The Erb Institute for Global Sustainable Enterprise University of Michigan
Y e a r i n Re v ie w 2 0 1 3
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Climate & Energy 4 Health 12 Water 18 Food 26 Built Environment 32 Business Sustainability 38
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Erb Institute Year in Review 2013 Faculty Director Andrew J. Hoffman Managing Director Terry Nelidov Editorial and Project Lead H. Dominique Abed Designer Savitski Design Writer Claudia Capos
Deans Alison Davis-Blake Edward J. Frey Dean, Stephen M. Ross School of Business Stephen M. Ross Professor of Business Marie Lynn Miranda Professor and Dean School of Natural Resources and Environment
From the Faculty Director
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his has been an exciting year of change and growth for the Institute with Terry Nelidov coming on board as Managing Director. Terry brings impressive experience working directly with businesses on issues of sustainability; he brings an international focus and a strong interest in the social dimensions of sustainability—all of which are critical areas for our future growth.
Our portfolio of Erb Institute branded case studies is growing impressively. With many written by students, these are being used by schools all around the world, including some of our peer programs. As of September 2013, GlobaLens had sold over 3,600 copies of Erb cases! Additionally, we successfully got a case into the Ross operations core—REI rentals. World Environment Center Fellows have participated in three conferences so far with one to go. We are particularly grateful to IBM for funding this program which supports Erb student “Fellows” to help organize, attend, and write up WEC conferences as blogs and white papers. We also had a little fun with the Climate Change Communication Challenge, where student teams from across campus submitted 30 to 90 second Public Service Announcements on climate change. If you have not seen the winner—Go Green with Eloise—I urge you to check it and the other winners out on our web page. We now number around 325 alumni and expect to hit 400 by 2016; nearly three times as large as the next largest dual degree program with alumni outreach. We organized four Roadshows (Boston, New York, Washington and San Francisco) to better connect with our great alumni and bring the Erb message to business leaders around the country.
This past year, we said goodbye to our founders; Fred Erb passed away on January 10, 2013 and Barbara Erb passed away 11 months later on November 8. The entire Erb community mourns their passing and I am personally grateful for the outpouring of affection that was displayed and published in a remembrance book for the Erb family. This coming year, we will sadly bid Tom Gladwin the best in his retirement from his position as the Max McGraw Chair at the University of Michigan. This is a milestone and I hope he will not go far. I can still remember his electrifying lectures when I was a graduate student in the early 1990s. He has certainly left a mark on the field and we are grateful for it. We are looking forward to even more great things in the coming months. We began writing our five-year strategic plan in January. I ask you to stay tuned and hope you will stay involved as we help your Institute grow to new heights of sustainable impact.
Andy H o ffman Holcim (US) Professor of Sustainable Enterprise Director, Erb Institute University of Michigan
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As he takes the helm, we can list many accomplishments over the past year: Tom Lyon has assumed the role of Associate Director of Research; Kim Wolske is doing great work as Research Management Fellow, conducting projects with NREL and the Graham Institute Fracking Integrated Assessment; and we have 2 new post-docs this year (Liane Lefsrud and Ethan Schoolman), thanks to co-funding by the Dow Post-Doctoral Fellowship Program administered by the Graham Institute.
We hosted the Michigan Energy Future’s conference in the summer of 2013, thanks to the great work of Tom Catania, our Executive-in-Residence. And Tom is working to arrange two more energy conferences this coming year, helping the Institute become a player in critical business and sustainability debates. And we continue to produce an amazing amount of material and content in multiple forms (Institute Reports, Masters Project Book, blogs and white papers) thanks to Dominique Abed as Communications and Brand Manager. With the help of Jackie Ganfield, Marketing and Student Affairs Assistant, and Michele Thomas, Administrative Assistant and Events Coordinator, the Erb team has been producing great work and I am very proud of them.
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For Erb’s new managing director, it’s global 24/7 By Kevin Merrill
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ven though ‘Global’ is part of the Erb institute’s name, its new managing director says it must become part of the DNA of its students.
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Terry Nelidov knows something about global. He speaks four languages (English, Spanish, Portuguese and Guarani from Paraguay) and has worked for companies and organizations in North America, Central America, Europe, and Asia. In his new job, a primary focus will be on strengthening the Erb Institute for Global Sustainable Enterprise’s already strong international reputation. “The institute is global now in its mission and its perspective. I think the challenge is how do you drive that global mission down to the key areas of research and teaching, and then to business partnerships,” Nelidov said. “It’s not easy to do.”
“We sit down with executives and we’re still making the basic business case why, why social impact matters and why environmental stewardship, what climate change is and how to develop a climate change strategy, issues like governance and human rights,” Nedilov said. “And so I was excited to have the opportunity to step back, so to speak, in the value chain to the executive program, and participate in introducing all of these same core issues, but much earlier on.” He joined the University of Michigan from Hong Kong, where he was based for Business for Social Responsibility. BSR is a 250-member network of companies focused on making the business case for sustainability. Before that, he spent nearly two decades in business and development in Latin America. He was country representative for Catholic Relief Services in Peru (the overseas development agency of the U.S. Conference
“The institute is global now in its mission and its perspective. I think the challenge is how do you drive that global mission down to the key areas of research and teaching, and then to business partnerships. It’s not easy to do.” To do so means even more focus on how business is taking place in emerging economies such as China, Indonesia, and Brazil, and on the issues that companies and industry organizations are struggling with in all markets, such as access to water. Of course, there is another challenge: convincing even more companies about the value of sustainable business practices in the first place.
of Catholic Bishops), where he worked on development issues, including corporate social responsibility and mining issues. His Latin America experience began with the U.S. Peace Corps, where he was assigned to Paraguay. He later worked at the INCAE Business School in Costa Rica; facilitating startup of a land development company in El Salvador; and consulting assignments in Ecuador, Honduras, and Dominican Republic. He has an undergraduate degree in industrial engineering from Stanford University and an M.B.A. from IESE, the graduate business school of the University of Navarra, in Barcelona, Spain.
Founded in 1996, the Erb Institute operates its own research and outreach programs. It also provides services to and enriches the educational experience of students from SNRE and the Ross School of Business dually enrolled in the M.S./ M.B.A. program. These students, including the 72 currently enrolled and another 330 alumni around the world, are often referred to as “Erb-ers”.
Stewards: What are some new ways to advance the idea of ‘global’ in the operations of the institute?
Q: What contribution does SNRE make to that effort, and in general to the Ross-Erb partnership? A: When you think about really complex social, environmental governance, economic problems, you have to think in terms of systems thinking. It’s not just one company acting alone or even an industry, and it’s not through just one or two variables. It’s really understanding the interrelationships between all the variables. And I think SNRE thinks a lot about that in terms of earth systems. So when you ask what value does SNRE bring, for me that’s what it brings. SNRE brings earth systems to the discussion and I think Ross brings management systems.
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Nelidov spoke to Stewards about his new role, the Erb Institute’s place in global business, and some of the challenges and opportunities ahead:
Nedilov: It means infusing it into the materials and the dialogue and the discussion and the projects and the publications of the institute and perhaps some cross-cutting global themes. It’s not just about doing business outside the U.S. in one or two other countries. It’s about a global approach to the unique contribution that business can make so sustainability for its own interest, its own shortterm profitability and long-term competitiveness.
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Climate & Energy
Climate & Ener gy
America’s energy choices have important implications for the global climate, as well as the environment, the economy and the health of the population. The U.S. has the second-largest electricity system in the world and produced approximately 17 percent of the world’s energyrelated carbon dioxide in 2011, according to the U.S. Energy Information Administration. Petroleum (43 percent) is the largest fuel source of carbon dioxide emissions from energy consumption in America, followed by coal (31 percent) and natural gas (26 percent). While the energy sector continues to generate greenhouse gases that contribute to global warming and climate change, it also holds the key to solving these problems and reducing their impacts.
To fight climate change, the U.S. has embarked on a promising course toward a cleaner energy future. Achieving that future requires cutting carbon pollution, developing domestic renewable energy production, supporting clean energy innovation and increasing the efficiency of appliances, homes, businesses and vehicles. Great strides have been made thus far, especially in advancing solar, wind, biomass, hydropower and geothermal power generation. The National Renewable Energy Laboratory reports that in 2012, renewable electricity accounted for more than 56 percent of all new electrical capacity installations in the U.S., up from 2 percent in 2004. Ambitious goals to double the nation’s energy productivity and increase its renewable energy sources to 30 percent by 2030 offer a clear pathway to a cleaner, healthier environment and green jobs, and now appear to be well within reach.
Events
New technologies for energy generation and management coming online are poised to reshape our energy infrastructure.
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Solar, wind, smart grid, energy storage, building energy management systems, and, most of all, distributed energy are the mostdiscussed disruptive technologies entering the market on the supply side.
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A more supportive policy structure— centered on energy codes and standards, net-metering, real-time pricing, renewable portfolio standards, and stable production and investment tax credits—will help lead the market to a future where there is reliable, affordable and cleaner energy.
Grant Awards Four project proposals received funding from the 2013 Renewable Energy Scholars program, which encourages Erb students to pursue and promote promising renewable-energy ideas. The program is funded by the family of Erb Advisory Board member Jon Koch, Erb ’96, and his firm, US Renewables Group, with matching funding from Peter and Carolyn Mertz and the Erb Family Foundation. This year’s scholars and projects: Will Morrison, Erb ’15, will research and write a white paper on policy innovations related to energy-efficiency financing. Alex Papo and Ursula Jessee, both Erb ’15, will develop a business plan for a water treatment/ distribution and biodiesel-fuel production start-up venture.
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Aaron Desatnik and Ben Hamm, both Erb ’15, will research and publish an essay examining the projected carbon implications of the driverless car. Therese Miranda-Blackney, Erb ’15, will investigate and publish an article on the interplay between human and technology factors impacting the adoption of energy-efficiency products and services.
Publications Erb Institute Director Andrew Hoffman and Research Management Fellow Kim Wolske contributed to one of seven University of Michigan technical reports on hydraulic fracturing in Michigan. The set of documents, investigating different seven critical topics, was released in early September and will guide statewide decision making on “fracking,” a controversial process for extracting natural gas and oil from shale. For their report, Hoffman and Wolske investigated public perceptions of fracking. They found that a slight majority of Michigan residents believes the
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The focus on the demand side is on energy efficiency, conservation and demand response, driven in part by a desire to make the grid and its participants more resilient.
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The 2013 Michigan Energy Futures Conference drew energy, climate, regulatory and public-policy experts to the Ross School of Business on June 26 for high-level discussions about emerging industry trends and forecasts that will impact about Michigan’s energy future. The inaugural event—sponsored by NextEnergy, the Erb Institute, Growth Capital Network, Michigan Energy Innovation Business Council, 5 Lakes Energy and the Institute for Energy Innovation— drilled down on “smart grid” technologies, energyefficiency initiatives, clean-energy investment and deployment, climate change and greenhouse-gas emissions. Erb Executive-in-Residence Thomas Catania participated in a panel discussion on innovative utility system resources. Conference highlights were published in a white paper, titled “How will ‘Disruptive Challenges’ in the Electric Market Impact Michigan Energy Decisions?” The conference attendees’ key conclusions included the following:
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benefits of fracking outweigh the risks, but that significant concerns remain about the potential impacts to human health, the environment and groundwater quality. While the public tends to view “fracking” as the entirety of the natural gas development process, industry and regulatory agencies have a much narrower definition that is limited to the process of injecting hydraulic fracturing fluids into a well. According to Hoffman and Wolske, these differences in perceived meaning can lead to miscommunications that ultimately increase mistrust among stakeholders. The seven reports conclude the first phase of the two-year U-M project known as the Hydraulic Fracturing in Michigan Integrated Assessment. The project’s next phase is an analysis of various hydraulic fracturing policy options.
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Erb Faculty Affiliate Jeremiah Johnson, assistant research scientist at the School of Natural Resources and Environment, coauthored a paper, titled “Assessment of Energy Storage for Transmission-Constrained Wind,” in collaboration with Robert De Kleine and Greg Keoleian at the U-M Center for Sustainable Systems. Erb Faculty Affiliate Nigel Melville, associate professor of information systems at the Ross School of Business, and Ryan Whisnant, Erb
’10, collaborated on the article “Energy and Carbon Management Systems: Organizational Implementation and Application,” which has been conditionally accepted for publication in the Journal of Industrial Ecology. Melville also coauthored, with Terence Saldanha, an article titled “Information Systems for Managing Energy and Carbon Emission Information: Empirical Analysis of Adoption Antecedents,” which was published in the proceedings of the 2013 Hawaii International Conference on System Sciences. Joshua Newell, Erb faculty affiliate and assistant professor at the School of Natural Resources and Environment, worked with colleagues from other universities in writing “Green Alley Programs: Planning for a sustainable urban infrastructure?” which appeared in Cities, the international journal of urban policy and planning. Newell serves as advisor to U-M doctoral candidate Sara Meerow, who is specializing in Resource Policy and Behavior. Meerow collaborated with Isa Baud, a professor in International Development Studies at the University of Amsterdam, on the article “Generating Resilience: Exploring the contribution of the small power producers and very small power producer programs to the resilience of Thailand’s power sector,” which appeared in the International Journal of Urban Sustainable Development.
Climate & Ener gy
“Conventional Politics for Unconventional Drilling? Lessons from Pennsylvania’s Early Move into Fracking Policy Development,” an article written by Erb Faculty Affiliate Barry Rabe, appeared in the May 2013 issue of the Review of Policy Research. Rabe’s views on public policy approaches to reducing tobacco use in America were presented in the article “Political Impediments to a Tobacco Endgame,” which was published in Tobacco Control in 2013. Rabe is the Arthur F. Thurnau Professor of Environmental Policy and the J. Ira and Nicki Harris Family Professor of Public Policy at the Ford School of Public Policy.
Curriculum
Theo Schear, a U-M film/video and photographic arts undergraduate student, won the Critic’s Choice $3,000 first-place award for his public service announcement video Go Green with Eloise in the inaugural Climate Change Communications Challenge. The 2013 PSA competition, cosponsored by the Erb Institute, challenged students across the University campus to create short videos that would raise public awareness about climate-change solutions, encourage individual action and provide an inspirational vision of a sustainable future. Eleven teams of students submitted entries, and nearly 2,000 viewers worldwide cast votes for their favorite videos. Other award-winning entries included 25 Ways to Love Your Planet, Climate Change Isn’t About Bad Hair Days and It Doesn’t Take a Superhero. The $1,500 popular vote award went to Little Nina’s Climate Change Life, created by Yue Jiang, Yaying Tian and Ben Zhang.
Case Studies
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Climate & Ener gy
Miguel Sossa-Mardomingo, Erb ’13, and his team examine the economic and regulatory headwinds and tailwinds buffeting the advanced battery industry in their 2013 case study, titled “A123 Systems Powering a Sustainable Future: Strategizing in the Advanced Battery Market.” Michigan-based A123 Systems LLC, which develops and manufactures advanced Nanophosphate lithium iron phosphate batteries and energy storage systems, recently opened the largest hybrid vehicle battery manufacturing facility in North America. Working under the direction of Erb Director Andrew Hoffman, the students consider CEO David Vieau’s evolving strategy for moving the company forward at this critical juncture by extending its product line, breaking into new market segments or expanding in new geographic areas.
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Erb Institute students spearheaded the development of a new graduate-level business course on financing energy projects, which is being offered during the 2014 winter term at the Ross School of Business. The six-week course, Energy Project Finance, examines the economic drivers for energy investment, and introduces students to both traditional financial modeling tools and innovative new financial mechanisms used by corporations involved in energy efficiency and demand response. Erb Advisory Board member Lauren Bigelow, the CEO of the Growth Capital Network, has agreed to serve as the adjunct professor for Finance 583, which features prominent guest speakers, including EAB member Jon Koch, Erb ’96, a managing director of the US Renewables Group, and entrepreneur Jigar Shah, the CEO of Jigar Shah Consulting and author of Creating Climate Wealth. The idea for the course originated in the Ross Energy Club’s 2013 winter education series on energy, co-developed by Kathryn Newhouse and Therese MirandaBlackney, both Erb ’15, and Emilia Sibley, Erb ’14. With guidance from Erb Professor Thomas Lyon, Newhouse and Miranda-Blackney created a course description and syllabus. They also sourced potential speakers before submitting their course proposal to the Ross Curriculum Committee for approval. The timing of the new Energy Project Finance course reflects important changes occurring within the energy industry, as well as rising interest among Ross and Erb students in this environmentally important sector. Miranda-Blackney, Newhouse and John Serron, Erb ’16, who has recently joined their coursedevelopment team, believe Energy Project Finance is well-positioned to complement and augment existing energy and finance courses offered at the University of Michigan.
Competitions
Internships Erb students combine theory and practice during their internships with global corporations, nonprofit organizations and technology starup companies. Working alongside business leaders, social and environmental advocates and entrepreneurs, they help to shape and implement lasting solutions to the world’s pressing environmental, economic and social problems.
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As an Environmental Defense Fund Climate Corps fellow, Daniel González-Kreisberg, Erb ’14, designed and implemented a pilot program to help the retailer reduce its energy costs by upgrading the lighting, HVAC systems and building envelopes at Belk department stores. He estimated the energy-efficiency improvements would enable approximately 2 percent of Belk’s 300 stores to qualify for ENERGY STAR certification, reduce storewide energy use by up to 4 percent and pay back the capital investment in less than three years. González-Kreisberg managed the initial project rollout at Belk locations in North and South Carolina.
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During her summer internship at Wal-Mart Stores, Inc., Berry Kennedy, Erb ’14, helped the Walmart Sustainability Department refine the company’s global renewable-energy strategy. She analyzed worldwide business and industry conditions and assessed a new sourcing strategy to support wind farms, solar-panel installations and other projects. Kennedy also worked with stakeholders in Walmart’s international markets to advance the Energy Sustainable Value Network and streamline the implementation of renewable-energy initiatives in different countries. Adam Byrnes, Erb ’14, interned with Simpa Networks, a high-tech star-up in Bangalore, India, where he analyzed new market-entry opportunities for the company’s pioneering prepaid meter system, which furnishes electricity to lowincome households on a pay-as-you-go basis. Over the course of 12 weeks, Byrnes evaluated the competitive market landscape, business model options and financial implications for potential partners. An estimated 400 million low-income residents in India currently rely on kerosene and other types of fuel for energy.
Jenny Cooper, Erb ’15, spent her summer at the New York City Mayor’s Office of Long-Term Planning and Sustainability, where she gained insights into the implementation of energyefficiency and climate-mitigation policies. The city, which is targeting substantial reductions in its greenhouse-gas emissions by 2030, legally requires the owners of large buildings to report the annual energy and water usage of their properties. As an intern with the Green Buildings and Energy Efficiency team, Cooper crunched data collected from compliance with the benchmarking law and coauthored a comprehensive 60-page report that was published this fall. Chad Dibble, Erb ’15, pursued his interest in renewable-energy infrastructure investment and build-out during a summer internship with the Ann Arbor nonprofit Clean Energy Coalition. The coalition was engaged by economic-development organizations in the Saginaw and Bay City area to help promote regional growth of the solar industry by identifying ways to lower installation soft costs. Dibble aided this effort by researching national best practices for improving solar-installation permitting and zoning procedures. He also conducted stakeholder interviews with local government officials, solar manufacturers and installation companies. David Wang, Erb ’15, spent his summer as an Environmental Defense Fund Climate Corps fellow working at Facebook on conventional energy-efficiency projects related to lighting and HVAC systems, as well as employee engagement and organizational behavior. The social-media company was an early adopter of solar cogeneration technology, which optimizes the power of the sun by creating both electricity and hot water from a combined solar photovoltaic and thermal module. Wang evaluated systems performance and the feasibility of a potential third installation. Connie Yu, Erb ’15, leveraged her pre-graduate school experience as an energy-efficiency consultant to the utility industry during her recent summer internship at JPMorgan Chase & Co. In her role an Environmental Defense Fund Climate Corps fellow, Yu supported the investment bank’s Office of Environmental Affairs in its efforts to develop financial products and services that promote investments in energy efficiency, particularly in the commercial and residential sectors.
During his internship at San Francisco-based BluePath Finance, Will Morrison, Erb ’15, sharpened his interest and skill in identifying and scaling technologies that address critical social and environmental needs. BluePath, which provides financing for energy-efficiency retrofit projects, works with energy-industry partners to offer their commercial, industrial, agricultural and municipal customers turn-key financial solutions. Over the summer, Morrison developed a marketentry strategy for investment in Latin America. He also built and executed a customer-acquisition plan targeting channel partners in the energymanagement industry.
Jose Solis, Erb ’14, drew upon his passion for his hometown of Houston and his architectural career experience in sustainable design and building during a summer internship with McCord Development Inc. The Houston firm is developing Generation Park, a 4,000-acre, 40-million-squarefoot master-planned commercial development on Beltway 8 in the city’s northeast quadrant. Over the summer, Solis developed building standards incorporating the measurement and verification of indoor environmental quality and energy and water use. In addition, he spearheaded the development of a long-term energy master plan for Generation Park. The Erb Institu te
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Kenneth Johnson, Erb ’15, Redeploys His Afghanistan Military Experience in America to Create Sustainable Solutions
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s a U.S. Army Fire Support officer stationed in northeastern Afghanistan, Kenneth Johnson, Erb ’15, witnessed the power of sustainable solutions to uplift poverty-stricken residents, transform remote villages and build greater trust and respect. Now, as an Erb Institute student, he is redeploying his Afghanistan military experience in America to create sustainable solutions that would make healthy food accessible to underserved populations, bootstrap troubled inner-city neighborhoods and create hope and prosperity for the future.
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“I saw the impact that sustainable solutions had in Afghanistan, and I wanted to dive deeper and refine some of the skills I developed in the military,” explains Johnson, a West Point graduate who earned the Bronze Star, Purple Heart and Army Commendation Medal with Valor for his actions in combat. “Pursuing a career in the sustainability space would allow me to serve, do something interesting and make an impact on people and the environment from a business point of view.” During the 15 months he was assigned to the 173rd Airborne Brigade in Nuristan Province, Johnson managed reconstruction projects and worked closely with local Afghan contractors. The centerpiece of the American-led rebuilding effort in 2007 to ’08 was the installation of micro-hydroelectric turbines along mountain-fed rivers in three isolated villages embedded in the south of the Hindu Kush valleys.
Climate & Ener gy
“These turbines brought a renewable-energy source to the middle of nowhere,” Johnson says. “At the time, I wasn’t familiar with the concept of sustainability and didn’t understand its benefits. However, when we delivered electricity to people who had never had access to it before, the effects were really transformative. Not only did electrical power enable residents to light their homes and charge their cellphones, but it also allowed us to build better relationships with the villages, reduce American casualties and advance our mission.” Initially, Johnson’s Army experience with micro-hydroelectric power generation in Afghanistan steered him toward the study of renewable energy and transportation when he entered the Erb Institute in fall 2012. This past summer, he interned at the Dow Chemical Company, where he was aligned with Dow Automotive Systems and worked with researchers to improve vehicles’ fuel efficiency. Johnson’s “somewhat circuitous” pathway in sustainability studies took a “180-degree” turn after he enrolled in an environmental-justice course, entitled Poverty, Environment and Inequality, at the School of Natural Resources and
Environment. Class discussions centered on “food deserts” and “food insecurity” in America’s poorest communities. This struck a chord of concern, and Johnson quickly shifted gears to focus on food and agriculture. “I recalled my days in Afghanistan where I was responsible for disseminating humanitarian assistance,” he explains. “I helped to feed hungry people who were very poor, very rural and without access to food. It was alarming to learn there are people in this country who don’t have access to healthy food. I wanted to know more.” Currently, Johnson and five other U-M students, including Stephen Ahn and Connie Yu, both Erb ’15, are partnering with the U.S. Department of Agriculture on a master’s project to study the food-insecurity situation in Michigan and formulate possible solutions. Working with the Michigan Farmers Market Association and nonprofit organizations, including Ypsilanti, Mich.-based Growing Hope, Johnson is examining how market managers can help low-income families purchase fresh, wholesome food by using their Supplemental Nutrition Assistance Program benefits.
“I saw the impact that sustainable solutions had in Afghanistan, and I wanted to dive deeper and refine some of the skills I developed in the military” For the present, Johnson’s post-military career plans center on the private sector, where he would like to specialize in corporate consulting and strategic planning. He also wants to continue his community service as a board member of a nonprofit organization focused on food security. But those plans could change over the next two years if he discovers another, equally compelling, aspect of sustainability to pursue. “In the Army, I was working in a silo, so it was hard to see all the opportunities to apply my military training and skills to civilian life,” Johnson explains. “One of the benefits of Erb’s dual-degree program is that it has given me time to explore different sectors. Over the past year, I’ve been able to discover where and how I can combine business and sustainability to make a lasting impact.”
Mark Tholke, MBA/MS ’03, Works on the Front Lines of a Renewable Energy Future
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rom the offices of EDF Renewable Energy in the San Francisco Bay area, Mark Tholke, MBA/MS ’03, is working on the front lines of America’s charge toward a renewable-energy future that will usher in a cleaner, healthier, more climate-friendly era. Under his leadership as vice president for development in the West Region, EDF-RE has developed and built greenfield wind and solar projects totaling 480 megawatts of electricity.
Another up-and-coming trend in the energy industry centers on energy-storage technology. “Battery technology is important for renewables, because energy storage allows utilities to deal more effectively with the intermittent nature of wind and solar power,” Tholke explains. “Right now, there is an increase in research and development efforts aimed at building better batteries to address the energy-intermittence issue on the grid, as well the energy-storage requirements of electric vehicles.” Alternatives, such as flywheel technology, compressed-air storage and pump-storage hydro, are used for larger-scale energy-storage applications.
Tholke identifies several trends that will shape the evolution of renewable energy over the next five to 10 years. He predicts new solar project activity will be brisk in the Southwest, Northeast and selected states in the Southeast during the run-up to the expiration of the solar Investment Tax Credit in 2016. The 3 percent tax credit for residential and commercial solar systems has helped annual solar installations grow by more than 1,600 percent since it was implemented in 2006.
Tholke’s concerns about climate change and its potential impacts surfaced in the 1990s while he was working as a research assistant for a Heinz Foundation affiliate. “I became increasingly worried about climate-change trends and threats as I pored through reports from the Intergovernmental Panel on Climate Change,” he recalls. “It was an alarming wakeup call and fueled my ambition to contribute to the mass deployment of renewables.”
“However, I think the era of building massive utility-scale, ground-mount solar projects—ranging from 200 to 500 megawatts—in the Southwest deserts is coming to a close,” Tholke says. “In the future, we will see an increased number of smaller ground-mount projects, one-tenth that size, being developed in those three geographic areas.” He expects the next hot market in solar generation will be rooftop installations. “Companies have created increasingly innovative financing structures that will enable these installations to become more widespread,” he says.
Tholke enrolled in the University of Michigan’s three-year Corporate Environmental Management Program, a precursor of today’s Erb Institute program, to bolster his skills and credentials. “Michigan allowed me to test and confirm I was on the right career path for a lifetime,” he explains. “I have applied the interdisciplinary training from U-M in my daily work.” After graduating in 2003, he worked at General Electric Co. in the Wind Division before joining enXco, now an integrated part of EDF Renewable Energy, in 2006.
Wind energy will enjoy favorable tailwinds in coming years, according to Tholke. “We will continue to see the build-out of wind projects throughout the U.S.,” he says. “The majority of these projects will be developed in the Wind Corridor, which stretches down through the Great Plains, from North Dakota to Texas.”
Tholke continues to view climate change as a material threat to the welfare of humans and biodiversity. “I hope I’m wrong about this—but I don’t think so,” he says. “Even if the base case predictions for climate-change impacts come to pass, the world will be that much more impoverished. Renewable energy is a tangible contribution toward reducing the carbon loading of the atmosphere. There is an enormous amount of work that still needs to be done.”
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The lower cost of natural gas, enabled by hydraulic fracturing, has constrained the widespread deployment of renewable energy to some extent. “The good news is that the drop in natural gas pricing has hit coal technology first and foremost, which is positive from a climate perspective,” Tholke notes. “What’s more, the cost of renewables has come down considerably. In some areas of the Wind Corridor, wind energy (incentivized by a production tax credit) is less expensive than natural-gas energy. We also are starting to see evidence of grid parity for solar photovoltaics in certain areas of the Southwest.”
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“I think the goal of using renewable sources to generate 3 percent of the nation’s energy by 2030 is absolutely achievable, and at a moderate cost,” Tholke says. The National Renewable Energy Laboratory reports that in 2012, renewable electricity represented 1 percent of total installed capacity and more than 1 percent of total electric generation. Last year, wind energy and solar photovoltaics were two of the fastest-growing electric-generation technologies in the U.S. In certain states and regions, renewables sources account for a higher percentage of electricity production than the national average, according to Tholke. In areas of Texas, for example, wind energy generates more than 3 percent of the electricity on the local grid. California is now on track to get 3 percent of its juice from renewables by 2020.
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Health Climate change is impacting people’s health and well-being worldwide and posing daunting challenges for coming generations. The World Health Organization reports that
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global warming contributed to more than 140,000 additional deaths annually between the 1970s and 2004. WHO further estimates that the direct health costs of climate change (excluding costs in health-determining sectors such as agriculture, water and sanitation) will approach $2 billion to $4 billion a year by 2030. Developing countries with weak health infrastructures are most vulnerable to climate-related impacts, including rising sea levels, extreme weather events and the spread of water- and vector-borne diseases, such as malaria, dengue fever and schistosomiasis.
Erb Institute students, faculty and alumni are partnering with innovative companies, government agencies and nonprofit organizations on research and field work around the globe to help emerging nations prepare for climate effects and improve the sustainability, quality and delivery of health care. Closer to home, they are promoting greater sustainability in the U.S. health care industry and encouraging the adoption of green practices and products that mitigate climate change.
Case Studies Abt Associates: Scaling Indoor Residual Spraying for Malaria in Africa
Erb students travel to remote corners of the world to collaborate with public and private partners on cutting-edge projects that develop and advance sustainable solutions to health care problems. In 2012, Ben Chen, Erb ’14, interned at GE Healthcare in India and China, where he analyzed new market opportunities for GE’s hightech maternal-infant care products, which have
Rick Ament, the CEO and founder of SOS Partners, served as the moderator for an November 2012 Erb Speakers Series discussion on “The New Healthcare Mission: Innovating Through Sustainability.” A panel of engineers, consultants and health care professionals examined the key challenges confronting health care providers pursuing sustainability. SOS is a leading sustainability consultant for the health care industry. Peggy M. Shepard, executive director and cofounder of WE ACT for Environmental Justice, delivered the 2013 SNRE Martin Luther King Jr. Lecture on Jan. 16. Her remarks, titled “Advancing Environmental Health and Justice: A Community Perspective,” underscored the need to educate and mobilize minority residents on issues impacting their quality of life and to promote healthy, safe communities for all.
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Competitions CentriCycle, a Michigan nonprofit company working to improve health care in rural India through the use of sustainable diagnostic technology and education, won the $7,500 Erb Award for Sustainability at the 2013 Michigan Business Challenge. The winning team members were: Carolyn Yarina, BSE ’13, Alex Thinath, BSE ’13, Justin Beeker, BA ‘13, Michael Bodden, BBA ‘13, Harish Kilaru, BS ’16, and Amin Haririnia, BA ’13. Previously, CentriCycle placed as a finalist at the 2012 Accelerate Michigan Innovation Competition and the 2010 and 2012 U-M 1000 Pitches competition.
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Research Projects and Internships
Speakers
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Colm Fay, Erb ’12, and Erb faculty affiliate Ravi Anupind, examined the intersection of public health and operations in their 2013 case study, “Abt Associates: Scaling Indoor Residual Spraying for Malaria in Africa.” As an associate in Abt’s International Health Division, Fay gained valuable insights into the company’s decision to decentralize its mosquito-spraying program in Uganda by creating multiple local storage centers and hiring bicycle-riding sprayers from nearby towns and villages to treat residents’ homes. The approach succeeded in achieving a 98 percent coverage rate while reducing the total spray cycle by 40 percent and the cost per structure sprayed by 50 percent. The case underscored the importance of engaging multiple stakeholders in formulating and implementing scalable, sustainable solutions to global-health problems. Anupindi, associate professor of operations management at the Ross School of Business, incorporated the case study into a new course focused on global health delivery and access in emerging markets.
helped to advance neonatal care in developing countries. He also defined a go-to-market strategy to make these products more readily available and affordable in underserved markets, as part of an effort to reduce infant mortality at the base of the pyramid. During his 2013 internship at Roche Pharmaceuticals, Chen created a process for gathering market information on preclinical drugs in China.
Colm Fay, Erb ’12, Bootstraps Health Enterprises in Eastern Africa
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ver the past year, Colm Fay, Erb ’12, has become a bold, innovative thinker driving real-world impact on health in eastern Africa.
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His trajectory began in July 2012 when he joined Abt Associates, a global leader in research, program implementation and international development. Fay became an associate in the organization’s International Health Division and moved to its Bethesda, Md., office. The first assignment that landed on his desk was a challenging one. Abt asked him to breathe life into the HANSHEP Health Enterprise Fund, which is designed to bootstrap innovative health enterprises in Ethiopia, Kenya and Nigeria that seek to improve health outcomes in family planning, reproductive health, maternal and child health and HIV/AIDS. The fund is jointly supported by USAID and the Department for International Development in the United Kingdom. Fay immediately saw an opportunity to extend his interest in entrepreneurship and social impact to a new sphere. “This fund represents an innovative way for donors to deliver support directly to small health enterprises that normally don’t receive foreign-aid dollars,” he explains. “It is a more entrepreneurial approach geared toward giving the right kind of assistance at the right time to the right innovations.” Applicants are potentially scalable and replicable impact enterprises serving customers at the base of the pyramid. They participate in the fund’s selection process to qualify for grants and technical assistance.
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Sustainability is an overarching theme of the project work. “The fund’s objective is to bridge the gap between early stage health enterprises and impact investors,” Fay says. “We try to get these businesses standing on their own two feet and working with investors as quickly as possible, so they no longer require donor money to operate.” In June, Fay organized a health enterprise exposition in Nairobi, Kenya, and invited a short list of 50 grant applicants to present compelling elevator pitches to a group of investors, donors and private-sector representatives. During the event, panels of seasoned entrepreneurs, donors and investment experts shared their views on how to deliver health services to lowincome communities on a sustainable basis. If the expo’s format sounds vaguely like an African version of the Michigan Business Challenge at the University of Michigan, that should come as no surprise. As a Zell Lurie Institute/Erb Institute scholar in 2011, Fay helped to organize the campus-wide business-plan competition. Previously, he competed in the Michigan Business Challenge as a team member for the start-up company Wello, an award-winning social venture.
“The Nairobi expo was slightly bigger in scale, slightly larger in scope, and had greater diversity,” he remarks. “But my Michigan Business Challenge experience and the other insights I gained in graduate school are directly related to what I’ve been doing over the last year.” Fay’s solid grounding in business management and entrepreneurship at Ross and his interaction with the impact-investment community at Erb helped prepare him to lead the Health Enterprise Fund through its multiple phases: search, application, selection, due diligence, award and post-award support. The Ross and Erb network he built at Michigan also contributed to his early success at Abt. “Being able to reach out to Ross and Erb graduates with experience and networks in Ethiopia, Kenya and Nigeria has really made a big difference,” Fay says. “I’ve also used social media and other tools I acquired at U-M through my interactions with the socialentrepreneurship sector to cast a wide net and attract a diverse group of applicants.” Fay gained an introduction to Abt Associates through a Multidisciplinary Action Project assignment with the organization while he was at Michigan. He later collaborated with Erb Faculty Affiliate Ravi Anupindi to write a case study about Abt’s management of a project in Uganda to scale indoor residential spraying to prevent the transmission of malaria by mosquitos. The case debuted in a new course, Innovation in Global Health Delivery, taught jointly in winter 2013 by Anupindi and Prashant Yadav, director of the Health Care Research Initiative at the U-M’s William Davidson Institute. Fay’s decision to accept a full-time position at Abt after graduation was prompted by what he sees as the challenges and rewards of working in international health. “The challenge is no longer just about creating new drugs and technologies,” he says. “Now it’s about creating business models, organizational structures and pathways to get these innovations to the people who need them. The opportunity to use my business background and skills in an insightful way to develop some of these models and make a real-world impact was very attractive.” Simultaneously serving two worlds—large partner organizations and small, in-the-trenches health enterprises struggling to carry on their work in Africa’s slums—also has tested Fay’s mettle. But the effort is worthwhile. “The greatest reward comes when you visit a local clinic or antimalarial program site and are able to see the impact of this work on individuals and how it is making a difference in their lives,” he says.
Jenna Agins, Erb ’13, Bends the Health care Sustainability Curve
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t the Erb Institute, Jenna Agins, Erb ’13, stoked her passion for sustainability in health care and helped two major health systems frame and embrace green health practices. She also raised awareness among Erb students and the University community about the great potential health care sustainability holds for improving medical care delivery, reducing unwanted environmental impacts and providing rewarding career paths for Michigan talent.
Agins is now ready to practice what she preaches by taking a full-time job in health care sustainability. “Erb has prepared me to be a change agent,” she says. “I have the ability to go into a health care organization and bring new ideas and innovative programs, based on what I have learned at the Institute and the University.”
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Summer jobs at medical technology firm Becton Dickinson and a Ross School marketing internship at drug maker BristolMyers Squibb afforded Agins a glimpse into the vast corporate world of medical devices, laboratory equipment, diagnostic products and pharmaceuticals. She took the plunge into health care sustainability during her 2012 internship at North Shore-LIJ Health System in New York, where she collaborated with the newly appointed director for sustainability and social responsibility. “I assisted North Shore in defining its sustainability role and goals, and then developing a strategic framework and measurement/reporting system to attain them,” Agins says. “Working for the first time inside a large health system revealed its organizational complexity, and illustrated the importance of taking a multidisciplinary approach to sustainability while balancing potentially competing goals, job responsibilities and priorities.”
As a capstone to her Erb career, Agins spearheaded the organization and presentation of a mini-conference, “The New Healthcare Mission: Innovating Through Sustainability,” in November 2012. The campus-wide event engaged graduate students from multiple disciplines in scholarly and practical conversations about sustainability with St. Joseph Mercy Health System administrators, consultants from SOS Partners and nonprofit leaders from Practice Greenhealth and Health Care Without Harm. “Health care touches every single person’s life, but a lot of Erb students don’t realize its potential or else overlook it because the sector is a little daunting,” Agins explains. “I feel this is an area where Erbers can have a huge impact.”
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“Promoting sustainability in the health care industry is particularly challenging because care providers, pharmaceutical companies, device manufacturers and insurers are complex organizations that have a quadruple bottom line, including a mission to provide life-giving services to diverse communities,” explains Agins, who grew up in a family of doctors and hospital administrators. “Right now, the industry is behind the sustainability curve compared to other sectors. What’s exciting, however, is that there’s plenty of ‘low-hanging fruit’ to be had and potential for innovation, education and improvement at all levels.”
During her master’s project at the University of Michigan Health System, Agins and her teammates, including Catherine Dyson and Annie Cronin, both Erb ’14, focused on the Patient Food and Nutrition Group, where they made an analytical deep dive into its food waste management practices—including 15 hours of sorting through trash in hospital kitchen receptacles during their initial waste audit. At the conclusion of the project, the team provided health system administrators and employees with actionable recommendations and a replicable model for increasing recycling and composting while reducing purchases of extraneous materials, such as plastic lids and containers. “As students of the environment and advocates of sustainability, we were able to spark an interest among some people who had never thought much about these issues before,” Agins remarks.
Claudia Harner-Jay, MBA/MS ’98, Builds Public-Private Partnerships to Improve Global Health Outcomes
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uring her 13 years at the international nonprofit global health organization PATH, Claudia Harner-Jay, MBA/MS ’98, has come to recognize the power of public-private partnerships to solve global health problems.
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“By collaborating with the public and the private sectors, we are able to leverage different competencies, skill sets and approaches to problems, so that cross-sector collaboration can lead to more comprehensive and sustainable solutions,” says Harner-Jay, who is a senior commercialization officer at PATH. “In some instances, we are able to tap valuable resources that include in-kind contributions, such as technical expertise and a volunteer workforce. Since the sum is greater than the individual parts, we can accomplish a lot more by working collectively rather than unilaterally.”
Currently, Harner-Jay is leading a collaboration with Merck for Mothers to identify and advance life-saving maternal-health innovations in resource-poor settings, particularly in Southeast Asia and Sub-Saharan Africa. Pharmaceutical developer and manufacturer Merck & Co. launched the 10-year, $500 million initiative, which is targeting more than 20 countries around the world, including the United States. PATH has developed a Microsoft Excel-based strategic prioritization tool to assess and rank nearly 40 technologies for their highest potential to reduce mothers’ deaths during childbirth, and is making the tool publicly available. The tool scores evaluation criteria, each representing a discrete element of the technology’s value proposition and overall potential for impact.
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“We’ve been collaborating with Merck for Mothers for two years and have identified some very promising technologies,” HarnerJay reports. “We are sharing our phase-one findings with maternal-health stakeholders, as part of a joint strategy with Merck to promote investment by the broader community and to support informed decision making on where to invest limited resources to reduce maternal mortality.” See http://sites.path. org/mnhtech/assessment/tool/.
Harner-Jay’s strategic role in PATH’s public-private collaboration on global health issues was highlighted at a panel discussion last March about multisector partnerships, co-sponsored by PATH and the Clinton Global Initiative. The event launched a new policy paper she co-authored, titled “Public-private partnerships for global health: How PATH advances technologies through cross-sector collaboration.” “At PATH, I’ve focused on how to work with the private sector, how to do successful product introductions, and how to ensure access to appropriate health technologies for vulnerable populations in low-resource settings,” she explains. “We’re seeing a trend toward shared value with our privatesector partners, and this is creating a new set of additional opportunities as well as some challenges.” The systems thinking Harner-Jay learned while pursuing her joint degree at the University of Michigan continues to be an important part of her global health work at PATH. “Whenever you introduce an innovative technology, you must look at that technology in terms of its relation to the system,” she observes. “You can’t just drop it into place. There are so many elements in the system—from procurement to distribution and supply systems to how health care workers will be affected—that must be considered to make that technology successful.”
Grant Hughes, Erb ’13, Uses Entrepreneurial Ingenuity to Promote Physical Fitness
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rant Hughes, Erb ’13, and Cavan Canavan, MBA ’12, the co-founder of Focus Solutions, are using entrepreneurial ingenuity to help Americans get into better shape and improve their overall health. Their Michigan-minted start-up company has developed the Focus digital personal trainer, an innovative product that utilizes a high-tech wristband and a smartphone application to help physical fitness enthusiasts track, evaluate and guide their workouts.
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Canavan hatched the concept for Focus in 2012 and hired two Michigan electrical engineering students to develop the initial prototype and proof-of-concept algorithm. To gain a competitive edge, the two entrepreneurs commissioned Hollywood celebrity trainer Ashley Conrad and former Wolverine athletic strength and conditioning coach Mike Barwis to create customized workouts and training programs. The company’s initial product rollout is targeted at the resistance and body weight training market, an underserved niche. “If you build a product you believe in, and that your customers really need and want, then you’ll be successful,” say Hughes and Canavan, who won the $20,000 Pryor-Hale Award for Best Business at the 2013 Michigan Business Challenge.
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Water The Erb Institu tE
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As one of the world’s most valuable and sought-after natural resources, water serves as a nexus for population health, aquatic/ terrestrial habitat, food production, economic development and energy generation. Erb faculty and students are collaborating on research and spearheading entrepreneurial projects in the field to foster more sustainable uses and management of the earth’s dwindling supply of freshwater. The University of Michigan Water Center, established in October 2012 with funding assistance from
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the Fred A. and Barbara M. Erb Family Foundation, is engaging researchers, practitioners, policymakers and nonprofit groups in efforts to protect and restore freshwater ecosystems in the Great Lakes, as well as globally, through improved restoration science, management and policy. As the 21st century unfolds, water will continue to pose both sustainability risks exacerbated by climate change and opportunities for conservation and quality improvement that merit Erb’s ongoing involvement at all levels.
Delivering Clean Water and Energy to the Poor
Research
2013 Erb Best MS Opus Book Award winner Designing Innovative Corporate Water Risk Management Strategies from an Ecosystem Services Perspective A team master’s project led by Daniel Gerding, Berry Kennedy, Makely Lyon and Emily Taylor, all Erb ’14, has been selected as the winner of the 2013 Erb Best MS Opus Book Award competition. Their full report, “Designing Innovative Corporate
Tip of the Mitt Watershed Council in Petoskey, Mich., asked a master’s project team to research and prepare a watershed management plan for Tannery Creek, one of the main tributaries leading into northern Michigan’s Little Traverse Bay. Leah Zimmerman, Erb ’14, and her teammates conducted a full stream assessment and watershed analysis, which they shared with residents and business owners at two community forums. Their final plan recommended continued monitoring of Tannery Creek to assess current threats from debris/litter and altered hydrology, as well as future commercial development-linked threats, such as thermal pollution, nutrient loading, sedimentation and increased runoff containing heavy metals, pesticides and pathogens. The team also proposed a robust education and outreach program to build stewardship in the surrounding communities and specific protection measure to avoid potential problems.
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Freshwater is essential for many business activities and a key driver for overall economic growth. Yet the availability of this important natural capital is increasingly constrained by growing demand, reduced supply, disruptive climate events and deteriorating quality. Through master’s projects and case studies, the Erb Institute is helping corporate, community and nonprofit partners develop sustainable strategies for managing, utilizing and conserving water resources.
Tannery Creek (Little Traverse Bay): A Scale Appropriate Watershed Management Plan
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Ursula Jessee and Alex Papo, both Erb ’15, have developed a sustainable, inclusive model for delivering clean water and biodiesel fuel for energy production to poor rural communities that lack access to these two critical resources. Their proposed entrepreneurial venture, called ArborAqua, makes the business case for cultivating and harvesting the moringa tree, which grows rapidly in tropical climates. The moringa’s highly nutritious seeds can be used for the nonchemical purification of drinking water or crushed to release oil, which is then processed into biodiesel fuel for cooking, heating and electricity production. The sale of energy-related products, which command higher profit margins than water, would enable the startup business to generate sufficient revenues to become selfsupporting and scale up its services. Increased economic activity would support local farmers and create new jobs for water and fuel distributors. ArborAqua’s environmentally friendly approach to supplying both water and energy to underserved populations earned two accolades in 2012. The concept team, which also included Stephen Ahn, Erb ’15, won a $2,500 Dow Sustainability Innovation Student Challenge Award. Jessee and Papo, who added the biofuel component to ArborAqua, received a $1,500 Renewable Energy Scholars Award.
Water Risk Management Strategies from an Ecosystem Services Perspective,” will be published in paperback under the Erb masthead. Released in May 2014, it will be available from Amazon. The students worked in partnership with the Dow Chemical Company to develop an integrated, long-term framework for addressing ecosystemservices challenges related to freshwater. Dow’s Freeport, Texas, facility uses water from the Brazos River for the production of propylene glycol, a feedstock for its global chemical manufacturing operations, and as a coolant for electricity generation. Increasing fluctuations in the Brazos River’s water level and growing uncertainty around the future supply of water prompted the company to seek sustainable solutions to reduce the risk of water scarcity. After analyzing 10 creative management responses developed by various institutions to meet ecosystem-services challenges, the Erb team recommended that Dow establish a sustainability capital investment fund to finance important water-related environmental projects tied directly to its 2015 sustainability goals. The students also urged the company to start with a small-scale pilot project, get the buy-in of highlevel management and create a capital-investment scorecard to measure both the financial returns and beneficial outcomes of the environmental projects supported by the sustainability fund. SNRE Professor Donald Scavia was the faculty adviser for the team.
Coke in the Cross Hairs: Water, India and the University of Michigan In the beverage industry, controversies over water shortages in India impacted the business operations and brand identity of the Coca-Cola Co. and raised environmental concerns at the University of Michigan. This case study by Erb Director Andy Hoffman and co-authors Sarah Howie, Erb ’12, and Grace Augustine examines the University’s decision in 2006 to cut its contract with Coca-Cola until the company enacted environmental and labor reforms that satisfied the demands of a U-M student activist group. The case won the 2011 Oikos Global Case Writing Competition.
Books and Journal Articles Award Winning Master’s Project Appears in Paperback
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The inaugural winner of the Erb Best MS Opus Book Award competition, launched last year, has been published as a paperback under the Erb masthead and is now available online from Amazon. Scaling Up Payments For Watershed Services is based on a 2012 master’s project report written by Erb students Daniel Cantor, Colm Fay and Chris Zwicke, all Erb ’12, and their SNRE teammates, and features an introduction by University of Michigan faculty advisor Peter Adriaens and a foreword by Erb Director Andrew Hoffman and Emily Plews. The book illuminates the critical role that forests, wetlands and other permeable ecosystems comprising the “green infrastructure” play in the natural filtration and purification of water flowing to the intake pipes of a public water supply. The authors examine the challenges of maintaining this green infrastructure pathway in the face of increasing pressures to allow unimpeded development that compromises the natural ecosystem processes and necessitates investment in costly human-engineered filtration systems. They recommend scaling up Payments for Watershed Services programs in southeast Maine’s
Sebago Lake watershed, where they conducted their study, and nationwide as a sustainable, costeffective strategy to incentivize nonindustrial private landowners to adopt conservation practices that help preserve the supply of clean water.
Journal Article Vets Corporate Strategies for Mitigating Water Related Risks Viktor Passinsky, Erb ’13, collaborated with U-M professor Peter Adriaens and Ann Arborbased LimnoTech to co-author an article, titled “Mitigating Corporate Water Risk: Financial Market Tools and Supply Management Strategies,” which appeared in the October 2012 issue of Water Alternatives. The article identifies the waterrelated risks currently confronting a wide swath of business sectors, including food/agriculture, forestry, mining, steel, shipping, water utilities, manufacturing, chemicals, pharmaceuticals and energy. These risks, according to Passinsky, include physical risk, where the lack of available clean water may disrupt production; regulatory risks, where future regulatory or legal actions may limit access to water for use in production or supply chains; and reputational risks that may impact a company’s brand identity. He outlines a decision framework of five corporate response actions, including financial-market tools and supply-management strategies, which companies can use to mitigate water risks to their business operations. The response spectrum ranges from hedging against financial risks by purchasing futures contracts or insurance against adverse weather events to buying or trading water rights and physical quantities of water. Companies also can take sustainable steps to reduce their water usage and reuse their wastewater or partner with other stakeholders, including governments, to enhance the overall water supply in a watershed or aquifer. Passinsky concludes sustainable water stewardship strategies will become increasingly important as water scarcity and uncertainty worsen with population growth, increasing agricultural and energy demands and climate change.
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Laura Rubin, MBA/MS ’95, Spearheads a River Renaissance Along the Huron
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high-quality farmland and natural areas that help protect the health of the river,” Rubin reports. Through its RiverUp! program, the HRWC has teamed up with city and community leaders and private corporations to develop comprehensive plans for cleaning up and repurposing highly contaminated areas along Huron, including the abandoned 14-acre MichCon/DTE site next to the railroad tracks in Ann Arbor and the vacant Ford Motor Co. plant on I-94 in Ypsilanti. Rubin and her 11-member staff of research scientists, policy planners and media experts also serve on state and federal policy committees, provide input on pollutionreduction and land-use initiatives and support local millage proposals that provide funding for the protection of open space and natural areas.
“When the Huron was industrial and dirty, most communities had their backs to the river,” explains Rubin. “Now communities are turning their faces to the river and reconnecting with it. People are recognizing the value of being a river town and exploring ways to turn this beautiful resource into an amenity that adds recreational, economic and cultural value to the area.”
Rubin has successfully bridged the often-divergent interests of environmentalists and commercial developers by first establishing basic needs and shared values—such as a high quality of life, a good community, clean drinking water, attractive natural areas and the ability to make a living—and then discussing how to reach that common ground in unison. “I’m becoming more of a broker for the river—finding people to clean it up and invest in recreation or businesses,” she explains. “I need to be sensitive, too, and balance the environmental, economic and recreational demands. However, it is important to attract people to the river so they can develop a conservation ethic and appreciation for it as a natural resource.” As climate change triggers more intensive storms and more severe droughts, the Huron River watershed will play an increasingly critical role in relieving flooding by draining away excessive stormwater and retaining moisture in wetlands and floodplains during periods of low precipitation.
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Since joining the HRWC in 1998, Rubin has transformed the nonprofit from a low-profile organization conducting science in the background to a high-impact, high-visibility national leader in the field of watershed management. The council has led in the development and dissemination of cutting-edge conservation and public-education projects and now serves as a model for other watershed organizations around the country. In June, Rubin won River Network’s 2013 River Heroes Award, which recognizes those who have made a sustained contribution to river protection.
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decade ago, Ann Arbor, Ypsilanti, Dexter and other southeastern Michigan communities located within the seven-county, 900-square-mile Huron River watershed had a disparaging view of the meandering waterway, which flows more than 125 miles from its headwaters at Big Lake, near Pontiac, to its mouth at Lake Erie. Today, those same communities, representing a half-million residents, are celebrating a “river renaissance,” spearheaded by Laura Rubin, MBA/MS ’95, executive director of the Huron River Watershed Council. Established in 1965, the HRWC is Michigan’s oldest watershed council and works with a network of 500 volunteers to inspire attitudes, behaviors and economies that protect, rehabilitate and sustain the Huron River system.
Over the past 15 years, the Huron River has seen a reduction in one of its major pollutants, phosphorus, thanks in part to the HRWC’s educational outreach programs for homeowners, strengthened soil-erosion regulations and enforcement and innovative stormwater controls by local governments and businesses. In 2008, the council supported the region’s first dam removal, at Mill Creek in Dexter, which resulted in a healthier waterway, better water quality, improved aquatic and terrestrial habitats and increased appreciation and utilization of the river by residents. “We’ve been working with our local governments and land conservancies to identify and protect more than 6,000 acres of
Rubin, among the first students in 1992 to enroll in the University of Michigan’s joint MBA/MS program, now overseen by the Erb Institute, says her graduate education prepared her to take the helm of the HRWC by providing a solid grounding in business and science and valuable exposure to different fields, perspectives and people. “This job has been a perfect fit for me and continues to offer new challenges, solid rewards and unexpected surprises,” she says. “It’s very fulfilling to have an impact on the community in which I live and to see changes for the better in the river and watershed.”
Ursula Jessee, Erb ’15, Providing Global Opportunity through Entrepreneurship
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s the daughter of a USAID foreign-service officer and a Salvadoran mother, Ursula Jessee, Erb ’15, has lived overseas for 19 years and witnessed widespread poverty in developing nations such as Egypt, Nicaragua and Bolivia. These insights into life at the base of the pyramid have ignited a strong desire to find solutions to pressing societal problems and to improve living conditions for people facing economic hardship. “I had access to opportunities that other people didn’t have, based on where I was born and my parents’ status,” Jessee explains. “My calling in life is to devise ways to address these inequities and to bring promising opportunities to those who are less fortunate.”
“I am already thinking about an innovative clean-tech application for cars and a wisdom-of-the-crowd computer platform for sourcing ideas that can help solve critical problems,” Jessee says. “It’s all about creating social impact and driving positive change in the world.”
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During her first year at Michigan, Jessee created entrepreneurial business concepts for two social enterprises that utilize sustainable methods to counter the critical shortage of clean water, electricity and adequate housing in poor rural communities around the globe. ArborAqua, a business model she co-developed with Alex Papo, Erb ’15, proposes using the tropical moringa tree’s nutritious foliage and seeds for water purification and the production of biodiesel fuel to generate electricity. The multifaceted venture potentially would spur local economic activity among plantation farmers, water entrepreneurs and biofuel distributors. In 2012, ArborAqua won both a Dow Sustainability Innovation Student Challenge Award and a Renewable Energy Scholars Award for its unique approach to water treatment and renewable-energy production.
Jessee’s prior experience in international economic development—gained through her role in relaunching and leading the consulting company Sustainable Development International, as a Fulbright Scholar in Jordan, and as a Rotary Ambassadorial Scholar in South Africa, as well as her work at an economic development organization and a relief agency—has given her the confidence to launch and scale up ArborAqua, ReRe Housing and other entrepreneurial ventures incubated at Erb.
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She says the Erb Institute has provided the time and space, supportive academic community and financial resources she needs to pursue some of her entrepreneurial ideas. The institute also has reshaped her thinking about sustainability. “Before I enrolled at Erb, I wouldn’t have thought that much about the sustainable aspects or applications of my ideas,” she remarks. “Now I do. That crucial focus on sustainability has been strengthened through my coursework at the Ross School of Business and the School of Natural Resources and Environment.”
The idea for a second social venture, ReRe Housing, arose from Jessee’s earlier research on slum dwellers living in poorly insulated, highly flammable wooden shacks outside Johannesburg, South Africa, where she pursued graduate studies at the University of the Witwatersrand. “I saw people suffering from burns they received from the open-pit fires used to heat these shacks,” she explains. “My entrepreneurial idea is to create safe, affordable, resilient housing that improves community health and instills a sense of dignity among these consumers.” The ReRe business model calls for the manufacture of lightweight, portable, easy-to-construct homes made from low-cost, reusable, nonflammable materials. Local entrepreneurs would be trained in sales and delivery, thus creating jobs for the unemployed.
Leah Zimmerman, Erb ’14, Charts a New Course toward a Sustainable Future
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eah Zimmerman, Erb ’14, could not have predicted the dramatic shift in her career goal that occurred during her second year at the Erb Institute.
“I came to the University of Michigan to study Great Lakes ecology,” says Zimmerman, a Grand Rapids, Mich., native who spent her childhood summers vacationing along the Lake Michigan gold coast and later worked overseas for six years with Pacific Environment, a San Francisco-based nonprofit organization dedicated to protecting the living environment of the Pacific Rim. “During my first year at the School of Natural Resources and Environment, I took on courses in Conservation Ecology and Behavior, Education and Communication.”
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For her master’s project, Zimmerman led a student team that provided their client, Tip of the Mitt Watershed Council, with a well-researched watershed-management plan for Tannery Creek, one of the main tributaries leading into Little Traverse Bay near Petoskey. She also worked as a graduate associate for the Huron River Watershed Council, where she assisted in the design and implementation of a Climate Resilient Communities program that engaged diverse stakeholders—including local governments, research scientists and community members—in discussions about the projected impacts of climate change in southeast Michigan. During the summer of 2012, Zimmerman interned with the Erb Family Foundation and helped four Michigan watershed groups build their organizational capacity. On campus, she served on the Student Sustainability Initiative board and supported efforts to introduce sustainability into Michigan Athletics, including an initiative to convert Michigan Stadium to a zero-waste facility.
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On campus, Zimmerman served on the Student Sustainability Initiative board and supported efforts to introduce sustainability into Michigan Athletics, including an initiative to convert Michigan Stadium to a zero-waste facility.
This summer, however, found Zimmerman miles away from the sandy shores and sparkling blue water of the Great Lakes. She accepted an internship at J.P. Morgan in New York City, where she entered the financial services company’s Finance Associate Leadership Program. “This is not where I expected to be when I entered Erb,” Zimmerman explains. “Yet here I am enjoying it. My love for Great Lakes conservation has not diminished, but my path to impacting the world has shifted.” Zimmerman honed in on finance and strategy functions while reflecting on her past career experiences and exploring new opportunities at the Ross School. “As I thought about today’s world and the world of the future I want to see, I realized that the banking industry is an important sector and has tremendous power in the world for doing good or evil,” she reflects. “At a gut level, I loved the thought of being part of that industry, with the vision of seeing it serve as a catalyst for good things.” Zimmerman’s decision not to pursue a direct path of sustainability within business sets her apart from her classmates. “In many ways, I’m not a typical Erb student,” she admits. “Corporate social responsibility is not for me. Instead, I’m drawn to two divergent paths: either a traditional leadership position in a corporation, with the aim of steering the company and the industry toward the sustainable future I envision, or a leadership role within the nonprofit/philanthropic sector that seeks to support and advance such change. “For this next life season, I choose the private sector to pursue both personal growth and big impact,” Zimmerman continues. “I will, however, consistently seek out ways to support grassroots organizations, such as Pacific Environment and Tip of the Mitt, that are doing powerful work, and I am confident these two divergent paths will converge in some way in my future.”
Cynthia Koenig, Erb ’11 Wello WaterWheels rolling along in India
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ello has come a long way since Cynthia Koenig, Erb ’11, arrived in India in September 2011. The Wello team co-created the WaterWheel 2.0 and 2.5 prototypes with consumers in rural India, validated the design through a pilot that reached 1,500 people, and sold out its first WaterWheel production run.
Sunita, a mother of three, was one of Wello’s first customers. She and her husband, who are both disabled, and their children live in Daba, a village in central India. Their two teenage daughters make numerous trips each day to a hand pump located 1 kilometer from their house to meet the family’s basic water needs. Using a 6-month, interest-free microfinance loan, Sunita purchased a WaterWheel for $15. Her daughters transport three times more water than before, in less time, and without the pain and health risks associated with carrying heavy jugs on their heads.
Before Gita started using the WaterWheel, she made six to seven trips a day to collect water in 5-gallon containers. Now that she has a WaterWheel, she makes only four trips a day and is able to walk faster, cutting in half the amount of time she spends collecting water and leaving more time for income-generating activities. Nizam, a 25-year-old farmer in Datla village, farms six acres of his own land and is secretary of his local watershed committee. He is renovating his home and uses a WaterWheel to collect water for the cement construction project. He also earns nearly a dollar a day renting the WaterWheel to neighbors for a small fee.
“Mary had a big impact on Wello,” Koenig says. “She helped design our market entry and pilot strategies, laid the groundwork for our social impact assessment methodology, and created several financial models to helps us think about scale.” Fritz and Colm Fay, Erb ’12, private sector specialist in international health at Abt Associates, serve on the Wello board of directors, which Fay also chairs. Koenig, who recently joined the Erb Advisory Board, says, “I’ve benefited tremendously from the support and wisdom of the Erb community. As an EAB member, I’m looking forward to serving as a resource for students who are interested in international development, entrepreneurship and pursuing non-conventional career paths.” Wello quickly is gaining an international reputation. It was a finalist in the McKinsey Social Innovation contest in 2012. Koenig participated in one of the plenary panel discussions at the Fifth Annual Clinton Global Initiative University meeting at George Washington University in Washington, D.C., in spring 2012, and spoke at the TEDxGateway in Mumbai in December. Her talk, “The Weight of Water,” is available on the TED website [LINK]. Wello also was featured as one of the 50 most innovative startups in health at TEDMED’s annual meeting in May. In January 2013, Koenig joined entertainers and clean water advocates in Summit on the Summit, a six-day, 50-mile climb up Mt. Kilimanjaro, Africa’s tallest peak. Founded by Ethiopian-born American musician and philanthropist Kenna Zemedkun, Summit on the Summit’s goal is to educate, engage and activate a global community of clean water supporters. “I’m so glad Wello was included as an education partner alongside clean water advocates like Water.org and P&G’s Children’s Safe Drinking Water Program. It was a great opportunity to highlight an aspect of the global water crisis that is often overlooked—the need to improve reliable access to clean water,” Koenig says.
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The WaterWheel also has made a difference for Gita, who lives in Vasna, a slum near Ahmedabad. In addition to caring for her young children and performing household chores, Gita supplements her husband’s irregular income as a day laborer by selling recyclables and sewing; she scavenges at a local dump for materials to resell and makes quilts from fabric scraps discarded by textile mills.
Wang and Mary Fritz, Erb ’13, a 2012 summer intern, both came to Wello through the William Davidson Institute Global Impact Internship Program.
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As of mid-2013, 50 WaterWheels were in daily use in India. The rolling plastic drums outfitted with handles are directly impacting the lives of 100 primary users and up to 300 others indirectly. Koenig estimates that WaterWheel users spend two hours less each day collecting water than they would otherwise. “With better, more reliable access to water, men tend to share the burden of water collection. This means that women have more time for other tasks, girls are more likely to attend school and the health of the entire family improves,” Koenig explains.
This summer, Ross School MBA student and intern Shu Wang is working with Wello to develop dashboard metrics, refine financial forecasts, explore alternative revenue streams (including the sale of advertising space) and prepare for Wello’s next round of fundraising.
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Food Feeding the world’s seven billion people has never been more urgent, or more difficult. One in every eight persons today goes hungry, according to the United Nations World Food Program. The U.N.’s Food and Agriculture Organization projects the global population will add 2.3 billion people by 2050, further increasing the market demand for food. Yet, agriculture in the 21st century faces tough challenges. More food must be
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produced by a smaller rural labor force to feed the expanding population. Agriculture-dependent developing countries need fair payment for their products and labor to support accelerating growth. More efficient, eco-friendly production methods must be utilized to conserve natural resources. Finally, food producers need to adapt to climate change, which is disrupting planting, growing and harvesting activities. The enormity of these challenges necessitates working throughout the lifecycle of food products and systems to increase sustainability and decrease unwanted environment impacts.
Research Projects and Internships Food-systems research at nonprofits, corporations and industry groups is helping to foster informed discussions about sustainability issues and advance solutions that yield lasting environmental, economic and social benefits.
Assessing certification programs in tropical landscapes
The University of Michigan Health System manages a constantly changing population of patients—logging 45,000 inpatient and 1.9 million outpatient visits in 2012 alone. Its Patient Food and Nutrition Services, or PFANS, group provides in-room dining services for these patients, as well as mobile meals to homebound community residents. This vast scope of food procurement,
As America’s largest retailer, Wal-Mart Stores Inc. serves 140 million customers weekly and operates a far-reaching global network of suppliers. The company is well positioned to promote environmental sustainability, but is it maximizing its potential to do so? During her 2013 summer internship with the National Resources Defense Council (NRDC), Julia Ruedig, Erb ’13, sought to answer that question and contribute to a sustainable solution. Over 10 weeks, she worked with NRDC’s Food and Agriculture team to develop strategic recommendations for reducing greenhouse-gas emissions throughout Walmart’s international agricultural supply chain. As part of a secondary research inquiry, Ruedig also conducted interviews with grocery-store managers to gain a better understanding of how the handling of perishable products around “best by” and “sell by” expiration dates contributes to food waste in retail settings. She found that consumer misunderstanding about the meaning of date labels results in the premature discarding of food. Grocers stand to benefit economically by changing their current food stocking and removal practices around expiration dates, Ruedig concluded.
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Aligning sustainable practices with health care delivery at PFANS
Guiding a U.S. retailer in reducing GHG emissions
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The increasing demand for beef from Brazil and palm oil from Indonesia challenged an Erb/SNRE research team to assess the design, implementation and impact of voluntary certification programs that promote sustainable environmental and social practices in agricultural food chains. Over the past summer, Ben Chen, Erb ’14, and his team members traveled to Sao Paulo and the state of Mato Grosso where they interviewed Brazilian cattle farmers, tradeassociation representatives, nongovernmental organization leaders at the World Wildlife Fund and the Nature Conservancy and food-chain retailers, such as Wal-Mart Stores Inc. and Carrefour S.A. Other project members worked separately in Java and Kalimantan in Indonesia. During their research, Chen’s cohort observed that Brazil’s NGO-driven certification program is more stringent—and therefore, less widely adopted—than the more lenient, industry-driven initiative in Indonesia. They also noted that different supply-chain stakeholders focus their corporate social responsibility efforts on disparate problems, such as human slavery, animal welfare and deforestation. Chen and his team found that voluntary certification in Brazil benefits large cattle farmers, who can afford to get certified, but not smallholder and medium-size farmers, who lack adequate monetary resources. They concluded that expansion of voluntary certification throughout Brazil’s agricultural supply chain requires a new strategy which allows smallholder and medium-size farmers to improve their financial performance while also improving their sustainability.
preparation, consumption and disposal offers ample opportunities to align sustainable practices with health care delivery and to create a national model for the industry. For their research project, Catherine Dyson, Erb ’14, Annie Cronin, Erb ’14, and Jenna Agins, Erb ’13, conducted a thorough assessment and explored options for reducing PFANSs waste, water and energy footprints while achieving greater cost savings. In their 2013 report, the students recommended improving product sourcing, ramping up recycling and adopting composting processes in order to decrease the amount of plastic, metal and food flowing into the waste stream. They also emphasized the importance of educating and engaging employees in sustainability efforts to ensure long-term success.
Julia Ruedig, Erb ’15, Sows the Seeds for Food System Sustainability
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ulia Ruedig, Erb ’15, believes more can be done to reduce inefficiencies and improve the sustainability of America’s food system. “Food waste is a big problem that occurs in many areas, including our agricultural supply chains, retail sales outlets, and even our own homes,” she says. “Unfortunately, there’s no silver bullet for solving this sustainability problem. The solution will require a widespread approach.”
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Putting food on America’s dinner tables consumes 10 percent of the nation’s total energy budget, 50 percent of its land and 80 percent of its potable freshwater. Yet 40 percent of the food in the U.S. today goes uneaten—the equivalent of more than 20 pounds per person every month, according to a 2012 report by the Natural Resources Defense Council. The increasing amount of waste is particularly troubling at a time when one in six Americans lacks a secure supply of food.
Currently, Ruedig is working with the World Wildlife Fund on her master’s project, which seeks to inform corporate purchasing managers and product designers about the environmental tradeoffs of similar agricultural commodity choices, such as soy oil vs. palm oil. Around campus, she participates in conferences and activities sponsored by the Consortium on Agriculture, Food and the Environment. CAFE seeks to advance professional and academic development, stimulate dialog and foster collaboration and leadership on the sustainability of food systems among U-M students and the greater global community. “My passion for food comes alive when I get my hands in the earth,” says Ruedig, an avid gardener since childhood who now champions School of Natural Resources and Environment students who “grow blue” at the U-M Campus Farm operated by the University of Michigan Sustainable Food Program.
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During a 10-week summer internship with the NRDC, Ruedig helped its Food and Agriculture team work with Wal-Mart Stores Inc. to explore corporate strategies for mitigating the amount of greenhouse gases released into the environment throughout the retailer’s supply chain. “I looked at a broad spectrum of possibilities for incentivizing and assisting international suppliers in implementing more-sustainable processes that would reduce GHG emissions,” she explains.
Before enrolling in graduate school at Michigan, Ruedig directed marketing and communications strategies at Blue Marble Biomaterials, a Missoula, Montana-based manufacturer of natural and sustainable specialty chemicals. That experience piqued her interest in changing the status quo of America’s food system. However, it was the Erb Institute that helped “connect the dots” between her love of food and her desire to pursue a career in food system sustainability.
Ruedig also conducted research on how grocery stores handle “sell by” and “best by” expiration dates on food and whether this contributes to excessive food waste in retail sales outlets. “I examined current practices in grocery stores in order to understand the potential economic benefits to grocers of changing the processes for stocking and removing food around expiration dates,” Ruedig says. “There is a great deal of misunderstanding among consumers about the meaning of date labels, resulting in an enormous amount of prematurely discarded food.” One industry expert cited in the NRDC’s 2012 report estimated that supermarkets destroy on average $2,300 worth of out-of-date food every day, even though most of the food is still consumable. Ruedig’s research efforts contributed to the NRDC’s knowledge of the issue in advance of a new report issued jointly with the Harvard Food Law and Policy Clinic.
“Food touches so many aspects of our world, our farms, supply chains, businesses, natural environment and human health,” Ruedig explains. “Erb has enabled me to make connections across multiple disciplines and develop a broad-based framework for achieving greater sustainability in our food system.”
Raphael Meyer, Erb ’13, Launches a Startup to Take the Waste out of Takeout
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ccording to the U.S. Environmental Protection Agency, the United States in 2011 generated 32 million tons of plastic waste—including 14 million tons of containers and packaging, 11 million tons of durable goods such as appliances and 7 million tons of nondurable goods, such as plates and cups. Yet, only 13 percent of the plastic packaging waste generated that year was recovered for recycling. The rest—approximately 12 million tons—ended up in the country’s overburdened landfills. That trend disturbs Raphael (Phel) Meyer, Erb ’13, who recently co-founded BizeeBox, an entrepreneurial business venture dedicated to stemming the growing tide of trash and reducing its environmental impacts. The immensity of the waste problem, he says, is “mind-boggling.” Finding a solution to this environmental juggernaut is not easy, however.
In the spirit of action-based learning, Meyer and Grousset applied for a grant from the Planet Blue Student Innovation Fund and received $8,000 in funding to develop and pilot Go Blue Box at the University Club Café in the Michigan Union. Over nine months, the University of Michigan’s firstever reusable takeout container program diverted food packaging for an estimated 5,000 takeout meals from going into area landfills.
Meyer says BizeeBox’s short-term plans call for getting a beta pilot program up and running in Ann Arbor by May 2014. “We’ll take lessons learned and expand to other locations while going back to investors to find additional funding,” he says.
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Meyer, who was born in France but grew up in California, previously worked for Accenture as an informationtechnology consultant, enrolled at the Erb Institute in 2010 with the goal of pursuing a career in the consumer-goods industry, where he could help companies reduce the waste generated by their operations or products. He met his current business partner Richard Grousset, Erb ’13, that year, and the two graduate students began brainstorming about creating a business focused on waste reduction. Over the next two and a half years, the two entrepreneurs refined their business plan for a start-up company that would literally take the trash out of takeout by making reusable takeout containers widely available to the public.
“This business venture is our attempt to create a new way of thinking about materials and waste production while promoting reuse as an alternative to recycling, composting or landfilling,” Meyer explains. As an Erb student, he helped to promote sustainable change on the University of Michigan campus by serving on the Student Sustainability Initiative board and co-authoring a feasibility assessment for the adoption of zero-waste football games at Michigan Stadium. Through Erb internships with Business for Social Responsibility and the Environmental Defense Fund and a master’s project with Recreational Equipment Inc. (REI), he gained a better understanding of the lifecycle environmental impacts of products and systems from a corporate perspective.
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“Ironically, I continue to be part of the problem because our infrastructure is not set up to enable ordinary consumers, such as me, to reduce the waste we generate from getting food-to-go from restaurants,” explains Meyer. “I can’t tell you the number of times I’ve been confronted with the sight of trash cans overflowing with takeout containers.” Although no one formally tracks these numbers, he estimates Ann Arbor restaurants serve more than two million to-go meals annually, and that nationwide, some 15 billion disposable food containers end up in consumers’ hands—and most likely, in trash receptacles—each year.
In June 2013, the two Erb graduates formed Ann Arbor-based BizeeBox with the intention of providing restaurants with sturdy, reusable containers and associated delivery, pick-up and sanitization services that reduce the need for disposable takeout containers. Their business model incorporates technology-based container tracking, incentives, customer engagement and marketing that broaden BizeeBox’s appeal to restaurants and consumers. To finance their start-up, Meyer and Grousset initiated a successful Indiegogo crowdfunding campaign on Sept. 16, netting $30,170 in seed money.
Ethan Schoolman, Ph.D. ’13, Examines the Environmental and Social Impacts of Buying Locally Grown Food
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he environmental movement’s support for local food systems has grown exponentially in recent years, spawning a national wave of interest and investments in food hubs, farmers markets, farm-to-table restaurants and locally based food processing. Communities, such as Grand Rapids, Mich., have spent millions of dollars to build year-round downtown public markets that bring farm-fresh produce to city dwellers’ doorsteps and revitalize languishing low-income neighborhoods.
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Ethan Schoolman, Ph.D., ’13, sees this phenomenon as a positive outgrowth of concerns for the environment, equal food access, population health and economic development. Yet, he notes, relatively little research has been done to quantify the anticipated environmental, social and economic benefits of these investments. Questions remain about whether local food systems do in fact contribute to environmental and social sustainability. Over the next few years, Schoolman will try to unearth answers to those questions through his independent and collaborative research at the University of Michigan, where he holds a dual appointment as an Erb Institute Postdoctoral Research Fellow and a Dow Sustainability Fellow at the School of Natural Resources and Environment.
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“Locally grown food is often fresher and better tasting than food that travels a long way, and there is widespread agreement on the regional economic benefits of local food production as well,” Schoolman says. “The environmental impacts are not as clear. Local food is transported a shorter distance, so fewer carbon emissions are produced. However, less is known about whether farmers who participate in local food systems are more likely to use environmentally beneficial production methods, or about what inequalities exist in access to local food. As a postdoctoral fellow, I will be investigating the environmental and social consequences of efforts to strengthen local food systems.” Schoolman already has begun working with the Washtenaw Food Hub and sustainable-food groups in Washtenaw County to obtain grant funding for a project that would assist local farmers in scaling up their production to meet the needs of food entrepreneurs and the restaurant community. The food hub serves as a center for connecting commercial and institutional organizations and food processors with growers of raw produce and farm products. Schoolman is helping the hub conduct surveys of area food producers to gain insights into their current farming production and to determine what kinds of methods they will use as they ramp up their operations.
A second thread of Schoolman’s food-related research centers on a collaborative project with SNRE Professor Dorceta E. Taylor to explore the potential of local food networks to reduce food insecurity among low-income populations. The Food Access in Michigan project, funded by the U.S. Department of Agriculture, engages six Midwest universities, including the U-M and the UM-Flint, in research, education and extension activities aimed at understanding disparities in food access in 18 Michigan cities and developing programs to increase participation in local food initiatives. Schoolman is helping to coordinate interviews with nonprofit leaders, city officials and entrepreneurs to identify obstacles that can thwart investments in local food systems. Later this year, he will assist in convening focus groups of farmers to probe key issues related to farm-to-market food production. While the study of local food systems seems a bit far afield for a former beat reporter who left the hubbub of a Chicago newsroom to pursue a doctoral degree in sociology at the U-M, Schoolman contends he has found the perfect milieu to nurture his talents and explore his research interests. “I wanted to go into a field that would give me more time and resources to ask questions about why things happen the way they do and how people think about the world, and then to tell their stories,” he says. As part of his doctoral work, Schoolman developed a new theory of “socially responsible purchasing” that revealed consumers are more likely to “buy local” than to “buy green,” regardless of their political, ideological and economic backgrounds. On the other hand, only a relatively small segment of upper-income, politically liberal buyers appear willing to pay extra on a regular basis to purchase Fair Trade and environmentally friendly goods. That revelation provided a springboard to his postdoctoral research into whether buying local is indeed better for the environment and society, or “just another good.” Over his seven years at Michigan, Schoolman has pushed the envelope of environmentalism and inched the University toward greater sustainability. During his two years as a graduate fellow of the Graham Environmental Sustainability Institute, Schoolman helped train the first generation of Planet Blue Ecological Ambassadors and spearheaded the design of the Sustainability Cultural Indicators survey. The U-M Institute for Social Research administers the survey periodically to a large sampling of Michigan students, faculty and staff to gauge their attitudes and behaviors around sustainability issues. As an Erb Doctoral Research Scholar, Schoolman contributed to a joint report with the Union of Concerned Scientists and represented the Institute at the Network for Business Sustainability Conference at the University of Western Ontario’s Ivey School of Business.
The Erb Institute’s pioneering work to bridge the world of the private sector and business with the world of environmentalism and sustainability has produced fertile ground for Schoolman’s research endeavors. “I see a close fit between my interest in local food systems, restaurants, food producers and farmers and the contributions these
businesspeople can make to improve the environment and create a more socially just world where everybody has access to fresh, healthy, local food,” he explains. “That connectivity is right at the heart of the Erb Institute’s mission.”
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Communities, such as Grand Rapids, Mich., have spent millions of dollars to build year-round downtown public markets that bring farm-fresh produce to city dwellers’ doorsteps and revitalize languishing low-income neighborhoods.
Built Environment The Erb Institu tE
Winston Churchill best summarized our relationship with the
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of the world’s energy and account for more than one-third of
built environment when he observed: “We shape our buildings; thereafter, they shape us.� Today, buildings consume 40 percent global carbon-dioxide emissions. The United States has made considerable progress in advancing energy efficiency, according
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to the American Council for an Energy-Efficient Economy, which reports energy use today is about half of what it would have been without improvements made over the past 40 years. Still, there are more opportunities to improve building performance costeffectively by adopting available and emerging energy technologies. Promoting sustainable residential and commercial construction, retrofitting and upgrades would cut energy bills, reduce pollution and encourage economic growth. New research and initiatives are pushing the boundaries of innovation across many sectors to ensure the built environment we shape today provides us with secure, sustainable homes and workspaces tomorrow.
Research Constructing Green: The Social Structures of Sustainability, MIT Press Edited by Rebecca Henn, former Erb PhD student who recently received her doctorate and Erb Institute Director, Andy Hoffman. This books examines the increase in sustainable buildings by understanding the fundamental challenges green construction faces through cultural, social and organizational shifts. Project reports drilling down into the complex issues impacting the built environment require research-based analyses. Recommendations and findings from these reports not only help to inform public policy, but also enable industry partners to develop sustainable, long-term strategies.
Greening Brownfield Properties
For their master’s project, “Sustainable Community Redevelopment: A Plan for Detroit’s Lower Eastside,” Zach Robin, Erb ’10, and his master’s project teammates assisted the Jefferson East Business Association in its strategic planning process by developing a replicable model of sustainable community redevelopment. Based on their assessment of the neighborhood, the team provided the association and community stakeholders with detailed next steps for restoring economic and neighborhood vibrancy in the Lower Eastside. Sustainable Community Redevelopment: A Plan for Detroit’s Lower Eastside: http://bit.ly/U47XxQ
ReRe Housing Creating Safe, Portable Housing To Improve Community Health
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To transform the built environment for the world’s estimated four billion people living in extreme poverty, Ursula Jessee and Alex Papo, both Erb ’15, have developed an entrepreneurial business concept for ReRe Housing, which would manufacture and distribute safe, durable, affordable residential dwellings made with reusable materials. The lightweight, prefabricated units would be easy to assemble, disassemble and transport, enabling families to pack up and move closer to new job locations whenever employment opportunities arose. Design innovations would provide greater comfort for slum residents by incorporating lighting, ventilation and fire and water resistance. The idea for the innovative social enterprise emerged from Jessee’s research on dilapidated and dangerous squatters’ settlements around Johannesburg, South Africa, while she was a graduate student at the University of the Witwatersrand. In addition to meeting consumer demand for cost-effective, sustainable homes that improve community health, ReRe Housing would spur entrepreneurial activity and create jobs up and down the supply chain.
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Abandoned brownfield sites contaminated with hazardous substances or pollutants pose serious environmental health, public safety and societal concerns for surrounding communities. At the invitation of ExxonMobil Biomedical Sciences Inc., Jennifer Casler, Erb ’11, and members of her master’s project team developed a framework for assessing the economic, social and ecosystem services benefits of transforming brownfield properties into green spaces. In their project report, “Greening Brownfield Properties,” the students outlined a sound rationale for remediation and alternative designs for converting a former 300-acre landfill and incinerator site in Houston to attractive, usable parkland. After interviewing community members and redevelopment experts, they proposed ideas for enhancing the potential benefits for local residents and businesses through the creation of green habitat and recreation areas and the construction of a stormwater management system.
Revitalizing Urban Neighborhoods
Jennifer Layke, Erb ’97, Fosters Thought Leadership in Building Efficiency
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he clock is ticking on building efficiency around the world, and there’s not a minute to lose, says Jennifer Layke, Erb ’97, executive director of the Institute for Building Efficiency, or IBE, in Washington, D.C.
“Right now, we are building cities in emerging economies at a pace that means inertia is driving us to replicate the building approaches we’ve used in the past,” she cautions. “If we’re not fast about getting these markets to change, we lock into yesterday’s approaches.”
“When you look at the scale and magnitude of the demand for these resources—and the externalities associated with that demand in terms of pollution, water consumption and naturalresource extraction—it’s clear that the impact is significant and has high environmental and social costs,” she says.
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Layke took the helm of IBE in 2010 when Johnson Controls Inc. created it as a thought leadership platform for gathering, analyzing and disseminating information about energyefficiency issues, advances and opportunities in the built environment.
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Buildings already consume 40 percent of the world’s energy and 70 percent of the electricity in the United States, according to Layke, who previously worked as deputy director of the World Resources Institute’s climate and energy program and as a consultant for the World Bank and the U.S. Environmental Protection Agency.
“There is a tremendous need for those of us in the privatesector side of the market to help scale up energy efficiency as a sustainability solution, but the practitioner’s voice has been missing—until now,” she explains. “Johnson Controls is in the building-efficiency business and has a lot of experience to share with communities, partners and customers. We see this as an opportunity to accelerate the adoption of energy efficiency in the built environment and to expand our markets and services. But in addition to telling the world what we’ve learned, Johnson Controls is learning from our stakeholders about their concerns and needs. This platform is a two-way communication channel for receiving as well as imparting information.” To create greater shared strategic value, Layke has built a network of experts drawn from academia, industry and nongovernmental organizations who serve as a sounding board for ideas and a source of research and feedback on common concerns. As an example, IBE worked in partnership with the Rocky Mountain Institute on the Empire State Building renovation and jointly elevated the concept of integrative design—a collaborative method for designing buildings that emphasizes the development of a holistic design. The institute
also has released white papers on other key building-efficiency topics, such as renovating to net-zero energy standards and incentivizing building owners to bundle technologies to achieve greater energy savings. “Among the most important components of our work is the Energy Efficiency Indicator,” Layke says. “It is one of the largest, most comprehensive data sets about decision making around energy investments in buildings.” The annual survey, now in its seventh year, asks global executives and building owners to report on the energy-efficiency practices, programs, policies and initiatives they have launched over the past year. “We’ve made a strategic investment in this survey tool and now we’re watching carefully to track how our data are being utilized by stakeholders to advance the conversation on building efficiency,” she says. In the past, that conversation has been impeded by a lack of understanding and consensus among policymakers, as well as financing constraints on building-efficiency projects. Slowly, things are starting to change, Layke observes. The building industry is beginning to look at life-cycle costing rather than first costs when considering investments in energy-efficient technologies that deliver greater energy savings over the lifetime of the building. Likewise, the real-estate market is starting to differentiate between energy-efficient and nonefficient properties, assigning “green premiums” to LEED-rated structures with high Energy Star scores and “brown discounts” to buildings that are energy guzzlers. Looking ahead, Layke calls for more ambitious measures to help unlock what she sees as the latent demand for bigger energy solutions. First, utilities could implement “demand response” programs that give building owners incentives to manage energy demand at the building level by scaling back usage at peak times and installing energy-efficiency improvements. Second, cities could offer low-cost loan programs, such as PACE (Property Assessed Clean Energy) financing, which would enable building owners to invest in those improvements now and pay back the borrowed money over time through their tax assessments. “There is an opportunity to fundamentally change the way we design and construct buildings,” Layke says. “The built environment is central to the human experience, so by investing in smart decision making about the built infrastructure, we can improve our air, health, livability, livelihoods and so much more.”
Richard Bole, Erb ’06, Creates Walkable Neighborhoods in Downtown Cleveland
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ike other aging industrial cities in the Midwest, Cleveland suffered from economic decline that left its oncebustling warehouses and office buildings standing vacant and lifeless. Some people saw an eyesore. But Richard Bole, Erb ’06, saw a huge market opportunity to build green in Cleveland’s urban core and create a healthful, walkable, sustainable living environment that would draw residents back to the city. It was also a chance to live his principles of sustainability.
The growing market demand for walkable urbanity and moresustainable lifestyles, especially among young professionals and empty-nesters, and the shortage of suitable apartments in downtown Cleveland prompted Bole to pursue green historic conversions of obsolete properties in his hometown.
Bole’s choice of Ajala for his company name is no accident. It means “of the earth” in Sanskrit, underscoring his deep commitment to protecting the environment and mitigating climate change. “From a global perspective, the motivating environmental issue of our time is climate change,” he says. “This is not only a global health, wellness and safety issue, but also a competitiveness issue for the United States. Our country lags Europe and Asia in terms of how many dollars we squeeze out of every gallon of fuel. If fuel prices rise, we won’t be able to compete as effectively in the global marketplace. What I’m doing helps put us on a more equal footing with other countries.”
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His first project was the Historic Holden Building, a transformation of a 60,000-square-foot warehouse into 32 upscale green loft apartments. Bole purchased the nearly 100-year-old property for $1.35 million in 2007 and spent $2.9 million on interior renovations and energy-efficient retrofits to its HVAC systems and building envelope. Holden residents live within walking distance of stores, restaurants, transportation and a large urban farm, greatly diminishing their need to drive cars in the city. Bole recently completed a second green historic conversion, Trinity Lofts, which entailed the $1.8 million gutting and retrofitting of a vacant church seminary to develop a green residential property with 18 studio and one-bedroom apartments.
Bole, who got the “bug” for the built environment at the Erb Institute, has leveraged his Wall Street experience at the nowdefunct Bear Stearns Companies, where he was a financial consultant to the energy industry, to put together the complex financing packages—comprising state and federal historic tax credits, founder’s capital and bank loans—needed to fund his ambitious projects. He also serves as his own general contractor, drawing on the construction and contracting coursework he took at Washtenaw Community College while attending graduate school at the University of Michigan.
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“My goal is to get as many people as possible living and working in dense, walkable urban and transit-oriented neighborhoods,” says Bole, who launched his green real-estate development and management company, Ajala Communities, now the Ajala Group, in 2006. “By providing an efficient place to live with access to public transportation, I am giving residents an opportunity to reduce their carbon footprint and environmental impact. I also hope they will gain a renewed appreciation for social diversity.”
He is now venturing into new green construction with a challenging project to build five state-of-the-art townhouses on the city border with Shaker Heights. The so-called net-zero energy homes will be equipped with geothermal heating and cooling systems and solar photovoltaic panels that generate renewable energy, reducing annual electricity consumption to zero.
Joshua Newell: Turning Vacant Urban Land into Productive Green Spaces
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ack alleys, vacant lots and underutilized urban spaces hold great potential for fostering more sustainable cities, if they can be reimagined and transformed into multidimensional green infrastructure that simultaneously delivers environmental, social and economic benefits, says Joshua Newell, assistant professor at the School of Natural Resources and Environment. “Traditionally, city planning around green urban redevelopment has been driven by one agency with a single agenda, so there’s been little focus on trying to achieve multiple objectives,” he says. “We can be more strategic in these redevelopment efforts. There’s much greater potential to achieve simultaneous benefits by repurposing neglected urban spaces with more than just one pillar of sustainability in mind.”
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Much of Newell’s urban sustainability research focuses on developing new models for what he describes as coupling multiple ecosystem services within a single redeveloped urban space. For example, an empty lot in a park-poor neighborhood can be repurposed as green parkland that serves as open space for residents, a playground for children and a means for abating stormwater runoff.
In 2010, Newell completed a study of the distribution, physical features and residential perceptions of 930 linear miles of back alleys within the city of Los Angeles. “My research on L.A.’s alleyways illustrates how we can create more sustainable cities by making them more walkable and permeable, and by repurposing underutilized spaces as neighborhood connectors and micro play areas for kids,” says Newell, who worked on the project with an interdisciplinary research collaborative at the University of Southern California. Recently, he has turned his research focus on Detroit, where he is collaborating with SNRE faculty member Ming Xu and research scientist Jarod Kelly on a project that examines how vacant land parcels in urban settings may be repurposed to improve mobility, reduce stormwater overflow events and enhance local air quality. Project funding was provided by the U-M Graham Environmental Sustainability Institute. A second research endeavor involves mapping the crisscrossing urban footpaths created by residents who walk through Detroit’s abandoned, unpaved lots. Three Michigan students associated with Newell’s Urban Sustainability Research Group are leading the mapping project, which is intended to provide
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policymakers with critical information about the current uses of the vacant parcels before decisions on land redevelopment are made. Newell is also the co-recipient of a 2013 MCubed Award for his research proposal to develop a framework for assessing the appropriate deployment of emerging water technologies in urban areas. “Detroit has a great opportunity to become more sustainable because it has tremendous land resources— much of which are underutilized,” Newell says. “The city is trying to think creatively about how to reinvent itself by repurposing this land for agriculture and green infrastructure. That infrastructure could be used for parks and open space, as well as the abatement of stormwater, which is a source of pollution for rivers and nearby aquatic ecosystems.”
“More than half the world’s population lives in cities, and in the U.S. that number is closer to 80 percent,” Newell says. “Therefore, the urban sustainability decisions we make in our cities—including the type of houses we build, the way we move, how we use our land and the kind of goods we buy and consume—have ripple effects on natural, social and economic ecosystems around the planet.”
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Repurposing neglected urban parcels as productive green spaces can yield multiple benefit, if the transformation is done in a socially just and economically viable manner, according to Newell. From an environmental perspective, there is an opportunity to improve ecosystem services by capturing stormwater and promoting better air quality.
On a social level, the benefits can include enhanced walkability, increased property values, greater food production and more healthful surroundings. From a business point of view, economic gains are possible when vacant land is creatively redeveloped adjacent to commercial areas that stand to benefit from increased foot traffic and more attractive cityscapes.
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Business Sustainability Around the globe, more businesses are embracing and advancing sustainable principles and practices in their internal organizational structures, their external supply chains and their customer bases. Unlocking the power of sustainability can add value to a company and improve its bottom line by driving energy savings, spurring the
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development of green products, reducing waste in operations and streamlining transport and delivery. Integrating sustainability into a business also can enhance its brand reputation and meet the growing demand for socially and environmentally responsible input, throughput and output by regulators, governments and the public at-large.
Increasingly, business sustainability is expanding into new venues. Multinational corporations, for example, are partnering with nongovernmental organizations and economic-development agencies to breathe life into sustainable energy, food and water projects and to fund microfinance enterprises in underserved areas around the world. Together, these initiatives are helping to create jobs, opportunity, better living conditions and hope for a large swathe of the population that has lacked access to the basic necessities of life in the past. As the future unfolds, business sustainability will play an increasingly important role in shaping the trajectory of the global environment, economy and society, for the better.
Case Studies
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SC Johnson and the Greenlist™ Backlash Kara Davidson, Erb ’13, and her team focused on the issues of green labeling, environmental certification and internal sustainability initiatives in their 2013 case study, “SC Johnson and the Greenlist™ Backlash.” The case centered on SC Johnson’s development of a patented Greenlist™ process to reduce the negative environmental impacts of its household products by substituting less harmful ingredients wherever possible. Two lawsuits were filed against the company, accusing Johnson of deceptively marketing its products as “green,” because the Greenlist™ label misled consumers into believing the products had been certified by an objective third party. The legal challenge and settlement compelled company officials to rethink their green-marketing approach. Erb Director Andrew Hoffman was the adviser for this case study.
Blueprint for Ford’s Future: From Personal Automobiles to Mobility In their 2013 case study, “Blueprint for Ford’s Future: From Personal Automobiles to Mobility,” Connie Yu, Erb ’15, and her team shined the spotlight on the automaker’s innovative “Blueprint for Mobility, ” which outlines its vision for meeting the world’s mobility challenges, particularly in rapidly growing megacities. The case took a holistic look at the global transportation industry but placed emphasis on densely populated urban areas in emerging markets and their increasingly congested transportation systems. The students, working under the supervision of Erb Director Andrew Hoffman, raised important questions about Ford’s resource and technology allocation as well as its strategic positioning among traditional and new mobility competitors.
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Mary Fritz and Rich Grousset, both Erb ’13, won the $1,500 first-place prize in the inaugural Erb Institute Sustainability Case Awards competition for their 2013 case study, “REI Rentals.” In their case study, Fritz and Grousset explored REI’s opportunity for improving the operations of its popular recreational-equipment rental business to maximize financial returns while minimizing environmental impacts. They examined whether rentals can be more cost effective to the customer, more profitable to the retailer and more resource efficient than selling new merchandise. In addition, they parsed the challenges of inventory control and distribution. The students were advised by Ross School of Business faculty members Damian Beil and Wallace Hopp. The Sustainability Case Awards program, sponsored by the Erb Institute’s Strategic Advisory Council, recognizes and promotes the creation and adoption of sustainable-enterprise teaching cases produced at the University of Michigan.
Wesley Allred, Erb ’14, Sheena VanLeuven, Erb ’15, and their team drilled down into the environmental and business tradeoffs of switching from polystyrene foam cups to more environmentally friendly lined-paper cups in their 2013 case study, “Jamba Juice and the Foam Cup.” The case looked at how Jamba Juice, a publicly traded smoothie company, will respond to public outcry about its environmental footprint. The student team discussed ways that phasing out foam cups would impact Jamba Juice’s core business, healthy-lifestyle brand, product delivery, customer attraction and retention and, ultimately, shareholder value. Erb Director Andrew Hoffman served as the team’s adviser.
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In the following case studies, Erb students peel back layers of business decision making to reveal the impact of product innovations, manufacturing improvements, revenue-maximizing measures, branding shifts and other strategic changes on long-term sustainability.
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Building a Scalable Business with Small-holder Farmers in Kenya: Honey Care’s Beekeeping Model Erb faculty affiliate Ted London’s 2013 case study, “Building a Scalable Business with Small-holder Farmers in Kenya: Honey Care’s Beekeeping Model,” focused on Honey Care Africa’s efforts to bring new supplemental income opportunities to families in the base of the pyramid through beekeeping and honey production. A pivotal question raised in the case was whether a reengineered business model that provided hivemanagement services resulted in larger honey harvests and increased household incomes. London is a senior research fellow at the William Davidson Institute.
Constructing a Base-of-the-Pyramid Business in a Multinational Corporation: CEMEX’s Patrimonio Hoy Looks to Grow
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The 2012 case study “Constructing a Base-of-thePyramid Business in a Multinational Corporation: CEMEX’s Patrimonio Hoy Looks to Grow,” written by Erb faculty affiliate Ted London, won the $250 third-place prize in the 2013 Erb Institute Sustainability Case Awards competition. The case presented a 2012 update on CEMEX’s Patrimonio Hoy, a start-up initiative designed to help lowincome customers construct their own cement homes. London, who is a William Davidson Institute senior research fellow, also examined management’s next steps to develop a business strategy that promotes growth and expansion of the program into new markets.
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Research Through their research, Erb students shed new light on innovative business strategies leading to more sustainable outcomes for people and the planet. Here are some recent research projects:
InterNational Bank Corporate Responsibility Strategy Daniel Gonzalez-Kreisberg, Erb ’14, Lawrence Han, Erb ’14, Jonathan Huynh, Erb ’13, and Javier Rivera, Erb ’14, developed a corporate responsibility strategy for InterNational Bank, a regional community banking institution in southern Texas that is being integrated into Mexico’s third-largest bank, Banorte. The Erb team’s three-year road map for implementing initiatives created a common link between Banorte and INB that fostered corporateculture integration and environmental and social stewardship.
Global BrightLight Foundation – Building a Business Plan For Solar Lamp & Cell Phone Charger Distribution In the world’s 50 poorest countries, almost 80 percent of the people lack access to electricity and rely on firewood and kerosene for their energy supply. To address this problem, the 2012 master’s project team of Adam Byrnes, Emilia Sibley, Sabrina Sullivan and Jimmy Ward, all Erb ’14, provided the Global BrightLight Foundation with valuable input on its social-enterprise model to make affordable solar-power technologies available to people living at the base of the pyramid. The students researched and analyzed the current market landscape and created a business model and detailed business plan for the foundation. The team’s work paved the way for the distribution of 40,000 solar-powered lamps to low-income residents in poor countries without access to electricity.
The Demand for Carbon Offsets in the United States Nancy Gephart and Sam Stevenson, both Erb ’14, led a student team that examined the demand for carbon offsets in the United States among companies purchasing offsets voluntarily and California-based entities buying offsets to comply with the state’s new greenhouse-gas regulation. For their 2013 report, “The Demand for Carbon Offsets in the United States: A Snapshot of U.S. Buyers on the Global Voluntary and California Compliance Markets,” the students surveyed compliance companies in California and interviewed buyers and other market participants. They also did case studies on five major companies making voluntary offset purchases: Ford Motor Co., Macmillan Publishers, Interface Inc., General Motors Co. and BP Group. Although each of the five had different goals for their offsetting program, they all reaped benefits, including environmental sustainability and improved branding, according to the report. The students also found that most voluntary buyers purchase offsets as part of a larger sustainability effort and prefer offsets that are highly visible, have immediate impact and pose a low public-relations risk.
Linking Land Use to Inland Lake Ecosystem Service Values Michigan’s inland lakes provide residents with recreation and aesthetic opportunities. However, land use changes and other decisions often do not fully account for the impacts on the benefits that people derive from lakes. Martha Campbell, Erb ’13, and a U-M student team worked with
the Natural Capital Project to develop a suite of models to assess current inland lake freshwater quality and predict changes in future lake water quality and property value based on different landuse scenarios. The 2013 project was designed to help decision makers and practitioners link upstream actions to influences on downstream freshwater ecosystem services.
Books and Videos New Book Reflects on Sustainability in Today’s Consumption-driven Society
Photo: Bob Conrati
The Erb Institute and the University of Michigan have produced an educational video collage featuring presentations by faculty thought leaders on issues related to business and sustainability. Erb Director Andrew Hoffman, Professor Thomas Gladwin and Executive-in-Residence Thomas Catania weigh in on topics such as Smart Grids and renewable energy, the “missing” stakeholders in corporate decision making and the future of technology, energy and mobility in the world.
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Erb Director Andrew Hoffman is the co-author of Flourishing: A Frank Conversation about Sustainability (Stanford University Press), a new book that challenges current thinking about consumption and the meaning of sustainability. The book, now available from Amazon, centers on a provocative conversation between Hoffman and his mentor, retired MIT Professor John R. Ehrenfeld, about what sustainability should be versus what it has become.
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Sabrina Sullivan, Erb ’14, Looks to the Future of Business
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abrina Sullivan, Erb ’14, cannot divine the future of business in a world that churns with political and socioeconomic unrest, climate-change effects, pervasive inequality and other unforeseen disruptions. At the Erb Institute, however, she is developing the acumen and skills to help companies understand these global uncertainties, identify the key drivers of change, develop alternative scenarios for the future and create long-term business strategies that are flexible, resilient and sustainable.
“Executive Chairman Bill Ford Jr. has stated his belief that mobility is a human right,” Sullivan explains. “My City as Customer analysis played into the high-level, strategic conversations of how Ford might become a sustainable and equitable mobility provider. The company’s Automotive Strategy Group seeks to understand whether Ford can intervene with current or emerging technologies, whether it should go for big bets or small wins, and where in these cities it should target its greatest efforts.”
“I would like to be a corporate futurist, so my work at Erb centers on futuring and innovation,” Sullivan says. “I think about ways to bring more perspective into business strategy through an understanding of megatrends and their interactions. I also develop scenarios that allow business leaders to be flexible when changes occur and to succeed in an uncertain future.”
Earlier, Sullivan worked with an Erb master’s project team to help the Global BrightLight Foundation, supported by Duke Energy, devise a business model and strategy to distribute solarpowered lamps to people without access to electricity. “We found value in creating a clean, affordable, decentralized energy system with potentially leapfrogging technology to improve people’s quality of life, support their economic development and avoid dependency on an electrical grid,” she explains. The team’s efforts led to a $1 million investment from the Global Sustainable Energy Partnership and the distribution of 40,000 lamps in some of the world’s poorest countries.
Prior to pursing a dual degree at the Erb Institute, Sullivan spent five years as a business analyst and consultant for Deloitte Consulting, where she gained valuable insights into a cross section of industries in the United States and her native Canada. Erb has overlaid her industry background with a diverse yet cohesive sustainability culture and systems-thinking approach while offering opportunities to explore the emerging field of strategic foresight.
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Sullivan took a lead role in developing the scenarios portion of KPMG’s “Expect the Unexpected: Building business value in a changing world” report for Rio+20, the 2012 United Nations Conference on Sustainable Development. Erb provided research support for the document, which identifies 10 global sustainability megaforces likely to impact businesses over the next 20 years. Sullivan currently serves as co-president of the Design+Business student organization at the Ross School, where she is collaborating with faculty to develop a new corporate foresight course to teach students the practice of scenario planning and its implications for the business world of tomorrow. During a 2012 summer internship at Ford Motor Co., Sullivan delved into the future of urban mobility by focusing on how cities function as ecosystems that must operate efficiently to provide mobility to their citizens. Working with Ford’s automotive researchers, planners and innovators, she created a market-segmentation analysis of 64 existing and emerging megacities in the global economy to identify similarities and differences in the change drivers shaping their diverse mobility needs. Her “City as Customer” work stream—part of Ford’s “Blueprint for Urban Mobility” initiative—contributed to a greater understanding of global mobility challenges and potential strategies to address them.
Sullivan’s penchant for systems thinking and innovation surfaced again last summer during a fellowship at the Canadabased Pembina Institute, where she led Canadian energy companies and other stakeholders in creating visions for energy in the future. She also fostered conversations about ways the energy industry could develop a more sustainable supply chain and how the adoption of innovative policies and tools could propel Canada toward a clean-energy future. “Our world is moving toward a point where diverse industries— such as automotive, information technology, energy, consumer products and health care—will have to collaborate in order to create disruptive innovations,” Sullivan says. “I’m looking for the job, the people and the opportunity that will allow me to tap into my love of trends and addressing complex problems to create a sustainable future.”
Adam Byrnes, Erb ’14, Finding Technological Solutions for Sustainability
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Simultaneously, Byrnes pursued renewable-energy solutions for the 1.3 billion people worldwide who lack access to electricity. His master’s project team, which included Emilia Sibley, Sabrina Sullivan and Jimmy Ward, all Erb ’14, worked collaboratively with the Global BrightLight Foundation, a nonprofit organization established by Duke Energy executives to distribute solar power to underserved populations. “We assessed the market and customers, talked to other players and lenders in the field, and put together a business plan for distributing a solar-powered lamp,” says Byrnes, whose
Byrnes’ master’s project served as a springboard to a 12week summer internship last year with Simpa Networks, an early-stage technology start-up based in Bangalore, India. The company is pioneering a prepaid meter system to furnish electricity on a pay-as-you-go basis to the estimated 400 million low-income India residents who currently rely on kerosene and other types of fuel for energy. “My job was to help the company evaluate new markets for their technology and gather input from customers,” Byrnes says. “It was a great experience that changed my perspective on the world. I wouldn’t have been able to have that experience without support from the Erb and William Davidson Institutes. This summer, Byrnes stayed closer to his Southern California roots by accepting a corporate internship at Microsoft in Seattle, where he conducted a market-entry study for Yammer, the industry’s leading enterprise social-network product for companies. However, even in a more traditional corporate setting, sustainability and entrepreneurship are still uppermost in his mind. He anticipates this dual focus will continue to shape his post-Erb career, whether he takes a full-time position with Microsoft, returns to work in the green energy sector or pivots into politics and public policy.
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Byrnes received an Erb Renewable Energy Scholarship in 2012 that enabled him to research and publish a written report on solar crowdsourcing, an emerging renewable-energy model that revolves around encouraging communities to invest in a locally placed solar array. Community residents benefit from the energy produced by the array, as well as from any return they make by selling surplus energy to the grid. Byrnes put his Ross School business-planning and marketing skills into practice for several months at Arborlight, a University of Michigan clean-energy start-up headquartered in the U-M’s Venture Accelerator. The company, led by Michigan professors Max Shtein and P.C. Ku, has developed patent-pending technology for a long-lasting, mercury-free, LED-based replacement for linear fluorescent tubes. Byrnes and fellow Erb Institute colleague Daniel Gerding helped Arborlight increase energy efficiency in lighting. Arborlight estimates these efficiencies will eliminate five metric tons of mercury from the U.S. waste-processing stream annually. The team won a $2,500 prize for the “Most Disruptive Idea” at the 2012 Clean Energy Venture Challenge.
corporate liaison was Alanya Schofield, Erb ’11, a commercial associate at Duke. The team’s efforts led to a $1 million investment from the Global Sustainable Energy Partnership and the distribution of 40,000 lamps in some of the world’s poorest countries.
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echnology holds the key to sustainability, says Adam Byrnes, Erb ’14, who has helped to commercialize several innovations in the field of renewable energy during his prior professional career and current graduate studies at the Erb Institute. “If we replace the technology we use now with more-efficient new technology, we can improve the way we utilize our natural resources,” he explains, comparing the advantages of say, a Tesla electric vehicle—which has a smaller carbon footprint—to the disadvantages of a conventional gas-guzzling car or truck. “Similarly, we can use innovative software, such as dashboards and mobile applications, to manage our energy needs remotely and increase our energy efficiency.” Software products that allow people to work from home rather than commute and to share and edit documents online, reducing paper usage, are other examples of how innovative technology can drive increased sustainability, he adds.
Berry Kennedy, Erb ’14, Applies Sustainability Principles to Business Practice
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oes Berry Kennedy, Erb ’14, have what some might call an “environmental brain”?
“I think I do because I use a systems perspective to see how things fit together, and I draw connections between disparate areas,” she says. “The reason I chose to go into the field of environmentalism and sustainability is because it encompasses many of my other interests in health, poverty and business development—all of which are impacted by the way we live and how we use our resources. Understanding any situation within its wider context is the broadest definition of an environmental brain, and it is something I do naturally.”
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Kennedy is passionate about the possibility of changing the way businesses and markets function to make them work for the benefit of society. Over the past two years, the Erb Institute has stoked that passion and given her the tools, experience and understanding to achieve her sustainability goal.
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As a member of the Ross School’s Social Venture Fund, Kennedy worked on a consulting project to help Mindful Meats, a company that brings local, organic, pasture-raised meat to market, develop a strategy for measuring its social impact. During her second year on the student-led impact investing fund, she served as director of fund development and spearheaded initiatives to build its organizational capacity, raise its visibility and strengthen its relationships with the ventureinvestment community. “I enjoyed looking at impact investing from the market level all the way down to the level of the individual social entrepreneur,” she says. A summer internship at Wal-Mart Stores Inc. in 2012 afforded Kennedy greater insight into corporate-sustainability strategies focused on improving energy efficiency and promoting renewable energy generation through wind farms and solar panels. “I worked in the Walmart Sustainability Department to help refine its global renewable-energy strategy,” she says “Over the course of my internship, I learned a great deal about the energy situation around the world and how to streamline the implementation of renewable-energy projects in different countries. It was a rare opportunity to put into practice the sustainability rhetoric that’s repeated every day in my classes.” Kennedy was named a Dow Sustainability Fellow in January and also completed her team master’s project in partnership with the Dow Chemical Company. The team worked with the Dow Sustainability Department as it developed a framework to help corporations take action to address ecosystem-services challenges related to fresh water.
“One of the great lessons I’ve learned is that to tackle any of the really substantive social and environmental problems we’re facing, we can’t leave the private sector out,” she says. “Policy advocacy and work by nonprofit groups is essential, but it must be accompanied by change in the way business is done. I believe the best approach is to invite everyone to the table.” That lesson hit home when Kennedy accepted a position as development and communications coordinator at the Mexican Fund for the Conservation of Nature in Mexico City after graduating from Yale University in 2008. “It was a transformational experience for me to work at the forefront of promoting partnerships between public and private stakeholders and for-profit and nonprofit organizations in Mexico and internationally to advance ecosystem-services markets and sustainable agriculture and tourism,” she says. “I saw the impact of new sustainability initiatives in emerging markets and gained an understanding of why environmental and social programs need to make economic sense at a very practical level, especially in poor areas.” In the future, Kennedy plans to pursue a career in sustainability, although she is not quite sure what direction that pathway will take. “To be successful, sustainability people have to be creative, because they don’t fit into an existing niche,” she says. “I hope to remain flexible and adaptable, so I can take advantage of opportunities that come along.”
Sheena VanLeuven, Erb ’15, Views Social Sustainability through a Business Lens
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Human trafficking refers to the trade in human beings for exploitation through forced labor, prostitution or other illicit purposes. While a company may be unaware that its products, premises, suppliers or contractors are associated with trafficking, it can suffer reputational, legal, regulatory and financial repercussions if abuses occur and are made public. To avoid such problems, companies can take proactive steps to institute strong human-rights policies and oversight in their operations and supplier networks.
“In the Peace Corps, I worked on the ground to address issues of poverty, women’s empowerment, gender equality and child labor,” explains VanLeuven, who grew up in Portland, Oregon, and earned an undergraduate degree in environment studies at the University of Chicago. “I didn’t realize it then, but most of those issues involved human rights.” From 2007 to 2009, VanLeuven led a four-person team that presented lessons on public health and environment to hundreds of community residents. She also helped to obtain grant funding and coordinate the construction of a community library for disadvantaged female students.
At the conclusion of her internship, VanLeuven presented her findings and recommendations to Ford’s senior management, providing the automaker with a solid research platform for future policy-making decisions. “I’m interested in working as a change agent within a large company where I can help to advance its sustainability work and achieve the best possible social and environmental outcomes,” she explains. “My internship enabled me to explore this interest in a corporate setting and complement my environmental background with professional experience in social sustainability.”
VanLeuven was assigned to Ford’s Sustainable Business Development and Supply Chain Sustainability departments, where she researched and analyzed trends to identify key human-rights and human-trafficking risks facing the automotive manufacturer and its network of suppliers. “The company already has a robust human-rights program in place and a strong code of conduct that governs its operations, joint ventures and suppliers,” VanLeuven explains. “My job was to help educate Ford management about human trafficking and how it might impact the company’s supply chain.”
Currently, VanLeuven is working with an Erb project team to examine and calculate various environmental tradeoffs in soft commodity sourcing. The students’ goal is to develop guidelines for businesses that can help decision makers select more sustainable raw materials for use in their products. “Companies have enormous potential to act as a force for good in the world,” VanLeuven remarks. “I want to work within organizations to make the business case for sustainable change and inspire them to be the best corporate citizens possible.”
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After her first year at the Erb Institute, VanLeuven pursued an opportunity for a summer internship at Ford, which has created industry-leading programs to protect human rights and advance social and environmental sustainability. “Interning at Ford offered me a way to view elements of my Peace Corps experience through a business lens,” she says. “While the angle was different, the theme—working on issues that affect people and communities—was the same. I felt I had come full circle.”
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louekanme, a rural town in the Republic of Benin where Sheena VanLeuven, Erb ’15, served as a Peace Corps volunteer for two years, is far removed from Ford Motor Co. in Dearborn, Michigan, where she worked as an Erb Institute intern last summer. Yet, when VanLeuven talks about human-rights issues and the need for greater social and environmental sustainability, she says the West African community and the American corporation share many of the same concerns and goals.
Created in 1996 through the generosity of Frederick A. Erb (BBA ’47) and his wife, Barbara, the Institute is a partnership between the School of Natural Resources and Environment and the Stephen M. Ross School of Business at the University of Michigan. The Erb Institute is committed to creating a socially and environmentally sustainable society through the power of business. Building on nearly two decades of research, teaching, and direct engagement, the Institute has become one of the world’s leading sources of innovative knowledge on the culture, technologies, operations and governance of business in a changing world. The Institute’s impact is realized most powerfully through our vibrant global network of students and alumni who are the transformative change agents in business, government and the non-profit worlds. The faculty, students and staff of the Institute wish to express our heartfelt thanks to the many donors, advisors and other program contributors who make our work possible.
Printed using vegetable-based inks on Cascades Rolland Enviro 100; an FSC-certified paper using 100% postconsumer fiber processed chlorine free using biogas energy. Please recycle. This report is available online at http://erb.umich.edu/ about/annual-reports/fy-2013/” Or point your mobile phone to: