish salmon in their region from salmon that comes from the rest of Chile is that, historically, Chile does not have the best reputation for sustainability practices. So we worked to identify potential issues in the Magallanes region, and our final recommendation

included ways these six producers can work together to address sustainability issues there and also become leaders in the salmon farming industry globally on some issues of sustainability. For example, farmed salmon traditionally is shipped packaged in Styrofoam boxes, with each fish in its own box. So, for producers in this region who want to position their product as premium and on par with some of the most responsibly produced salmon in the world, we recommended that they invest in packaging innovation, to move away from Sytrofoam and adopt more sustainable packaging. Other issues related to the use of antibiotics. Historically, the overuse of antibiotics has been an issue for Chile, so we recommended that the six producers work together to develop standards for their production so that they can, as a group, manage their collective practices in a sustainable way. WHAT DID YOU LEARN FROM THE EXPERIENCE?

I learned a lot about just how complex and difficult change within an industry can be. This was an association of just six producers, but each has its own unique priorities and objectives. Even though they shared the same goal, it was challenging to balance all of their priorities. I can only begin to appreciate what sorts of challenges arise when doing this at larger scales. DID THE EXPERIENCE CHANGE YOUR PERSPECTIVE OF SUSTAINABILITY ISSUES IN BUSINESS?

One broader lesson I learned was that it may seem easy to label something as sustainable or not sustainable in a vacuum. But none of this exists in a vacuum, and the more we zoom out, the more complex these systems and their effects on the planet become. For example, there’s a compelling argument that salmon farming is a good thing, because stocks of wild fish in the ocean are being depleted, and aquaculture helps protect those stocks. There’s an argument against that: that aquaculture—especially

when you have fish that are not native to a region— can jeopardize the local ecosystem. Now, another argument in favor is that the more available and accessible salmon is, perhaps the more people turn to it as an alternative to beef—and the environmental impact of beef production is worse. However, the benefit of reducing beef production is mostly concentrated in the U.S., and, in this case, salmon production is concentrated in this remote region of Chile—so the benefits of eating more salmon and the threats it causes are felt in different parts of the world. It’s difficult to determine what the trade-offs are, which communities benefit and which take on all the risk. These are complex issues, and they’re global. WHAT ELSE STUCK WITH YOU FROM THE EXPERIENCE?

We had the chance to see firsthand how unforgiving the labor in this industry is. We visited a sea farm, situated offshore about an hour-and-a-half boat ride away from port. There was a storm, and we ended up in this farm for 14 hours, suffering from sea sickness, trying to leave on one boat and having the engine break, and then getting on a boat with the workers who had just completed their harvest and were trying to sleep. It was very much an imposition to have seven extra people on their vessel, but they showed us such hospitality. It instilled in our whole team a deep appreciation for all of the difficult labor that goes into making sure people have fresh salmon available. Also, I was not ready for just how beautiful the Patagonia region is. We had the opportunity to visit Torres del Paine, the preeminent national park in Chile, and it is one of the most beautiful landscapes I’ve ever seen. HOW DO YOU FEEL ABOUT WHAT YOUR TEAM ACHIEVED?

We realized that this project was the beginning of the leaders of this industry bringing together all of the major actors to begin to work toward collective action—toward addressing the root problems. It was exciting for us to realize that we were working with them on the cusp of this action. myumi.ch/JWM9Y

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Entrepreneurship, empowerment and papaya AN ERB IMPACT PROJECT IN ECUADOR BY CHRIS OWEN, MBA/MS 2020

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The women of Casa María Amor are indeed courageously taking on life’s next challenge. They are fighting for a better future.

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Laughter. This is the sound that will forever remind me of my week in Cuenca, Ecuador, with the women of Casa María Amor. It was the first day of our two-day Women’s Entrepreneurial Empowerment Workshop. As an introductory ideation activity to demonstrate the concept that all of us are creative, I charged the women with the task of building a prospective client for their micro-enterprises out of a piece of fruit. To their immense amusement, out of my bag I pulled a giant papaya, pineapple, mango and babaco, along with a mountain of assorted candies. Airheads quickly became ears and eyebrows, marshmallows morphed into arms and legs, and Twizzlers became mustaches and toupees. For 15 minutes, 16 grown women giggled like schoolgirls as they brought “Señora Papaya and Señor Mango” to life. When Señorita Piña toppled over due to her stilt-like legs, the room erupted in laughter. Each team then shared the story of their client. What was his or her profession? What were his or her needs? What are the skills the women have that could serve this client’s needs? This last question reinforced another core concept of the workshop: We all have something of value to offer others. For women who have been physically and emotionally abused, this can be a dangerous idea. Casa María Amor is a women’s shelter hidden on the outskirts of Cuenca in a crevice of the Andes Mountains. It provides both physical and emotional safety to women and their children who are the victims of domestic violence. The goal of this Erb Impact Project was to equip these women with the resources, skills and confidence they need to create economic independence for themselves, which, in turn, may provide them the freedom and power to leave their abusive partners. My counterpart and I organized this project into three interlocking initiatives. First, we created the Women’s Entrepreneurial Empowerment Center, which provides a physical space for the women to develop ideas for their micro-enterprises. With financial support from the Erb Institute as well as 25 GoFundMe sponsors, we were able to convert an old office into a fully functioning ideation center. Second, we assembled five entrepreneurship start-up kits, each of which included a laptop, two whiteboards, several notebooks, markers and other design-thinking materials. These kits will operate like mobile learning labs, allowing the women to build their businesses on the go. And, third, we celebrated the center’s launch by hosting the Women’s Entrepreneurial Empowerment Workshop, the first of

what we hope will be many hands-on training sessions in business design, computer literacy and valuable vocational skills. As a means to tie these three entities together, a community bank was formed to provide investment capital, accountability and encouragement to the women as they become champions of change. A quote by Eleanor Roosevelt, which now hangs in the empowerment center, best summarizes this aspiration: “You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You are able to say to yourself, ‘I lived through this horror. I can take the next thing that comes along.’” The women of Casa María Amor are indeed courageously taking on life’s next challenge. They are fighting for a better future. They are filling the world with laugher. And while in Cuenca for a week, I was honored to strive and fight and laugh with them. This project was made possible through the generous support of the Erb Institute, Nicholas Nguyen, Peace Corps Ecuador, Fundación María Amor, 25 GoFundMe sponsors, Partners Worldwide, Michigan Business Women and Michigan Business Women Allies, and the University of Michigan School for Environment and Sustainability. myumi.ch/JlAmp

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BY PAULA LUU MBA/MS 2019

The hundred people behind your favorite pair of jeans

ave you ever stopped to think about how many people were involved in making the clothes you buy? Chances are you have heard about or read The

Travels of a T-shirt in a Global Economy or listened to Planet Moneyâ&#x20AC;&#x2122;s piece on making a t-shirt. Both are incredibly interesting examinations of the effects of global trade on the fashion industry, developing countries and garment workers.

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Before I set off to start my MBA/MS program through the Erb Institute in 2016, I wanted to pull the curtain back on the apparel industry and see how my clothing was made. I spent that summer in Vietnam and India working with Asmara International, a forward-thinking global fashion company that designs clothes and also serves as a middleman between international apparel brands and manufacturing factories all around Asia. I visited several manufacturing factories and spoke with general managers and chemical suppliers to those factories. What I thought was a pretty straightforward process of producing a pair of jeans turned out to be anything but.

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“[W]e can go beyond individual acts of consumption to contributing to a broader collective reform by asking our favorite clothing brands, ‘Who made my clothes and under what conditions?’”

What struck me most was the sheer number of people involved in producing a single garment. Every step— from weaving the fabric, to designing the garment, to sewing it together—involved dozens of people. I estimate that at least 100 people directly touch any piece of clothing you buy off the rack. And because it took me understanding that to begin to make more thoughtful decisions about the brands and clothes I bought—and the frequency in which I bought them—I want to share a snapshot of the processes and people behind your favorite pair of jeans. FROM FIBER TO FABRIC

Your favorite pair of jeans likely contains cotton and another fiber like elastane that gives it a little stretch. You’d be hard-pressed to find a closet nowadays that doesn’t contain some cotton. Nearly 40 percent of all fiber produced in the world is made of cotton, which is grown from seed by farmworkers in any of the 58 countries that produce cotton. Over 60 percent of the world’s cotton is produced by an estimated 40 million small farmers, 99 percent of them in developing countries. The elastane fibers in your jeans help keep their shape and are made by manufacturers that spin petroleumbased polymers into thread. Fifty-eight percent of fabric produced globally is made of petroleum-based materials. Next, both the cotton and elastane yarns are sent to a mill to be spun into denim. At the mills, the yarns are dyed and woven together. The variety of denim washes and styles requires a precise formula of dye and solvents that help the dye stick to the fibers. Mills typically hire denim specialists, who usually have a background in chemistry, to oversee the denim wet and finishing processes. After the denim is woven, mill workers inspect every yard of fabric produced and send it off for finishing. Finally, a team of inspectors reviews the final fabric before shipping the fabric to a cut and sew factory. FABRIC TO JEANS

Once the fabric reaches the factory, it is inspected by a team to make sure there are no defects in it. From there, a team cuts the fabric into patterns for the jeans. After they are pieced, they are sent to be sewn. When most people think of a clothing factory, they think of this next step—where the article of clothing

is sewn together. By far, the people who sew clothes make up the biggest group of workers in a cut and sew factory. Garment factories in Vietnam and India range in size from less than 10 workers to more than 5,000. The factories that I visited were some of the most respected and recognized garment factories in the region. Factory managers worked hard to create and maintain positive work environments that were equitable and safe for all employees. Still, there was a clear expectation for workers to meet high quality and speed demands. In some factories, workers who didn’t meet these expectations were usually singled out publicly and put on a remediation plan. After the jeans are assembled, they are sent to the trim and notion department, where garment workers sew on buttons, snaps and other small articles. Then the jeans undergo a final “wet process” to add design effects like whiskers. During this step, a cocktail of chemicals is used to ensure the fabric’s softness, durability or design. They are washed and dried and then sent for final finishing. Sometimes, jeans are finished by hand or using sanders. Last, the jeans are inspected before being tagged, packed and shipped to the retailer’s distribution center or store. One part of the process we haven’t covered is the planning process. Before any order is placed with a factory, companies like Asmara International work on behalf of brands like Urban Outfitters to come up with a sample design with the factory. Asmara’s design team would meet with the factory’s design team to

develop samples for several brands. Several iterations of a sample may be created, and once the sample is approved, an entire production run is created, modeled after the sample. The journey a pair of jeans takes from seed to store is a long one that passes through more than 100 farmworkers, designers and factory workers. As consumers, we may be thousands of miles away from many of these people, but the impact of our purchasing choices is direct and profound. My hope is that seeing a small part of these processes and the people behind them encourages you to seek out brands that respect and support the people who make your clothes. While we can’t shop ourselves to a healthier planet, it’s important for us to align our values to our purchasing decisions. Even better, we can go beyond individual acts of consumption to contributing to a broader collective reform by asking our favorite clothing brands, “Who made my clothes and under what conditions?” After all, nothing grabs brands’ attention more or keeps them more accountable than their customers. Buying from responsible brands and demanding that all brands respect workers in the value chain are the easiest ways we can contribute to a more sustainable apparel industry. As consumers, our power is our voice and our choice. As they say, use it or lose it. myumi.ch/aK1qo

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COLLABORATING TOWARD THE GOOD LIFE A CONVERSATION WITH KEURIG GREEN MOUNTAIN’S MONIQUE OXENDER BY LAUREN BAUM, MBA/MS 2020

self-proclaimed “complexity junkie,”

Monique Oxender, Keurig Green Mountain’s chief sustainability officer, doesn’t bat an eye at tackling big, complicated issues. From the future of coffee to the recyclability of Keurig’s pods, Oxender and her team have provided innovative solutions to complex issues across the value chain—all while embodying Keurig’s signature focus on collaboration. Now, with a finger on the pulse of current trends and an eye toward the future, Oxender is leading the charge on circular economy thinking at Keurig, while focusing on building collaborations and pre-competitive partnerships that will help Keurig Green Mountain and its many stakeholders live the Good Life. In anticipation of Oxender’s panel discussions at SB18 Vancouver, we caught up with her to hear about the exciting value chain partnership and circular economy work brewing at Keurig Green Mountain. How do you think about the interplay between collaboration and circular economy? What does that look like for Keurig Green Mountain?

The only way that you can make the circular economy a reality is to have all players within the value chain involved, ranging from design and concept all the way through to consumer and then end-of-use processors or new use manufacturers. There’s a huge tie between circular economy and collaboration, and we’ve looked all across the value chain and identified who the key players, key influencers and innovators are in that space and then tried to match that with what we bring to the table to create new partnerships or join existing partnerships where we can both contribute and learn. The theme of SB18 Vancouver is the concept of the Good Life—incorporating principles of transparency and purpose into businesses. Why is collaboration important to Keurig’s own pursuit of the Good Life?

I think “good” is 100 percent defined and influenced by those surrounding you. It’s much less useful for any individual or organization to define “good” in a vacuum than it is to define it in terms of all those you impact and all those who impact you. When I think about defining what’s good for our company, for our consumers and for our stakeholders, you have to look at today and at the future. You need to look at where the company wants to go and needs to go in order to define what that path is going forward. Before coming to Keurig, I had the opportunity to work at Ford for a long time. Ford had a futurist on staff, which I thought was amazing. What an incredible resource! We don’t have a futurist on staff at Keurig, so we all have to be a little bit of futurists ourselves, not only to watch what’s going on and the trends today, but also to anticipate those trends going forward. As much as we can’t define “good” in a vacuum, we also can’t define it in a static way. It’s constantly being redefined as we move into the future. How has Keurig partnered with others to deliver on the Good Life?

When we think about partnerships, we have solutions for today and solutions for tomorrow. We have two solid examples of partnerships— investments, really—that we’ve made today so that we can deliver on this

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Good Life in the future. On the supply chain side in coffee, we collaborate with and support World Coffee Research. They are one of the few organizations working for the good of the coffee farmer, with open-source research and an open-source knowledge base. They’ve put technology directly into the hands of the farmer to be better able to handle and prepare for climate change impacts. That’s been a fabulous collaboration. On the other end of the spectrum, there’s the question of what happens on the other side of the product as it’s leaving the consumer’s hand. There’s a picture of waste management today that looks very different from what it’s going to look like in the future. There’s a great need for investment in that space as well, anticipating both consumer and manufacturing trends. So, we’re investing in the Closed Loop Fund, to look at infrastructure investments for today and innovation for tomorrow. Those are great examples that showcase how Keurig is working to deliver the Good LIfe on either end of the value chain. What about the space in between—at the employee level, for example?

There’s an important space in the middle with our own people and operations. Celebrating day-to-day and quarterly wins internally has been incredibly powerful to help our employees see the impact of what their individual actions are contributing to. One of the ways we bring it to life for them is employee source trips, taking anywhere from 60 to 70 employees a year to coffee-growing regions around the world. This helps them make that connection with the fundamental purpose of their roles. Through these trips, they’re able to understand the bigger picture of the lives they’re touching around the world. This is one of the most powerful tools we have for bringing the Good Life to bear for us. Why and how did Keurig get involved with circular economy thinking? What is the end goal?

I think that before “circular economy” was a term, we had projects that related to the concept, but they were just that: projects. Over the last five to six years, we’ve pulled back the curtain on recycling and asked, what’s really happening today, how is it happening, and what are the challenges, limitations and opportunities here? These questions are what led to the deep thinking and decision to operate in different ways within our company. Doing this led us down the path of seeing the entire value for the whole recycling and waste disposal industry and understanding the drivers—both behavioral and economic.

If you don’t understand the economics of material flows, you’re really just doing projects. Asking the right questions helped us understand what it meant to think about our business in terms of circular economy and how to help embed circularity for the materials that we’re using today, as well as for the materials we’d like to use in the future. What attracts you to this work? What keeps you motivated?

I’m a complexity junkie. That’s what I loved about working at Ford. I did supply chain work at Ford, where the supply chain is massive and there is tons of complexity. That’s what attracted me to Keurig as well. At Keurig, it was an opportunity to work in the agricultural space and also on the manufacturing side, both from a food manufacturing and appliance manufacturing point of view. There are lots of different moving pieces! I love the multiple facets and trying to put those puzzle pieces together in terms of strategies and solutions that move the bar. Speaking of moving the bar, what other companies and brands are doing a good job of incorporating the Good Life principles into their business practices? What companies do you admire?

I want to give a callout to all the B2B companies in this space. A lot of times, I think we just keep circulating the same brand names and the same Fortune 50 companies. But the reality is, more and more B2B companies are wanting to get ahead. I look at our own supply chain and the collaboration between Falcon, a coffee importer, and Great Lakes Coffee, a coffee exporter out of Uganda, who together have done such a fabulous job at driving for transparency and purpose—the Good Life—in their work in that supply chain for coffee, a space where there was not a lot of transparency. I feel like we don’t give enough airtime or credit to these amazing B2B companies for the incredible work that they’re doing and the inspiration they provide. myumi.ch/JYpEM

Asking the right questions helped us understand what it meant to think about our business in terms of circular economy and how to help embed circularity for the materials that we’re using today.”

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KELSEA BALLANTYNE

earned her MBA/MS in 2016, as part of the Erb Institute and the Tauber Institute for Global Operations. Sheâ&#x20AC;&#x2122;s now in an executive development program at Boeing, working on the 777 and 777X airplanes, and she talked with Erb about her work there.

TAKING OFF AT BOEING

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Could you tell us about your role at Boeing?

I’m in the Tauber/LGO Executive Development Program. It’s a 6-year rotation—I rotate every year— and currently, I am a leader in Boeing’s 777/777X program. I work with the Composite Wing Center (CWC) building the new, state-of-the-art wing out of carbon fiber. I specifically work with mechanics, engineers and leaders to define and create the standard production process to build the wing. Building each component in a standard method reduces safety issues, reduces waste, increases quality, increases production rate and ultimately empowers our mechanics to define the best way to build the airplane. It has been amazing to have the opportunity to build a brand-new team, define the strategy and get buy-in from all stakeholders utilizing a systems thinking perspective and design thinking methods. We have been so successful with the 777/777X that this process is now being replicated as the enterprise standard for Boeing’s other commercial airplanes. How have you helped the company reduce waste and recycle materials?

Our 777X wing is made completely of carbon fiber reinforced polymer (CFRP). The technologies and structures around recycling CFRP are nascent. So, in 2015, during my summer internship for Tauber, I defined and developed the system for the CWC to be Zero-Waste-to-Landfill (ZW2L) with CFRP. Boeing actually implemented the plan, including key technology development and partnerships with external recyclers. As a side project, I now lead the team that supports this process, and we have been ZW2L for our first year of production. We also have sustainable partnerships to continue this forward for the CWC. Boeing is planning to expand our ZW2L to all of our CFRP sites. This is also a process that has been integrated into the core way we do business instead of a side project. What have you learned from your work at Boeing?

I am a leader in operations, working down on the shop floor, and not in a specific sustainability role. I’ve found that it is powerful to be engaged in the main business and then bring in sustainability initiatives. This allows me to utilize my leadership for good no matter where I am in the company.

It has been amazing to have the opportunity to build a brandnew team, define the strategy and get buy-in from all stakeholders utilizing a systems thinking perspective and design thinking methods.”

I have also learned that low-stakes piloting of ideas and capturing the impact with real data is much more effective than sitting around in a room talking about why something will or will not work. This creates real stories and examples that can be shared to change a culture or convince leaders to change. How have you put your Erb Institute education to use?

My systems thinking class with Tom Gladwin really opened my eyes to looking at how everything is connected—this has served me very well in a company as large as Boeing. At the School of Natural Resources and the Environment, I was in the Behavior, Education and Communications (BEC) track, and we learned a lot of behavior change models. Now, a lot of my work involves changing behavior. Andy Hoffman’s class, Strategies for Sustainable Development, allowed me to develop my own philosophy about how to create change from within large corporations and also how to look at large shifts in markets. I have used this philosophy daily in my work, and it is also my North Star, keeping me aligned to my purpose while in a large corporation like Boeing. I also was his graduate student instructor and loved seeing the cases being discussed.

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What else do you draw on from your University of Michigan experience?

Today, I’m growing and leading a team. I did this a lot in grad school, albeit with lower stakes. Because I was able to experiment, I’m more comfortable leading confidently in my current role. I also implement a lot of the techniques and activities I learned in the Center for Positive Organizations with my current teams. Being an Erb Coach taught me a ton of invaluable skills that I use all the time with my current team, and even while “managing up.” The reality is that as a leader, people come to me with life stuff and work stuff, and I know how to effectively listen and help them because of the skills I learned and was able to practice through Erb Coaching. The Erb community is invaluable! Since leaving Ann Arbor, they have continued to be some of my closest friends. I know that no matter where we live, there is a good Neighb-Erb nearby. Even if they aren’t nearby, we will always make an effort to see one another. We Erbers seem to have common perspectives that make talking about things—both work and personal—truly natural and awesome! (We also always have the best food.) What else do you think the Erb community might want to hear about your experience?

I had a very non-traditional background coming into Erb and Ross. I was an entrepreneur in India and Tunisia for many years, and I thought I wouldn’t be competitive or interested in working at a large corporation. Completing MAP at Amazon, doing my Tauber project at Boeing and honing my philosophy and strategy in Hoffman’s class gave me the confidence that I can make a difference at these large organizations; now I am making a difference every day. I have learned that my passion combined with everything I learned as part of my Erb experience absolutely prepared me to be a great leader and influencer at a large organization like Boeing. I move the needle for sustainability through being a part of the core business. Large organizations have large impacts, on both environment and people. My role is to make these impacts positive. myumi.ch/aZeBp

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GREENING FINANCIAL SYSTEMS FROM A UN ENVIRONMENT PERSPECTIVE Erb alumnus Marcos Mancini, MBA/MS 2012, is a country coordinator

with the UN Environment Inquiry Into the Design of a Sustainable Financial System. He talked with Erb about the inquiry’s work and the sustainable finance issues involved. Could you tell us a little about what the UN Environment Inquiry team does?

The Inquiry Into the Design of a Sustainable Financial System was set up in 2014 with the objective of advancing options to improve the financial system’s effectiveness in allocating capital to sustainable investments. It is not the only UN environment team working in the sustainable finance field—the UN Environment Program Finance Initiative works as an association of finance institutions on how to factor sustainability considerations into their lending, investment and insurance decisions. The inquiry, however, was launched to look at the broader architecture of financial markets. What are the rules of the game, and how do they need to change for the financial system to deliver on its true purpose—to finance a sustainable transformation in the real

economy? If we are committed to the environment and the 2030 agenda, what are the roles of central banks, financial regulators, stock exchanges and credit rating agencies when looking at the broad architecture of the financial market? What are the inquiry’s main areas of focus?

The inquiry has worked on three verticals: One is country engagement. We have worked in more than 20 countries with different financial market regulators, looking to see what actions they can take to green the financial system within each market—and also broader, more encompassing market regulators or actors such as the World Bank. Another vertical includes specific topic dives, such as how digital finance can be a vehicle to enhance the mobilization of sustainable capital more effectively. The third vertical is policy, more particularly in fora like the G20 or G7. Broadly, the inquiry has produced over 120 briefings and reports on sustainable finance (see http://unepinquiry.org). Under the G20, we are the secretariat for the Sustainable Finance Study Group (SFSG). Officially launched during China’s G20 presidency as the Green

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If we are committed to the environment and the 2030 agenda, what are the roles of central banks, financial regulators, stock exchanges and credit rating agencies when looking at the broad architecture of the financial market?”

market: We’re working to deliver a set of guidelines for green, social and sustainable bonds. Could you tell us about your work with Mexico as well?

Finance Study Group, it changed its name under Argentina’s G20 presidency, recognizing the pressing need to address social issues alongside environmental ones. Co-chaired by the People’s Bank of China and the Bank of England, the SFSG is the first group within the G20’s finance track that looks to identify institutional and market barriers to sustainable finance, and based on country experiences, develop options on how to enhance the ability of the financial system to mobilize private capital for sustainable investment. What does your day-to-day work entail?

It varies with the G20 cycle. Because we act as secretariat for the SFSG, a lot of the role has been in helping Argentina develop the agenda and then socialize that agenda with the G20 countries—and then understand the different countries’ positions and perspectives. This includes where the different pain points are and the different risks on the agenda that Argentina is looking do to consensus on. Within our G20 engagement portfolio, we are also knowledge partners for the Climate Sustainability Working Group, where UN Environment is developing an input paper on the alignment of climate finance to the G20 members’ nationally determined contributions (NDCs). This is what actions development financial institutions can take to align their financing more with the NDCs from the Paris Agreement. Locally, in Argentina’s financial markets, we are helping the capital markets regulator develop the bond

Prior to joining UN Environment, I was head of sustainability and responsible investment at Grupo Financiero Banorte (GFNorte), the second-largest financial group in Mexico. GFNorte is a well-diversified financial group, and I was lucky enough to be able to understand and drive sustainability initiatives across the financial sector. Actively engaging with Mexico’s Banking Association, I promoted and influenced the 20 largest banks in Mexico to sign and adopt the association’s sustainability protocol. I understood that to advance the sustainability agenda within the bank and keep GFNorte at the forefront of sustainable finance, I needed to drive a more systemic effort in the Mexican financial system. I was therefore involved in advancing a sustainable finance agenda through the Mexican Stock Exchange and with market regulators. This breadth of engagements, once I transitioned into the inquiry, allowed me to continue engaging with Mexican financial regulators. I am currently working with the Mexican Central Bank to implement last year’s recommendations of the SFSG, which were on environmental risk analysis and the use of publicly available environmental data. How has your Erb Institute education come into play?

In several ways. My background is in biology, and after college in Argentina, I started working in environmental consulting, on environmental impact assessment studies in big infrastructure projects in the energy industry. There, I understood the importance of having a business acumen. But as a biologist, I didn’t have that, nor the financial knowledge, so I started looking at master’s programs

that would help me build my financial skills and business acumen. I ended up at the Erb Institute because of the network that it has. It has helped me bridge these two worlds—the financial world and the sustainability world—that weren’t talking to each other that much until a couple of years ago. What is one of the biggest lessons you have learned with UN Environment?

Understanding the different world views around sustainable finance and how people think about change, taking into consideration their own country experiences. Also, understanding the political nuances and leadership imprints that drive the countries’ foreign relations and how to adapt to those realities to try to promote the sustainability agenda in a politically sensitive context. How has your perspective shifted?

From micro to macro. In Mexico, I was looking at the relations from a network of actors in a small system where most people knew each other. It is very interesting to try to understand how to nudge the system from an international perspective. This is where I think the inquiry has made a difference— we have managed to nudge the system. What is one of the challenges you face?

It always comes down to people and finding the right sustainability champion. There are, of course, more technical aspects, such as maturity mismatches, but if you have people with the will to act and address the sustainability agenda, those can be tackled. This is what’s exciting about the increasing Erb network. We are either having alumni become these change agents or we are closing down the degrees of separation to the people that we need to influence to make change happen. myumi.ch/aG7np

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

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