Business & Environment

Business & Environment InitiativeBusiness & Environment Initiative   

Inspiring innovation and action at the intersection of business and environment

Impact Stories

Addressing Climate Change through Agriculture

Charley Cummings, MBA 2011

Sustainable Operations

Michael Toffel, Faculty Chair; Senator John Heinz Professor of Environmental Management

Wal-Mart: For Better or Worse

Rebecca Henderson, MBA 1985 Professor, Harvard Business School

Opportunities in Resource Industries

Vikas Mouli, MBA 2016

MBA Experience

As an MBA student at HBS, you will prepare yourself for leadership in a rapidly changing world in which natural resources are increasingly scarce and the threat of climate change ever more urgent.

→How organizations can connect with students

Faculty & Research

Accounting for Product Impact in the Consumer-Packaged Foods Industry

By: Amanda Rischbieth, George Serafeim and Katie Trinh

2020
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Working Paper

We apply the product impact measurement framework of the Impact-Weighted Accounts Initiative (IWAI) in two competitor companies within the consumer-packaged goods industry. We design a methodology that allows us to calculate monetary impact estimates on customer health, access and affordability of products and recyclability, among other factors. Our results indicate substantial differences in the impact that competitors have through their products. These differences demonstrate how impact measures reflect business strategy choices and informs decision-making on industry-specific areas, including food reformulation and product placement.

Algramo

By: Michael Chu, Monica Silva and Mariana Cal

SEPTEMBER 2020
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Case

Algramo, recognized for reducing food prices in Chilean low-income neighborhoods through dispensers eliminating packaging, has developed a model to end single-use plastic in the FMCG (fast-moving consumer goods) industry. Beginning with a partnership with Unilever Chile, this has attracted global interest from FMCG giants and environmental NGOs, and capital from foreign impact investors. Algramo’s board has approved a joint venture with a Dutch NGO to take the model to Indonesia, the world’s second-largest source of plastic leakage into the oceans. Meanwhile, Chile has been hard hit by the Covid-19 pandemic, certain to bring great hardship to Chile’s low-income population. Algramo’s founder and CEO José Manuel Moller must decide whether to continue with the Indonesia project (and other initiatives in New York City and Europe) or focus the company’s efforts on Chile.

Climate Change Is Going to Transform Where and How We Build

By: John D. Macomber

2020
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Book Chapter

As fires, floods, and droughts increasingly threaten homes, businesses, and other institutions, climate risk has become financial risk. This implies that homeowners and investors have been making location decisions without properly pricing the cost of potential peril, and that the government has been enabling the oversight. It’s not just homeowners investing recklessly—many businesses have been equally short-sighted in where they place new assets, such as factories, and what to do with existing assets in once-safe areas now threatened by these perils. While laudatory efforts continue to mitigate climate change at the international level, it’s long past time to accept that the climate is already irreversibly changing, and we must adjust our mindset accordingly. We can’t just keep piling sandbags, pumping basements, dousing flames, and expecting government bailouts forever; a methodology is needed for homeowners, businesses, mortgage holders, governments—all of society—to figure out which assets to reinforce and what other courses of action are available. Alas, we seem to be headed in the wrong direction. While virtually no private insurance companies retain residential flood risk in Florida, Virginia, and other coastal states due to sea rise, government-subsidized programs such as NFIP continue to keep residences insured. Making things even worse is a general lack of restrictions on where one can build and what can be built. A society that prides itself on free will and self-determination is loath to say what a property owner can and cannot build on their own land as long as it meets rudimentary building and zoning codes: So more and more people move into harm’s way in flood plains, low-lying coastal areas, and tinder dry western landscapes. There are five basic choices in investing in resilience: reinforce, rebuild, rebound, restrict, and retreat. Together, they can be used as a decision-support tool for what to do with assets exposed to climate risk.

Measuring the Cost of Corporate Water Usage

By: DG Park, George Serafeim and T. Robert Zochowski

2020
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Working Paper

We develop a methodology that calculates the impact that organizations have on the environment through their water consumption relating to water stress risk. Using the methodology, we derive estimates for four companies that show how assumptions on the geographic location of the water withdrawal and use of different prices for water across geographies lead to variation in these estimates. We conclude with a framework guiding a user to understand the conditions under which a methodology might lead to over- or underestimation of water costs.

Climate Rising Podcast

Financial Regulation and Climate Risk Management

07 JUL 2020
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Climate Rising

Explore different approaches to modeling and managing climate risk from the vantage points of industry leaders Robert Litterman, a seasoned risk management expert; Nushin Kormi, a specialist in sustainable finance; and Kevin Stiroh, a financial regulator. The discussion, moderated by Professor Ramana Nanda, focuses on the concept of transition risk—the potential consequences if climate regulations are imposed gradually or suddenly—and investment strategies to prepare for and mitigate this risk. This is one of 4 new episodes this summer based on live content from the Harvard Business School Climate Risk conference held earlier in 2020.