07 Dec 2012
by Ray A. Goldberg and Lorin A. Fries
Corporate Head of Agriculture Hans Jöhr's mind raced in anticipation of the executive board meeting that afternoon. Jöhr recognized the meeting as a key opportunity to strategize far into the future, reexamining how his team's efforts in sustainable agricultural sourcing supported Nestlé's position as the world's leading nutrition, health and wellness company. The company had undertaken to impact three of the world's most urgent challenges—nutrition, water and rural development—and Jöhr's team was fundamental to each of these pillars. Yet the forces changing the global food system were formidable: unprecedented levels of hunger, obesity and chronic disease; land degradation, frequent natural disasters, and critical threats to water supply; population growth by the billions in the coming decades, along with increased urbanization; and a volatile and tentative world economy. In the face of such threats and complexity, how could Hans Jöhr ensure that Nestlé's agricultural raw materials were safe, high quality, of consistent supply, and sustainably and ethically and economically produced? How can the procurement process enable the small scale producer to become a viable partner in the milk production models that Nestlé has developed in the developing world? Further, how could his team excel beyond the company's day-to-day business and enable Nestlé's visions for the future? Read more
22 Oct 2012
by Arthur I Segel, Nicolas Ibanez and Jay Verjee
Warren Adams founded Patagonia Sur in 2007 as one of the world's first for-profit land conservation businesses. His goal was to purchase over 100,000 acres of land in southern Chile and to run a variety of sustainable businesses to generate annual returns for investors. Patagonia Sur planned to derive various streams of revenue from the land—including eco-tourism, sustainable land development, carbon credits, water rights and eco-brokerage—thereby giving a financial return to investors on top of achieving a positive environmental impact. By 2011, Warren had raised over $20 million from high net worth individuals and Patagonia Sur had over 60,000 acres in Patagonia under management. However, institutional investors seriously questioned whether Patagonia Sur could ever do more than break even on an annual basis. Further, they worried that in fact the risk of the investment went up significantly as the company spent both its capital and management time on so many different revenue streams. In addition, some investors felt that for-profit conservation was morally wrong. Warren needed to convince both individual and institutional investors that his vision would succeed in both generating returns and preserving the natural beauty of Patagonia. Read more
09 Oct 2012
by Francesca Gino, Michael W. Toffel and Stephanie van Sice
Seeking to go beyond global best practices in reducing environmental impacts, FIJI Water, a premium artesian bottled water company in the United States, launched a Carbon Negative campaign that would offset more greenhouse gas emissions than were released by the company's operations and products. The case examines the controversies surrounding this program as well as the program's impacts on the environment and FIJI Water's brand image. The company also faced decisions regarding how to best manage its relationship with the Fijian government, which recently dramatically raised imposed export taxes and could limit FIJI Water's access to water, its primary raw material. The case enables students to better understand the challenges of implementing an environmental strategy and of negotiating with parties that control raw materials, and invites discussion of the effectiveness of various approaches and the general lessons for the management of companies seeking to operate in an environmentally responsible manner. Read more
10 Jan 2012
by John D. Macomber, Regina Garcia-Cuellar, Griffin H. James and Frederik Nellemann
In this case, a property company, a water privatizer, and municipal engineers explore the causes of and solutions to a severe water shortage in Mexico City, a great global capital. The protagonist is a real estate investor doing due diligence on the magnitude of the crisis, the impact on the firm's operations, and the likelihood of resolution. Due diligence includes interviews with city water officials and global-scale water privatizers. This case is an excellent introduction to city scale infrastructure issues on a global level. A related case, "Water Shortage and Property Investing in Mexico City," HBS No. 210-085, contains more real estate finance and less water infrastructure finance material than this case does. Read more
06 Oct 2011
by Deishin Lee and Stephanie van Sice
This case explores a method of value creation through exploiting synergies that exist in an environment where there is diversity. The context of the case is a farm where biodiversity is leveraged to create value. This is contrasted to industrial farming, which operates on the principles of economies of scale. The case also provides an opportunity for students to discuss the environmental impact of different types of operating systems. Read more
15 Feb 2011
by John D. Macomber, Chad M. Carr and Fan Zhao
Private sector entrepreneur in China with advanced solid waste management capability competes with state owned enterprises and also government policies supporting a rival technology. Wen Yibo has used engineering expertise and political savvy to build a major privately held company providing the entire supply chain of water treatment, waste water, and integrated municipal solid waste capabilities. The company's services include engineering, manufacturing, consulting, "engineer, procure construct," "build operate transfer," and other forms of public-private partnership. The handling of municipal solid waste takes up to 50% of the annual budget of many urban areas in the developing world. The ability to use private sector funds and expertise could be critical to urban development. However, state owned enterprises can observe the success of private business and can enter and compete using their own skills, contacts, and inexpensive capital. The government may also be interested in subsidizing incineration over composting as a part of "waste to energy" strategy, even though this is less efficient than generating electricity from a coal or gas plant. The company has to decide whether to stick to its waste management roots or expand into an opportunistic incineration technology with minimal and nominal waste-to-energy benefits. Read more
04 Feb 2011
by Joseph B. Lassiter III and David Kiron
One day during the summer of 2008, Paul Maeder, co-founder and general partner of Highland Capital Partners (HCP), was walking with his wife around Reykjavik, Iceland, marveling at how clean the city felt and at the widespread use of naturally occurring geothermal energy to power everything from trams to buildings. "They don't treat their air and water like an open sewer," Maeder thought. "This is the way people need to live and this is the way people are going to have to start living in 10 or 20 years." To his wife, Maeder said aloud, "I think Highland should revisit the idea of investing in cleantech." Read more
03 Jan 2011
by Arthur A. Daemmrich, Forest L. Reinhardt and Mary Louise Shelman
Arcadia Biosciences is an entrepreneurial California agricultural biotech company seeking to earn carbon credits by modifying commodity crops for use in China and India. Eric Rey, Arcadia's CEO, faced a strategic inflection point in early September 2008. The company had a plan to share carbon credits allocated by the United Nations Clean Development Mechanism Executive Board to China, for use of Arcadia's rice varieties, since they enabled farmers to reduce nitrogen fertilizer use, in turn lowering greenhouse gas emissions. But the company's proprietary traits for nitrogen use efficiency, salt tolerance, and water use efficiency also had more conventional paths to market based on licensing deals to large seed companies. Alternatively, Arcadia could acquire a seed company and develop and market its seed directly. A different near-term growth area involved commercializing enriched safflower oil, which had undergone several proof-of-concept tests and for which Rey foresaw a clear market in nutritional supplements and functional foods. The case provides context on the company; describes advances in crops genetics focused to climate change and associated resource issues of fertilizer use, water use, and soil salinity; and poses strategic choices for a start-up company operating at the intersection of business, agriculture, and climate change. Read more
08 Nov 2010
by Michael Chu and Namrata Arora
YES BANK, founded in 2003 and highly successful, has consistently been profitable meeting the Indian government's Priority Sector Lending (PSL) requirements, unlike virtually all other private sector banks, which view PSL activity as a necessary but loss-making part of their portfolio. To do this, YES BANK created a distinct Development Banking practice, under the purview of the Corporate Finance division. But now, the Development Banking team is contemplating going to the board to take the concept one step further: pro-actively investing in PSL-qualifying activities not as a matter of regulatory compliance but as business. Should the bank devote significant financial and human resources into an ambitious Financial Inclusion Program to serve previously unbanked rural populations through a rapid expansion of its branch network and the use of nonbank business correspondents? In addition, should the bank commit part of its scarce capital to Tatva Capital, a private equity venture focused on renewable energy, clean technology, waste management, water and sanitation, food and agribusiness, affordable housing, healthcare, and education and livelihood creation? Is the board ready to incorporate development banking into the mainstream of the bank, or will this turn out to be a major error in judgment? Read more
21 Jun 2010
by Robert G. Eccles, Amy C. Edmondson and Abhijit Prabhu
The Brooklyn, New York, neighborhood Down Under Manhattan Bridge Overpass (DUMBO) has seen a revitalization since the late 1970s. The neighborhood's business improvement district (BID) is charged with supplementing New York City's efforts in several areas, including safety, sanitation, marketing, promotional programs, capital improvements, and beautification. Since 2007, the DUMBO BID has done "small things that are collectively big" to improve the area and are in line with New York City's "plaNYC," a blueprint to become a "sustainable city" by increasing water quality, energy efficiency, and open space while decreasing greenhouse gas emissions. This year, the DUMBO BID must decide if it should continue its small actions or pursue a neighborhood-wide Leadership in Energy and Environmental Design (LEED) rating while constrained by its budget, staff size, and the recession. Read more
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