Business and Environment

Business and Environment is a featured research topic and an initiative at Harvard Business School.
The vital connection between the natural environment and the business world has long been a central focus of our research at HBS – from Richard Vietor’s study of business-government relations in U.S. energy policy in the 1980’s to Michael Porter’s new concept of the relationship between the environment and competition in the 1990’s. Today, our faculty members focus on corporate environmental strategy, operations and reporting; sustainable cities and infrastructure; the role of government and environmental policy; clean energy generation and demand-side energy efficiency; and the effective management of natural resources essential to human prosperity.
  1. BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

    Uma R. Karmarkar and Bryan Bollinger

    As concerns about pollution and climate change have become more central in public discourse, shopping with reusable grocery bags has been strongly promoted as environmentally and socially conscious. In parallel, firms have joined policy makers in using a variety of initiatives to reduce the use of plastic bags. However, little is known about how these initiatives might alter consumers' in-store behavior. Using scanner panel data from a single California location of a major grocery chain, and completely controlling for consumer heterogeneity, we demonstrate that bringing your own bags simultaneously increases purchases of environmentally friendly as well as indulgent (hedonic) items. We use experimental methods to further demonstrate causality and to consider the effects of potential moderators. These findings have implications for decisions related to product pricing, placement and assortment, store layout, and the choice of strategies to increase the use of reusable bags.

    Keywords: grocery shopping; reusable bags; licensing; priming; goals; hedonic; Marketing Strategy; Consumer Behavior; Environmental Sustainability; Retail Industry;


    Karmarkar, Uma R., and Bryan Bollinger. "BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment." Journal of Marketing 79, no. 4 (July 2015): 1–15. (Revised December 2014.) View Details
  2. American Electric Power: Facing the Challenges of Distributed Generation

    Richard H.K. Vietor and Hilary White

    American Electric Power, like most utilities in the USA, is currently exposed to distributed generation and the problem of net-metering. Solar installations in particular have been heavily subsidized, by the state and by regulation, which does not allow grid operators to to recover their fixed costs. This results in stranded assets and cross-subsidies from poor to rich.

    Keywords: energy; Electricity; utilities; Electric Power Generation; net metering; distributed generation; disruptive innovation; energy markets; solar power; wind power; solar; wind; subsides; legislation; regulation; Disruption; Energy; Energy Generation; Renewable Energy; Problems and Challenges; Risk and Uncertainty; Technology; Business Strategy; Corporate Strategy; Energy Industry; Green Technology Industry; Utilities Industry; United States;


    Vietor, Richard H.K., and Hilary White. "American Electric Power: Facing the Challenges of Distributed Generation." Harvard Business School Case 716-008, June 2015. View Details
  3. Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste

    John A. Quelch and Margaret L. Rodriguez

    In October 2013, Colgate-Palmolive Company, the world's leading oral care company, was about to launch its new Colgate® Maximum Cavity Protection™ plus Sugar Acid Neutralizer™ toothpaste in Brazil. Oral care category accounted for 46 percent of Colgate's $17.4 billion sales worldwide in 2013. The new toothpaste was clinically proven to reduce and prevent cavities more effectively than toothpaste with the same level of fluoride alone. All major industry players, including Procter & Gamble, GlaxoSmithKline and Colgate itself, had long ago launched products with the maximum amount of fluoride allowed by Health authorities. Yet cavities remained a significant threat to public health in many countries, both developing and developed. As Suzan Harrison, Colgate's president of Oral Care, prepared to launch CMCP+SAN in Brazil, the world's third largest oral care market, her executive team was divided over the product's positioning and pricing. Should it be positioned as a basic product to maximize reach for its health benefits or as a premium product for consumers who sought superior cavity protection?

    Keywords: marketing; new product management; Consumer segmentation; global marketing; corporate social responsibility; healthcare; sustainability; Health Care and Treatment; Environmental Sustainability; Marketing; Segmentation; Product Development; Product Launch; Corporate Social Responsibility and Impact; Consumer Products Industry; Brazil; United States;


    Quelch, John A., and Margaret L. Rodriguez. "Colgate-Palmolive Company: Marketing Anti-Cavity Toothpaste." Harvard Business School Case 515-050, May 2015. (Revised May 2015.) View Details
  4. The Type of Socially Responsible Investments That Make Firms More Profitable

    George Serafeim

    Keywords: sustainability; corporate social responsibility; corporate sustainability; Investing; investment; investment management; Corporate Social Responsibility and Impact; Profit; Investment; Environmental Sustainability;


    Serafeim, George. "The Type of Socially Responsible Investments That Make Firms More Profitable." Harvard Business Review (website) (April 14, 2015). View Details
  5. Statoil: Transparency on Payments to Governments

    George Serafeim, Paul M. Healy and Jérôme Lenhardt

    The Statoil case describes the challenge of increasing transparency, in extractive industries, around host county government payments. The case describes Statoil's reasoning behind voluntarily disclosing host country government payments, and the events that led to this decision. It also articulates how both management and the board were thinking about difficult trade-offs in terms of costs and benefits in making this decision.
    The case also describes self-regulatory and regulatory efforts to increase transparency. The first was the Extractive Industries Transparency Initiative (EITI), which is a set of reporting standards published by a coalition of companies, governments and non-governmental organizations (NGOs). The second was legislation enacted in the United States under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which requires certain disclosures by natural resource extractive companies that are subject to the reporting requirements of the US Securities and Exchange Commission (SEC). The SEC issued a final rule implementing the Dodd-Frank Act in 2013 but that rule had most recently been vacated by the US District Court and is now subject to being re-written by the SEC.
    Therefore, the case allows for a discussion of firm-specific voluntary, industry self-regulatory and regulatory efforts in increasing transparency in extractive industries.

    Keywords: corruption; disclosure; disclosure strategy; regulation; industry self-regulation; corporate governance; corporate accountability; bribery; sustainability; corporate social responsibility;


    Serafeim, George, Paul M. Healy, and Jérôme Lenhardt. "Statoil: Transparency on Payments to Governments." Harvard Business School Case 115-049, March 2015. View Details
  6. Corporate Sustainability: First Evidence on Materiality

    Mozaffar Khan, George Serafeim and Aaron Yoon

    An increasing number of companies make sustainability investments, and an increasing number of investors integrate sustainability performance data in their capital allocation decisions. To date however, the prior academic literature has not distinguished between investments in material versus immaterial sustainability issues. We develop a novel dataset by hand-mapping data on sustainability investments classified as material for each industry into firm-specific performance data on a variety of sustainability investments. This allows us to present new evidence on the value implications of sustainability investments. Using calendar-time portfolio stock return regressions we find that firms with good performance on material sustainability issues significantly outperform firms with poor performance on these issues, suggesting that investments in sustainability issues are shareholder-value enhancing. Further, firms with good performance on sustainability issues not classified as material do not underperform firms with poor performance on these same issues, suggesting investments in sustainability issues are at a minimum not value-destroying. Finally, firms with good performance on material issues and concurrently poor performance on immaterial issues perform the best. These results speak to the efficiency of firms' sustainability investments, and also have implications for asset managers who have committed to the integration of sustainability factors in their capital allocation decisions.

    Keywords: sustainability; corporate sustainability; corporate social responsibility; investment; investment management; investment return; investment strategy; Investments; Corporate performance; Corporate Social Responsibility and Impact; Performance; Investment; Environmental Sustainability;


    Khan, Mozaffar, George Serafeim, and Aaron Yoon. "Corporate Sustainability: First Evidence on Materiality." Harvard Business School Working Paper, No. 15-073, March 2015. View Details
  7. Unilever: Combatting Global Food Waste

    David F. Drake, Janice H. Hammond and Matthew G. Preble

    The global consumer goods company Unilever was on pace to hit a number of aggressive targets by 2020 as part of the Unilever Sustainable Living Project, including a goal to halve the waste associated with the disposal of its products. Unilever's Chief Supply Chain Officer Pier Luigi Sigismondi and his team were working towards this goal and had chosen to first focus on three key areas—sugar, tomatoes, and tea—and had analyzed where in the 'farm to fork' value chain product was wasted. This analysis showed that very little was wasted within areas of the value chain directly controlled by Unilever, and most occurred either upstream with its suppliers or downstream with consumers. How could Unilever encourage these actors to change established practices and entrenched behaviors within a short timeframe to help Unilever meet its sustainability targets and also to improve the operations of its partners in the value chain? By encouraging consumers to better manage their food purchases, did Unilever risk harming its own sales or those of its retail customers? Could Unilever encourage industry-wide changes to have a real impact on global environmental sustainability?

    Keywords: food waste; sustainable business and innovation; sustainable supply chains; Sustainable Operations; organization alignment; Organizational Change and Adaptation; Environmental Sustainability; Operations; Supply Chain Management; Growth and Development Strategy; Food; Agribusiness; Strategy; Beauty and Cosmetics Industry; Consumer Products Industry; Food and Beverage Industry; Forest Products Industry; Manufacturing Industry; Retail Industry; North and Central America; Europe; Asia; Africa; Latin America; India;


    Drake, David F., Janice H. Hammond, and Matthew G. Preble. "Unilever: Combatting Global Food Waste." Harvard Business School Case 615-040, March 2015. View Details
  8. Making the Business Case for Environmental Sustainability

    Rebecca Henderson

    Can a business case be made for acting sustainably? This is a difficult question to answer precisely, largely because there is no generally accepted definition of the term "sustainability". Is it acting sustainably to protect the human rights of the firm's workforce? To invest in education in local communities? To switch to renewable power? All of these actions might improve social welfare, and some of them might improve profitability but they are very different, and the business case for each of them is similarly likely to look quite different. Here I begin to explore the issue by focusing on a more limited question, namely whether a business case be made for acting in an environmentally sustainable way, which I define as acting in any way that reduce a firm's environmental footprint.

    Keywords: Corporate Social Responsibility and Impact; Decision Making; Environmental Sustainability;


    Henderson, Rebecca. "Making the Business Case for Environmental Sustainability." Harvard Business School Working Paper, No. 15-068, February 2015. View Details
  9. Solar Geoengineering

    Joseph B. Lassiter III and Stephanie Puzio

    On December 8th 2013, as Dr. David Keith was leaving the set of the Colbert Show, he couldn't help but replay the interview over and over in his mind. Did he actually get his point of view on solar geoengineering across or had he just added to the stereotype that he was more of a 'mad scientist' than a scholar? Science knew, beyond doubt, that volcanoes cooled the planet by forcing sulfates high into the stratosphere. This cooling effect had been recorded in history over and over again. The question that Keith and many other climate scientists wanted to answer was: could humanity learn how to design, deploy, and manage similar cooling effects to manage the threats from climate change?

    Keywords: climate change; geoengineering; carbon; carbon emissions; energy; nuclear; nuclear energy; de-extinction; Aerospace Industry; Biotechnology Industry; Chemical Industry; Energy Industry; Green Technology Industry; Technology Industry;


    Lassiter, Joseph B., III, and Stephanie Puzio. "Solar Geoengineering." Harvard Business School Case 815-081, February 2015. View Details
  10. China Shenhua Energy Company

    Forest L. Reinhardt, G. A. Donovan and Keith Chi-ho Wong

    A leading Chinese energy firm, active in coal mining and electric power generation, analyzes coal-to-liquids technology in light of energy security and environmental concerns.

    Keywords: energy; environment; China; CO2; coal mining; Electricity; sustainability; Energy; Strategy; Business and Government Relations; Energy Generation; Energy Sources; Environmental Sustainability; Energy Industry; Utilities Industry; China; Asia;


    Reinhardt, Forest L., G. A. Donovan, and Keith Chi-ho Wong. "China Shenhua Energy Company." Harvard Business School Case 715-026, February 2015. View Details
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