Message from Sustainability Initiative Director Jason Jay
2023 was such an exciting year for the Sustainability Initiative.
We redesigned and revitalized our flagship course, S-Lab, allowing us to go deeper with both concepts and real-world projects. We dramatically expanded our executive education—some of the world’s leading professional service firms are coming to our door to build their capacity and meet the market’s needs. Our reach and impact in the climate policy arena continues to accelerate, and it’s really helped build a foundation for what MIT is doing as it ramps up its own courageous action in that domain. We have helped advance the field of sustainable finance, helping investors separate the signal from the noise around ESG, and helping create a whole new field of investing for systems change. And we continue to be inspired.
These challenges of sustainability and equity are daunting. But our students and alumni, our faculty and researchers, the companies, policymakers, and investors we engage with every day, they inspire us, they motivate us. And we are looking forward to a 2024 of continued action toward a future where humans and nature can thrive for generations to come, and we look forward to having you be part of that community.
Aggregate Confusion Project
Last year was a vibrant and productive year for the Aggregate Confusion Project.
Through academic publications, op-eds, and engagement with ESG regulators, we advanced what has become our core message: ESG information is valuable to investors when we can separate the signal from the noise; greater transparency about ESG ratings will make this a lot easier. Behind the scenes, we also built new data sets on carbon emissions and ESG reporting that will fuel the next wave of our research and impact.
Top 3 Highlights
2
Removing the Noise in ESG Data
The Need for Transparency in ESG Ratings
The Financial Times featured an article by ACP researchers Florian Berg, Julian Kölbel, and Roberto Rigobon, calling out two key problems with ESG rating agencies—conflicts of interest and disagreement among rating methodologies. Regulators can address these issues by barring raters from consulting to the firms they rate and by requiring greater transparency. With better information about what raters are trying to measure and the methodology they use, they can better understand the divergence of ESG ratings.
ACP researchers published two studies that demonstrate that we can reduce the noise in ESG data and better predict financial returns by combining ratings from several different agencies to remove noise in the data. Florian Berg, Julian Kölbel, Anna Pavlova, and Roberto Rigobon laid out this approach in the 2021 paper “ESG Confusion and Stock Returns: Tackling the Problem of Noise”). A June 2023 study by Berg, Andrew Lo, Kölbel, and Rigobon, along with Manish Singh and Ruixun Zhang, “Quantifying the Returns of ESG Investing: An Empirical Analysis with Six ESG Metrics,” suggests there is a significant signal in ESG rating scores that can be used for portfolio construction despite their noisy nature.
Congratulations ACP!
We’re thrilled to share that our Aggregate Confusion Project (ACP) researchers Florian Berg, Julian Kölbel, and Roberto Rigobon were awarded the 2023 Pagano and Zechner Prize for their paper published in the Review of Finance, the esteemed journal of the European Finance Association (EFA). The ACP group’s first study continues to garner attention, winning the 2023 Pagano and Zechner Prize at the 50th Annual Meeting of the European Finance Association in Amsterdam.
Read the winning paper here SI LinkedIn Post
KEY TAKEAWAY
“ I thought impact investing was something perpetrated by unscrupulous financial institutions trying to push products onto unsuspecting investors. Boy, was I wrong.”
Andrew Lo, Charles E. and Susan T. Harris Professor, Professor of Finance, and the Director of the Laboratory for Financial Engineering at the MIT Sloan School of Management.
Join Us
With four member companies, the Sustainability Initiative ACP group is working on a program of research to improve the quality of measurement and decision making in the financial sector. To join us as a member company, email Jason Jay.
MIT Climate Pathways Project
Toward fulfilling our mission to advance the adoption of evidence-based climate policy, the MIT Climate Pathways Project nearly doubled its reach to leaders in the public and private sectors in 2023. In addition to more direct engagements with the En-ROADS climate solution simulators, our work also saw its media coverage more than double.
3 Highlights
En-ROADS on the Mainstage
The MIT Climate Pathways Project team presented En-ROADS at two high-profile, international events where leaders from government, business, and civil society convened. MIT Sloan Sustainability Initiative Faculty Co-Director John Sterman presented the simulation at not one but two mainstage events at ChangeNOW in Paris. Climate Interactive Executive Director and Co-Founder Andrew (Drew) Jones, MS System Dynamics ’97, presented it at the Thomson Reuters Foundation Trust Conference in London. Between the two events, En-ROADS reached over 1,200 leaders in the public and private sector.
Teaching Climate Diplomacy at the Highest Level
En-ROADS was embedded in the US Department of State’s Foreign Service Institute’s weeklong Climate Diplomacy course in 2023. Offered several times a year, the course covers climate negotiations, US strategic perspectives, regional security concerns, climate policy modeling, and climate communications. Foreign service officers and agency staff from around the world attended. The En-ROADS session has been consistently ranked highest for its usefulness by participants after they return to their posts.
MIT Climate Pathways Project in the News
National news coverage of the exciting work of the MIT Climate Pathways Project continued to grow in 2023, more than doubling its coverage from 2022. A key highlight was an A-Section spread in The Washington Post, which published the project team’s analysis of former House Speaker Kevin McCarthy’s proposal to plant a trillion trees as a way to address climate change.
As our reach into the private sector continued to grow, the MIT Climate Pathways Project also saw significant gains in engagements with government agency staff, international government officials, and leaders in NGOs and academia, strengthening our ability to influence climate strategy across the broader policy ecosystem.
By the Numbers
8,508
across government, business, NGOs, and academia
1,761
5,674
1,073
Owning Impact Project
How can sustainable investing, and finance more broadly, evolve to a practice that leads to transformative change?
In 2023, we launched an exciting new research project at the MIT Sloan Sustainability Initiative—the Owning Impact Project. Led by Initiative Director Jason Jay, and supported by key collaborators at the TransCap Initiative, TWIST, University of Zurich’s Center for Sustainable Finance and Private Wealth, and MIT Sloan faculty members, we have begun researching the role and potential of systemic investing. A nascent investment logic that asks what fundamental change is required, and how financial capital might be allocated to enable such change.
1
3 Highlights
Harnessing the Power of Systemic Investing for Social Change
In December 2023, the Stanford Social Innovation Review featured an article about using systemic investing for social change, written by Jess Daggers, Alex Hannant, and Jason Jay.
Read more here.
“ To move beyond single-point solutionism, impact investing must use financial capital as both resource and connective tissue….it forces us to think beyond the efficacy of any one investment—be that a project, program, asset, or venture—and recognize that if we wish to shape and shift systems, we will need to resource multiple actions in concurrent, coherent, and adaptive ways.”
— Jason Jay
Alban Yau, SDM ‘23
Systemic Investing to Tackle the US Food Waste Challenge
3
How do we deploy capital for effective system change?
Since earning his Sustainability Certificate, Hanson Gong, MBA ’17, has moved across the country twice, gotten married, raised a puppy, and had his first child. He’s also transitioned from his early career in strategy and operations management consulting to private wealth impact investing at Oogway Capital. He’s particularly interested in the intersection of finance and systems change within the context of impact investing.
Alban Yau, SDM ’23, and his advisor Jason Jay, created a case study that presents an example of a systemic investing approach reducing food waste in the United States, charting the Fink family's and ReFED’s transformative journey. It features the Finks’ establishment of Millstone Farm, initial philanthropic grants, and private investments, as they dive into our country’s complex food system.
“MIT’s Owning Impact research comes at an exciting time. A common shared vision of 'systems change' is starting to emerge across the private sector, impact investing, philanthropy, academia, and the public sector. Alban Yau and Jason Jay have made an initial foray into understanding investing for systems change. Now the project has tailwinds to make an intellectual contribution and help build the field.”
— Hanson Gong, MBA ’17
“The most interesting part about engaging in systems change work is how much it changes you in the process. It eventually always turns inward at the individual level to enable transformation.”
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Are you an investor or asset owner with a systemic investing success story? We're collecting examples, and working to develop more case studies and best-practice insights for practitioners in the field.
Sustainability Initiative Education
200+
Students enrolled
The Sustainability Certificate program maintained strong enrollment during 2023, with over 200 students enrolled in our flagship courses and 90 students graduating with the certificate. We restructured our courses, redeveloping S-Lab into two courses: Business Strategies for a Sustainable Future, focused on teaching fundamental strategies to solve complex environmental and social challenges; and Sustainable Business Lab (S-Lab), now solely focused on the semester-long project. Additionally, we experienced strong demand for customized Executive Education programs.
Top 3 Highlights
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What do restorative justice and sustainability have in common?
More than you might think. Last spring, as part of S-Lab, we welcomed advocates dedicated to restorative justice, a rehabilitation model that encourages offenders to take responsibility for their actions and rebuild relationships through their commitment of time and resources. Our speakers included Hollywood film producer Scott Budnick, former New England Patriots captain Devin McCourty, celebrity barber and entrepreneur Victor “VicBlends” Fontanez, and Emmanuel “Noble” Williams of the Transformational Prison Project.
MIT Sloan Sustainability lecturer James Repenning, MBA ’02, explained the connection between restorative justice and sustainable business.“When you’re just trying to provide for yourself and your family, a lot of things go out the window,” he said. “When you are at the basic level, then you are going to eat the last fish, you are going to cut down the last tree. We have to take care of our communities if we want to take care of the world.”
Read more: From Hollywood to the gridiron, advocates champion restorative justice Watch: Youtube
Executive Education Responds to Demand for Sustainability Training
Leading global consulting firms are turning to MIT Executive Education and Sustainability Initiative faculty expertise, as they seek to upskill their leaders and professionals on climate change and sustainability.
“It’s critically important that we elevate our learning and development programs to stay ahead of the changing market, C-suite priorities, and business demands.”
— Chief learning officer at a major firm
Agile Education Strategies
Embracing sustainability in executive education, recognizing the link between restorative justice and sustainable practices, and leveraging generative AI in education underscore the importance of agile education strategies—strategies crucial for pivoting effectively in a fast-paced environment, ensuring that educational programs remain relevant and impactful in an ever-changing world.
3 ChatGPT in the Classroom: Rethinking Educational Paradigms
Imagine a classroom where technology doesn’t just replace old ways of doing things, but amplifies the best of studentcentric pedagogy. Welcome to the frontier of education, where Sustainability Initiative Director Jason Jay is blending generative AI with traditional coursework to create a personalized, impact-focused learning journey for his students.
“Generative AI provides the dual advantage of scalability and personalization, allowing each student to receive individualized attention that would be impossible in a typical classroom setting. But what’s important to note here is that technology serves as a tool, not a replacement, for human interaction and intellectual engagement.”
Read the full article here.
Get Involved
Explore our Strategies for a Sustainable Business Executive Education offerings each fall and spring.
Contribute to our flagship courses by becoming an S-Lab host. Learn more about how to get involved here.
Sustainability Lunch Series
It has been a dynamic year for our Sustainability Lunch Series, as we welcomed a diverse range of guest speakers to engage with our community.
Collaborating with student clubs and other MIT Sloan departments, we hosted 14 events, with an average attendance of over 100 participants per program. Our speakers shared valuable insights on a wide array of topics, including diversity in venture capital, corporate political engagement, and the energy transition. This year has truly been exceptional for fostering co-curricular engagement and knowledge-sharing.
The Intersection of Disability & Climate Change
In an engaging conversation led by Natasha Ansari, PhD ‘28, and Shannon L Hasenfratz, graduates of the 2023 MIT Master of City Planning program and active contributors to the MIT Department of Urban Studies & Planning Disability Justice and Planning initiative, we were honored to host Kam Redlawsk as a guest speaker in March 2023.
Kam, a distinguished industrial designer and advocate for individuals with rare diseases and disabilities, shared valuable insights on the significance of disability-inclusive climate justice. The discussion delved into strategies for making a meaningful impact that addresses the complex needs of people with disabilities.
Dismantling the Prison Industrial Complex
In collaboration with the MIT Prison Education Initiative, we presented a thought-provoking discussion moderated by Roxie Miles, a 2023 Wellesley College graduate. Our distinguished guest speaker was Bianca Tylek, the founder and executive director of Worth Rises and a leading expert and advocate of criminal justice reform.
Bianca shared her profound insights on the prison industry, shedding light on how business practices contribute significantly to sustaining this detrimental system. The event centered around Worth Rises' impactful initiatives in unveiling the commercialization of the criminal legal system, as well as their efforts to organize for the protection and restoration of economic resources extracted from affected communities.
Transforming the Food Supply Chain with Data and Technology
In partnership with the MIT Food Supply Chain Analytics and Sensing Initiative and skillfully facilitated by Bria Hardin-Boyer, MBA ’25, we had the pleasure of hosting Erin Baumgartner as a distinguished guest in fall 2023. Erin, the co-founder of Family Dinner—a subscription share service focused on fostering identity around local food and its growers—delved into the transformative use of data and technology. She shared how these tools are effectively employed to cultivate stronger connections among local growers, consumers, and businesses, all while playing a pivotal role in minimizing waste within our food supply chain. In addition to her work with Family Dinner, Erin now works as program development manager for the MIT Initiative on Combatting Systemic Racism
KEY TAKEAWAY
Commitment to Community Engagement
The Sustainability Lunch Series plays a vital role in keeping us connected to our community. It offers a platform for insightful discussions and networking opportunities, with a diverse range of topics that draw enthusiastic participation from attendees. This reflects our deep commitment to enhancing understanding of sustainability issues.
CALL TO ACTION
Get Involved
Join us in shaping the future of sustainability education and engagement! Attend our upcoming events, volunteer to be a guest speaker, or suggest topics and speakers that inspire you.
Jen Graham to get involved.
Alumni Engagement
Our alumni events in 2023 were marked by insightful discussions and networking opportunities.
From the engaging panel at the MIT Sloan Reunion discussing the potential of technology in addressing sustainability issues to the diverse subjects covered in our Sustainability Lunch Series and alumni networking events in NYC and San Francisco, our alumni community continues to inspire us and drive positive change in sustainability.
Top 3 Highlights
1 2
MIT Sloan Reunion 2023
If you missed the 2023 reunion, you missed Bethany Patten, EMBA ’13, moderating A Future with SustAInable Solutions, a panel featuring sustainability alumni, including Dan Harple, SF ’13, Lillian Kwang, MBA ’22, and Peter McHale, MBA ’22. Discussion centered on unleashing the full potential of technology to address pressing environmental, social, and governance (ESG) issues. Panelists talked about how they harnessed the power of the Internet of Things, Big Data, and Machine Learning to drive positive impacts on critical global challenges.
Alumni Guest Speakers
Throughout 2023, several accomplished sustainability alumni shared their knowledge and expertise at our Sustainability Lunch Series, including:
Sustainable Procurement for Positive Change
Alex Gerszten, MBA ’22
Navigating the Path from Sustainability Student to Alumni
Manuela Zoninsein, EMBA ’20, and Jeff Swiryn, SFMBA ’21
Careers in Sustainability
Chris Fort, SFMBA ’22
Corporate Political Engagement: Driving Sustainable Change
Amy Gobel, LGO ’17
Lighting the Way: Sustainability and Development Hand in Hand
Juliana Kerrest, MBA ’18
Sustainability Alumni Gather in NYC and
San Francisco
We hosted two alumni networking events during the summer of 2023. The initial event took place in New York City and was generously hosted by three distinguished MIT Sloan alumni from MUUS Capital Partners, Michael Sonnenfeldt, SB ’77, SM ’78; Kavita Patel, MBA ’21; and Ben Wolkon, MBA ’16. We collaborated on a second networking event with colleagues from peer institutions in San Francisco, providing MIT Sloan sustainability alumni with the opportunity to connect and network with like-minded peers from other esteemed schools.
Shaping Leaders Dedicated to Sustainability
Our alumni are at the forefront of driving sustainable change, showcasing their expertise and commitment through engaging discussions, networking events, and career insights. Their contributions not only inspire our current community but also highlight MIT Sloan's continued impact in shaping leaders dedicated to sustainability.
Stay Connected
Join us in continuing to make a difference in sustainability. Connect with us on social media and through our alumni network to stay updated on the latest sustainability trends, events, and opportunities to collaborate with fellow alumni and current students.
Join our Sustainability Alumni LinkedIn Group and our Sustainability Alumni WhatsApp Group to stay connected and informed within our alumni community.
In the News
Kate Isaacs, Jason Jay, Jeremy Gregory, Elsa Olivetti
2024 Goals and Objectives
As we chart our course in 2024, we are dedicated to enhancing our reach and influence. Beyond mere statistics, our goals reflect a deeper commitment to fostering meaningful connections, driving research that matters, and amplifying the voices and achievements of our students and alumni.
careers through
initiatives, and industry partnerships. Track the rate
positions, measuring the success
and placement metrics.
Institution Building
We would not have achieved so much last year without our amazing alumni, advisory board, affiliated researchers, donors, and everyone on our fantastic team.
Sustainability Initiative Advisory Board
We welcomed five new members* to our esteemed Advisory Board in 2023. This group of seasoned professionals provide us guidance on matters of strategy, fundraising, and execution, drawing on their extensive expertise and that of their personal and professional networks.
Read their bios here.
“As a new board member, I'm excited to share my fashion retail and e-commerce expertise, but also learn more about leading-edge sustainability topics related to my industry."
— Diana Ganz, EMBA ’14, Co-Founder, SuitShop
Caroline Brown CEO, Investor, Board Member and Advisor*
Kathryn Carlson Executive Director, Rappaport Institute for Greater Boston, Harvard University*
Carolyn duPont, MBA ’16 COO, Upstream Tech
Michael Even, SM ’84 Independent Investor
Ed Fish, MBA ’12 Vice President & General Manager, Varietal Solutions, Bay State Milling Company
Diana Ganz, EMBA ’14 Co-Founder, SuitShop*
Marine Graham, MBA ’13 Head of Supply Chain, Decathlon*
Bill Hilliard, SM ’84 Operating Partner, Generate Capital
John McEvoy, MS ’94 Managing Partner, Neponset Bay Capital LP
Ajay Mehta, EMBA ’13
Vice President, Engineering Technology, Chief Engineer Resources & Development, Shell
Cecilia Melin, SM ’89
Managing Partner, Asian Technology Advisors
David Miller, SB ’90, SM ’91
Investment Manager
Nicole Obi, MIT MCP, FE ’95
President, CEO, Black Economic Council of Massachusetts*
Keishin Sasaki, SM ’89
President, Representative Director, e-solutions
Michael Sonnenfeldt, SB ’77, SM ’78
Founder, Chairman MUUS & Company, Tiger21
Raymond Wood, SM ’90
Managing Director, Group Head Power, Renewables and Energy Infrastructure, Bank of America
Merrill Lynch
*New Board Members
2023 Staff
Dominic Farello
Assistant Director
Sophia Governo
Program Assistant
Jennifer Graham
Associate Director
Krystal Noiseux
Associate Director, MIT Climate Pathways Project
Fellows and Teaching Assistants
Kate Bartick, MBA '23
Maria del Mar Velasco, MBA ’23
Sandhya Mahadevan, MBA ’23
Our Team
Leadership
Jason Jay Director, Sustainability Initiative, Senior Lecturer, MIT Sloan School of Management
Bethany Patten Director, Policy + Engagement, Sustainability Initiative Senior Lecturer, MIT Sloan School of Management
Roberto Rigobon
Co-faculty Director, Sustainability Initiative, Society of Sloan Fellows Professor of Management
John Sterman
Co-faculty Director, Sustainability Initiative, Jay W. Forrestor Professor of Management
Alejandra Olazabal Tamayo, MBA ’24
Paige Schank, MBA ’23
Founding Members, Aggregate Confusion Project
MassPRIM
MFS
AQR
Axioma
Asset Management One
Researchers CPP
Pamela Duke
Undergraduate Research Assistant
Joy Jackson
Graduate Research Assistant
Allison Shepard
Graduate Research Assistant
Jessica Wei
Undergraduate Research Assistant
Researchers OIP
Oliver Gottfried
Postdoctorial Fellow
Alban Yau
Research Assistant, SDM ’23
Researchers ACP
Jitendra Aswani
Postdoctoral Associate
Florian Berg
Research Scientist
Angela Chen
Research Scientist
Giulia Crippa Researcher
Thomas de Montaigne de Poncins
Research Assistant, MFin ’25
Nora Donnelly
Undergraduate Research Assistant
Cristian Foroni Researcher
Guil Hayoun
Research Assistant, MFin ’25
Florian Heeb
Postdoctoral Associate
Franziska Hittmair
Researcher
Esther Kohler
Postdoctoral Associate
Julian Kölbel
Research Affiliate
Lajos Kossuth
Postdoctoral Associate
Jérémie Lecoutre
Research Assistant, MFin ’24
Isabella Loaiza
Postdoctoral Associate
Jaime Oliver
Visiting Scientist
Adi Rubinstein
Research Assistant, SFMBA ’24
Aneil Tripathy
MCSC Impact Fellow
Bram van der Kroft
Postdoctoral Associate
Our Donors
We are honored to be regarded by donors as a highly promising investment in the sustainability field. Our loyal and generous supporters make it possible for us to continue to pursue our mission.
Robert G. Ackerley, ’80
Anonymous Foundation
Joan T. Bok
Yue Chen, PhD ’05
James B. Ellis II, SM ’80
Michael Even, SM ’84
Edward Fish, MBA ’12
Hanson Gong, MBA ’17
Hamid Hakimzadeh, ’73
William J. Hilliard, SM ’84
John P. Houston, SM ’94
Joanne B. Johnson
Mitch Julis
Dorothy and Robert King
John D. SF ’94 and Aedie McEvoy
Cecilia B. Melin, SM ’89
Kirsten and Dwight Poler
Keishin Sasaki, SM ’89
Gil Simon, MBA ’03
Michael W. Sonnenfeldt, ’77, SM ’78 and Katja Goldman Akira Sugano, SM ’86
TransCap Initiative
Raymond S. Wood, SM ’90 and Mary Anne J. Kim
Join us as a donor in 2024 and invest in a more sustainable future.