Business and the Environment

Course Number 1140

Professor Forest Reinhardt
Assistant Professor Michael Toffel
Fall, 20 Sessions
Sessions will be distributed from September 2 through December 2, 2009
Paper

Career Focus

Companies in many industries are facing new environmental challenges, including uncertainty in domestic and international environmental regulation as well as increasing demands for accountability and transparency regarding their environmental efforts and performance. In this climate, general managers need to understand the factors that drive business value when dealing with the environment, both to recognize business opportunities and to mitigate business risks. This course also helps prepare managers to better understand how to engage these issues with stakeholders including investors, regulators, and non-governmental organizations-as well as customers and suppliers.

Educational Objectives

This course focuses on identifying opportunities to create business value from environmental and sustainability issues, and executing on these opportunities. Aimed at building critical skills for general managers, the course integrates ideas from several different RC courses, especially from Strategy, BGIE, and TOM. For example, Strategy-related topics include identifying and exploiting opportunities where customers are willing to pay more for superior environmental attributes, or where aggressive environmental performance can result in an advantageous cost position. TOM topics include how to measure and improve environmental performance in a company's operations and how to "green" supply chains. BGIE topics include analyzing how government interventions into markets reallocate property rights and affect industry structure. We also discuss how new expectations by a company's stakeholders and new regulations governing corporate environmental management and performance simultaneously limit and create new strategic opportunities for companies.

Course Content and Organization

We will hold traditional case-based sessions on the first eighteen days of the X schedule, and then take a break from meeting while student teams write their papers. The last two sessions, on the last two days of the X schedule, will be devoted to student presentations of their papers' findings.

Topics covered in the course include:

Foundations of environmental policy and management
Property rights, environmental externalities, cost-benefit analysis, risk analysis

Business strategy and the environment
Competitive advantage, environmental product differentiation

Environment in operations and supply chain management
Sustainable operations, green building, greening supply chains, sustainable agriculture

Special focus: Global climate change and the firm
Voluntary greenhouse gas reduction targets, carbon credits and offsets, partnerships with non-governmental organizations

Students will form teams of two to four to write their papers, which should be based on a combination of public sources and interviews. Sample topics might include an evaluation of a strategic initiative with significant environmental implications in an established firm, or a preliminary assessment of a new venture in "cleantech." Paper topics must be selected by the teams and approved by the instructor within the first few weeks of the course.