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.

Featured Works

 

  1. Case | HBS Case Collection | December 2020

    Prime Coalition: Catalytic Capital for Climate Innovation

    Ramana Nanda, Benjamin N. Roth and Olivia Hull

    With long development timelines and high risk, new energy technologies were often left to languish in the “valley of death,” unable to raise enough funds to bring a product to market. In 2014, Sarah Kearney founded the nonprofit Prime Coalition to solve this problem. At the beginning, Prime’s role as a financial intermediary involved seeking out the most promising market-based technology solutions to climate change and recruiting foundations or philanthropists to fund them. In 2019, Prime changed course, adopting a portfolio approach with its Prime Impact Fund. By the end of the year, Prime had raised $40 million in philanthropic capital for its new fund. Once the funds were invested in promising energy startups, Prime planned to try its hand at recruiting traditional investors to back the same companies. Could Kearney convince traditional investors that these investments were worth the risks?

    Keywords: Energy Conservation; Renewable Energy; Social Entrepreneurship; Venture Capital; Investment; Innovation and Invention; Technological Innovation; Mission and Purpose; Science-Based Business; Nonprofit Organizations; Social Enterprise; Energy Industry; Technology Industry; Green Technology Industry; United States;

    Citation:

    Nanda, Ramana, Benjamin N. Roth, and Olivia Hull. "Prime Coalition: Catalytic Capital for Climate Innovation." Harvard Business School Case 820-007, February 2020.  View Details
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  2. Case | HBS Case Collection | January 2020

    Governing PG&E

    Lynn S. Paine and Will Hurwitz

    The five commissioners of the California Public Utilities Commission (CPUC) listened intently at a public forum in April 2019 as PG&E Corporation’s out-going chairman Richard Kelly described the company’s proposed new board. PG&E, which provided electricity and natural gas to millions of Californians, had once been recognized for its vision in foreseeing energy’s potential to reshape the state and power its economy. But PG&E was now in the crosshairs of investors, regulators, and the public for something else entirely: its role in a series of deadly and destructive wildfires that had ravaged the region and precipitated PG&E’s bankruptcy months earlier. Called “the first climate-change bankruptcy,” it was the largest utility bankruptcy in U.S. history. The commissioners at the CPUC, PG&E’s primary regulator, were particularly concerned about PG&E’s governance and had convened the forum to solicit opinions from experts and the public and to hear for themselves what steps the company was taking to improve it. The Commissioners are considering whether to make specific recommendations regarding the board’s composition and functioning, including how the board assesses and compensates PG&E’s CEO. A principal issue is the use of non-financial metrics to evaluate and reward CEO performance.

    Keywords: bankruptcy; board of directors; board dynamics; Business ethics; business model innovation; capital structure; climate change; corporate accountability; corporate boards; corporate governance; energy efficiency; environmental and social sustainability; Executive Compensation; government and business; hedge funds; Institutional investors; leadership; legal aspects of business; management; regulated monopolies; regulation; safety; shareholders; stakeholder management; strategy and execution; utilities; Capital Structure; Climate Change; Corporate Accountability; Corporate Governance; Executive Compensation; Leadership; Management; Safety; Energy Industry; Utilities Industry; California; United States;

    Citation:

    Paine, Lynn S., and Will Hurwitz. "Governing PG&E." Harvard Business School Case 320-024, January 2020.  View Details
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  3. Case | HBS Case Collection | January 2020

    Fossil Fuel Divestment (Abridged)

    Michael W. Toffel and Sarah Gulick

    The President of Harvard University is facing growing pressure from students, alumni, and other climate change activists that are urging the university to divest its multi-billion dollar endowment from fossil fuel companies. The case summarizes the arguments for and against Harvard divesting, examining past examples of Harvard’s investment decisions and the financial implications of divestment.

    Keywords: divestment; Higher Education; Corporate Social Responsibility and Impact; Environmental Sustainability; Climate Change; Public Opinion; Education Industry;

    Citation:

    Toffel, Michael W., and Sarah Gulick. "Fossil Fuel Divestment (Abridged)." Harvard Business School Case 620-093, January 2020.  View Details
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  4. Case | HBS Case Collection | January 2020

    SK Group: Social Progress Credits

    George Serafeim, Ethan Rouen and David Freiberg

    SK Group was one of the largest companies South Korea. A family-run conglomerate consisting of around 120 subsidiaries and employing more than 100,000, SK was tightly knit into the fabric of Korean society. SK viewed their future success as contingent upon the strength of the societal ecosystem in which they operated. As such, the company had a long history of philanthropic giving. However, SK questioned if their donations were producing the desired impact, as many of the societal issues they, and the rest of Korean society, sought to address were not improving. In order to create a new system of generating social value, SK established the Social Progress Credit (SPC) initiative. The SPC initiative designed a measurement methodology that was used to measure the social value created by social enterprises – firms whose mission was to generate social value in conjunction with generating sustainable financial returns. Additionally, the SPC initiative provided monetary incentives to social enterprises in proportion to the social value generated by participating social enterprises. Looking to the future, SK envisioned a marketplace in which SPC’s were traded among investors and credits were priced by the market. Initial results of the SPC initiative were positive, showing positive growth in social value created and financial stability of social enterprises. How then could SK convince other public and private organizations to adopt the SPC model and promote social value? Moreover, how could SK convince mainstream capital markets to make investments into society enterprises on the basis of the social value creation? More importantly, was this attempt to enrich and grow the ecosystem of social value creation making a difference?

    Keywords: Impact; impact investing; impact measurement; social value; social development; conglomerates; measurement of purpose; ESG; ESG (environmental, social, governance) performance; capital markets; cooperation; innovation; Environmental Impact; collaboration; Social Enterprise; Social and Collaborative Networks; Social Issues; Measurement and Metrics; Value Creation; Environmental Sustainability; Employment; Accounting; Energy Industry; Telecommunications Industry; Chemical Industry; South Korea;

    Citation:

    Serafeim, George, Ethan Rouen, and David Freiberg. "SK Group: Social Progress Credits." Harvard Business School Case 120-071, January 2020.  View Details
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  5. Case | HBS Case Collection | January 2020

    Sunset Limited or Full Speed Ahead? Amtrak Talks to Congress

    John D. Macomber

    Richard Anderson took the helm of Amtrak in 2017 after leading a successful turnaround at Delta Airlines. Amtrak is a US state owned enterprise with about $3.5 bn in annual revenue (and a large operating loss) that is responsible for substantial segments of passenger rail travel across the United States. In 2019, Anderson has been called before Congress to explain and justify his capital spending plans for the rail carrier. He has to consider, among other topics: Rural services that are important but lose money; historically important long distance routes liked by Congress and which also lose money; new routes between growing city to city pairs; climate change and the impact of floods, washouts, and extreme heat; and the possibility of Amtrak participating in attractive new Transit-Oriented Development opportunities. Congress will be presented with options ranging from halving the annual subsidy to doubling it; and whether to focus on maintaining the money losing constituent serving routes or focus on the geographies that have the most opportunity to ease road congestion and stimulate economic growth. Amtrak leadership must also evaluate whether to rebuild lines washed out by hurricanes, how to anticipate future natural events that threaten physical infrastructure, and where to build for tnext decades of service. Where should Anderson invest and where should he divest?

    Keywords: railroad; passenger transportation; urbanization; cities; U.S. Congress; Infrastructure; Transition; Transportation; Rail Transportation; Climate Change; Urban Scope; Strategic Planning; Rail Industry; United States;

    Citation:

    Macomber, John D. "Sunset Limited or Full Speed Ahead? Amtrak Talks to Congress." Harvard Business School Case 220-052, January 2020.  View Details
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  6. Book | 2020

    Think Outside the Building: How Advanced Leaders Can Change the World One Smart Innovation at a Time

    Rosabeth Moss Kanter

    Over a decade ago, renowned innovation expert Rosabeth Moss Kanter co-founded and then directed Harvard’s Advanced Leadership Initiative. Her breakthrough work with hundreds of successful professionals and executives, as well as aspiring young entrepreneurs, identifies the leadership paradigm of the future: the ability to “think outside the building” to overcome establishment paralysis and produce significant innovation for a better world.
    Thinking inside the building"—using the authority of position—can work in corporate settings but not when you have to work with, through, or around people with independent power bases and within challenging cultural and political situations. Kanter's insight into advanced leadership is an important and original contribution, one that transcends conventional practice.
    The book illustrates how purpose-driven people united in their conviction that positive change is possible can have real impact on some of today’s biggest problems, from climate change to gun safety to inequality to racial issues. Kanter provides candid narrative accounts of their successes and near stumbles. A former Trader Joe’s executive, for example, navigated across business, government, and community sectors to deal with poor nutrition in inner cities while reducing food waste. A concerned European banker used the power of persuasion, not position, to find novel financing for improving the health of the oceans. A Washington couple enticed global partners to join an Uber-like platform to match skilled refugees with talent-hungry companies. A visionary journalist-turned-entrepreneur closed social divides by giving 50 million social media users access to free local education and culture.

    Keywords: Leaders; advanced leadership; Advanced Leadership Initiative; community; change leadership; innovation; problem solving; cross-sector collaboration; institutional change; Leadership; Change; Leading Change; Communication; Innovation Leadership; Collaborative Innovation and Invention; Organizational Change and Adaptation; Business and Community Relations; Civil Society or Community;

    Citation:

    Kanter, Rosabeth Moss. Think Outside the Building: How Advanced Leaders Can Change the World One Smart Innovation at a Time. New York: PublicAffairs, 2020.  View Details
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  7. Case | HBS Case Collection | December 2019

    Mãe Terra and Unilever (A)

    Lynn S. Paine, Ruth Costas and Priscilla Zogbi

    The case concerns the sale of Mae Terra, one of Brazil's leading brands for packaged organic foods, to the consumer goods giant Unilever in 2017. Working with Unilever management, Mae Terra’s CEO Alexandre Borges must determine whether and how to keep Mae Terra's B Certification, which attests to its commitment to having a positive social and environmental impact, and what internal governance mechanisms will enable MaeTerra to maintain its mission, values, and practices even as it is integrated into a large volume-driven multinational whose governance follows standard listed company principles.

    Keywords: Mergers ＆ Acquisitions; brand management; sustainability; Mergers and Acquisitions; Mission and Purpose; Social Enterprise; Corporate Governance; Governing and Advisory Boards; Environmental Sustainability; Organizational Culture; Food and Beverage Industry; Agriculture and Agribusiness Industry; Brazil; Latin America;

    Citation:

    Paine, Lynn S., Ruth Costas, and Priscilla Zogbi. "Mãe Terra and Unilever (A)." Harvard Business School Case 320-075, December 2019.  View Details
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  8. Case | HBS Case Collection | December 2019

    Forecasting ClimaCell

    Joshua Lev Krieger, Christopher Stanton and James Barnett

    A weather technology startup, ClimaCell considers the R＆D trade-offs and financing implications of pursuing a proposed contract with a major automobile maker, rather than continuing its focus on building a scalable, all-purpose weather prediction engine.

    Keywords: Climate Change; Forecasting and Prediction; Technological Innovation; Research and Development; Finance; Cost vs Benefits; Decision Making; Strategy;

    Citation:

    Krieger, Joshua Lev, Christopher Stanton, and James Barnett. "Forecasting ClimaCell." Harvard Business School Case 820-044, December 2019.  View Details
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  9. Case | HBS Case Collection | November 2019 (Revised December 2019)

    Indigo Agriculture: Harnessing Nature

    Marco Iansiti, Michael W. Toffel and James Barnett

    Indigo Agriculture used a digital-enabled research and development (R&D) process to launch its initial product, microbial coatings for agricultural seeds, which increase crop yields while reducing the need for fertilizers. In doing so, the company developed direct relationships with farmers, in contrast to typical agricultural supply chains that use intermediaries. The company then launched a marketplace platform to link growers directly to crop buyers, again disintermediating the market. Indigo Agriculture is now considering launching an initiative to incentivize farmers to engage in regenerative agricultural practices by setting up a carbon market that could pay them for sequestering carbon into their soils. If scaled globally, the idea could sequester as much as one trillion tons (a teraton) of carbon dioxide from the earth’s atmosphere into agricultural soils, but pursing the idea has many risks.

    Keywords: carbon sequestration; Agribusiness; Technological Innovation; Environmental Sustainability; Supply Chain; Market Platforms; Agriculture and Agribusiness Industry;

    Citation:

    Iansiti, Marco, Michael W. Toffel, and James Barnett. "Indigo Agriculture: Harnessing Nature." Harvard Business School Case 620-024, November 2019. (Revised December 2019.)  View Details
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  10. Case | HBS Case Collection | November 2019 (Revised January 2020)

    Russia: A Drama In Three Acts

    Rawi Abdelal, Rafael Di Tella, Galit Goldstein and Sogomon Tarontsi

    The collapse of central authority in the Soviet Union in 1991 ushered in a period of revolutionary transformations for the states that emerged in its wake. The leaders of Russia, the USSR's successor, struggled to reestablish central authority while also seeking to avoid further disintegration, establish a democratic polity, and institute a market economy across the next several years. Russia would navigate further economic crisis and a swiftly evolving geopolitical order as it returned to the world stage. The case examines the different governance approaches adopted by Presidents Boris Yeltsin, Dmitry Medvedev and Vladimir Putin, and concludes with a discussion of Russia’s strategic challenges and opportunities in 2020. The case focuses on problems of state authority; fiscal capacity; institutionalization of political parties; relations between the federal center and provincial governments; relations between the state and big business; economic policy; international relations; and models of economic development.

    Keywords: Business ＆ government relations; developing countries; government policy; policy change; Policy Making; Economic Systems; Economics; Globalization; Emerging Markets; Privatization; Non-Renewable Energy; Governance; Global Strategy; Corporate Governance; Policy; Business History; Lawfulness; Problems and Challenges; Business and Government Relations; Risk and Uncertainty; Strategy; Change Management; Russia; Moscow;

    Citation:

    Abdelal, Rawi, Rafael Di Tella, Galit Goldstein, and Sogomon Tarontsi. "Russia: A Drama In Three Acts." Harvard Business School Case 720-020, November 2019. (Revised January 2020.)  View Details
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    11.  
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Initiatives & Projects

  • Business & Environment

    The Business and Environment Initiative seeks to deepen business leaders' understanding of today’s environmental challenges and to assist them in developing effective solutions.

  • Social Enterprise

    The Social Enterprise Initiative at HBS applies innovative business practices and managerial disciplines to drive sustained, high-impact social change.

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Faculty

HBS Working Knowledge

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re Ray A. Goldberg
The public is losing trust in many institutions involved in putting food on our table, says Ray A. Goldberg, author of the new book Food Citizenship. Here's what needs to be done.
Pic
re Jose B. Alvarez
Up to 40 percent of food grown in the United States for human consumption is wasted. But solutions are starting to come together from retailers, farmers, academics, policy makers, and social service
Government agencies can be "captured" by the very companies or industries they regulate. Looking at how genetically altered food products are approved, Assistant Professor Shon R. Hiatt finds unexpec

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Harvard Business Publishing

Article
by Michael E. Porter and Mark R. Kramer
Case
by Michael W. Toffel and Sarah Gulick

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