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Business & Environment

Business & Environment

    • July 2015
    • Article

    BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

    By: 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.

    • July 2015
    • Article

    BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

    By: 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...

    • Article

    Integrated Reporting and Investor Clientele

    By: George Serafeim

    In this paper, I examine the relation between Integrated Reporting (IR) and the composition of a firm's investor base. I hypothesize and find that firms that practice IR have a more long-term oriented investor base with more dedicated and fewer transient investors. This result is more pronounced for firms with high growth opportunities, not controlled by a family, operating in 'sin' industries, and exhibiting commitment to IR. I find that the results are robust to the inclusion of firm fixed effects, controls for the quantity of sustainability disclosure, and alternative ways of measuring IR. Moreover, I show that investor activism on environmental or social issues or a large number of concerns about a firm's environmental or social impact leads a firm to practice more IR and that this investor or crisis-induced IR affects the composition of a firm's investor base. Finally, firms that report more information about the different forms of capital or follow more closely the guiding principles as described in the IR Framework of the IIRC exhibit a more long-term oriented investor base.

    • Article

    Integrated Reporting and Investor Clientele

    By: George Serafeim

    In this paper, I examine the relation between Integrated Reporting (IR) and the composition of a firm's investor base. I hypothesize and find that firms that practice IR have a more long-term oriented investor base with more dedicated and fewer transient investors. This result is more pronounced for firms with high growth opportunities, not...

    • April 14, 2015
    • Article

    The Type of Socially Responsible Investments That Make Firms More Profitable

    By: George Serafeim

    • April 14, 2015
    • Article

    The Type of Socially Responsible Investments That Make Firms More Profitable

    By: George Serafeim

    • Article

    Transition to Clean Technology

    By: Daron Acemoglu, Ufuk Akcigit, Douglas Hanley and William R. Kerr

    We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation, in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.

    • Article

    Transition to Clean Technology

    By: Daron Acemoglu, Ufuk Akcigit, Douglas Hanley and William R. Kerr

    We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation, in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean...

    • 2015
    • Book

    Leading Sustainable Change: An Organizational Perspective

    By: Rebecca Henderson, Ranjay Gulati and Michael Tushman

    The business case for acting sustainably is becoming increasingly compelling—reducing our global footprint to sustainable levels is the defining issue of our times, and it is one that can only be addressed with the active participation of the private sector. However, persuading well-established organizations to act in new ways is never easy. This book is designed to support business leaders and organizational scholars who are grappling with this challenge by pulling together leading-edge insights from some of the world's best researchers as to how organizational change in general—and sustainable change in particular—can be most effectively managed. The book begins by laying out the economic case for change, while subsequent chapters describe how leaders at firms such as Du Pont, IBM, and Cemex have transformed their organizations, exploring issues such as the role of the senior team and the ways in which firms shift their identities, build innovative cultures and processes, and begin to change the world around them. Business leaders will find the book a source of both powerful examples and immediately actionable ideas, while scholars will be deeply intrigued by the insights that emerge from the cross cutting exploration of one of the toughest challenges our society has ever faced.

    • 2015
    • Book

    Leading Sustainable Change: An Organizational Perspective

    By: Rebecca Henderson, Ranjay Gulati and Michael Tushman

    The business case for acting sustainably is becoming increasingly compelling—reducing our global footprint to sustainable levels is the defining issue of our times, and it is one that can only be addressed with the active participation of the private sector. However, persuading well-established organizations to act in new ways is never easy. This...

    • September 2014 (Revised November 2017)
    • Case

    Sustainability at IKEA Group

    By: V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain and Jerome Lenhardt

    By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the lifestyle of its end consumers. The plan especially centered on wood, which represented 60% of IKEA Group's total procurement in volume and constituted a key lever for the company to increase its positive impact on sustainability. IKEA Group Management therefore had to decide how to manage its portfolio of wood sustainability initiatives, especially in the context of the company's aggressive growth plan.

    • September 2014 (Revised November 2017)
    • Case

    Sustainability at IKEA Group

    By: V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain and Jerome Lenhardt

    By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the...

Initiatives & Projects

The Business & Environment Initiative and the Social Enterprise Initiative deepen business leaders’ understanding of today’s environmental challenges and assist them in developing effective solutions.
Business & Environment
Social Enterprise

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.

Initiatives & Projects

The Business & Environment Initiative and the Social Enterprise Initiative deepen business leaders’ understanding of today’s environmental challenges and assist them in developing effective solutions.

Business & Environment
Social Enterprise

Recent Publications

Decarbonizing Health Care: Engaging Leaders in Change

By: Vivian S. Lee, Kathy Gerwig, Emily Hough, Kedar Mate, Robert Biggio and Robert S. Kaplan
  • May 2023 |
  • Article |
  • NEJM Catalyst Innovations in Care Delivery
Health care leaders are often surprised to learn that their operations contribute significantly to a warming climate. In addition to their roles as responders to and victims of extreme weather events, health care organizations have an obligation to reduce their substantial greenhouse gas emissions as part of their overall mission to do no harm and to improve health. Representing close to one fifth of the U.S. gross domestic product, the health care sector can use its purchasing power to drive the transition to clean energy and a low-carbon supply chain for the rest of the nation. Moreover, much of the shift in focus to preventive models of care and safer, higher-quality care that reduces unnecessary utilization will naturally produce lower carbon footprints. With the Inflation Reduction Act of 2022, nonprofit organizations can now use the new tax credit provisions for renewable energy to support desired investments in buildings, energy infrastructure, and transportation, among others. Health care organizations and their global value chains can be influential and important catalysts for the journey to a net-zero carbon future. Here, the authors share recommendations for how leaders can build climate-smart strategies that take advantage of tax incentives and drive changes that can both energize their employees and build a more resilient system to care for their communities.
Keywords: Health Care; Decarbonization; Carbon Emissions; Net-zero Emissions; Climate Change; Health Care and Treatment; Health Industry
Citation
Read Now
Related
Lee, Vivian S., Kathy Gerwig, Emily Hough, Kedar Mate, Robert Biggio, and Robert S. Kaplan. "Decarbonizing Health Care: Engaging Leaders in Change." NEJM Catalyst Innovations in Care Delivery 4, no. 5 (May 2023).

Apple's iPhone Revolution: Pioneering the Circular Economy

By: George Serafeim
  • April 2023 |
  • Case |
  • Faculty Research
When asked to identify an example of a circular economy business model that has generated billions in revenues for a company, ChatGPT, the famous chatbot that in 2022 rocked the world with its ability to perform a variety of tasks, immediately identified and highlighted Apple’s iPhone trade-in program. The trade-in program encouraged customers to trade in their old devices, which were then refurbished and resold, or recycled for valuable components. With about 80% of the second-hard smartphone market comprised of iPhone and an increasing percentage of materials being recycled and reused in manufacturing, Apple was making progress towards circularity.
Keywords: Iphone; Smartphone; Waste Management; Recycling; Innovation; Product Upgrade; Product Life Cycle; Sustainability; Climate Impact; Digital; Business Model Innovation; Climate Change; Information Technology; Business Model; Electronics Industry; Information Technology Industry
Citation
Educators
Related
Serafeim, George. "Apple's iPhone Revolution: Pioneering the Circular Economy." Harvard Business School Case 123-089, April 2023.

Strive Asset Management

By: Suraj Srinivasan, Lynn S. Paine and Aldo Sesia
  • April 2023 |
  • Case |
  • Faculty Research
Strive Asset Management, which launched in 2022, was actively targeting several leading U.S. companies in the upcoming 2023 proxy voting season to stop acquiescing to those large asset managers and other institutional shareholders who were pressing those companies to take actions with regards to their environmental and societal concerns. Strive believed that responding to these demands was a distraction and did not increase shareholder value. The case describes the environment, social, and governance (ESG) movement, including the increasing role of shareholder resolutions to address ESG concerns, and the role large asset managers (BlackRock Inc., State Street Global Advisors, and Vanguard Group) were playing in driving ESG agendas.
Keywords: ESG; Shareholder Activism; Asset Management; Investment Funds; Corporate Governance; Risk Management; Climate Change; Diversity; Equity; Financial Services Industry; United States
Citation
Educators
Related
Srinivasan, Suraj, Lynn S. Paine, and Aldo Sesia. "Strive Asset Management." Harvard Business School Case 123-088, April 2023.

Getting a Clearer View of Your Company’s Carbon Footprint

By: Robert S. Kaplan, Karthik Ramanna and Stefan Reichelstein
  • April 3, 2023 |
  • Article |
  • Harvard Business Review Digital Articles
E-liability accounting is a new technique that will help customers factor in a product’s environmental footprint into their purchasing decisions and will help create a competition dynamic that leads to reduced carbon outputs. This article describes two pilot studies—by an Asian tire manufacturer and a German cement producer—that illustrate how the E-liability approach can do that.
Keywords: Environmental Sustainability; Environmental Accounting; Supply Chain; Consumer Behavior
Citation
Register to Read
Related
Kaplan, Robert S., Karthik Ramanna, and Stefan Reichelstein. "Getting a Clearer View of Your Company’s Carbon Footprint." Harvard Business Review Digital Articles (April 3, 2023).

Christiana Figueres and the Collaborative Approach to Negotiating Climate Action

By: James K. Sebenius, Laurence A. Green, Hannah Riley-Bowles, Lara SanPietro and Mina Subramanian
  • 2023 |
  • Case |
  • Faculty Research
This case study centers on Harvard’s Program on Negotiation 2022 Great Negotiator, Christiana Figueres, and her efforts as Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) to build momentum for, and ultimately pass, the 2015 Paris Climate Agreement.

As UNFCCC Executive Secretary, Christiana Figueres was tasked with a seemingly insurmountable challenge of putting together an impactful, global climate agreement. Coming out of the dramatic failure of the Copenhagen summit five years before, many believed that such an agreement was not possible. However, with persistent optimism and careful, targeted interventions aimed at building momentum, in 2015 the Paris Agreement was adopted by the 196 participating nations and set forth a new global consensus framework for international climate action.

Figueres had to personally undergo a transformation to let go of her identity as a Costa Rican diplomat so she could approach the negotiations from a global perspective and meet each participating nation from their perspective. The negotiation process itself was not just the two-week conference in Paris but instead was a years-long series of actions “away from the table" taken by Figueres and others to help enhance the probability of a successful outcome at the negotiating table. These actions included coalition building discussions with private industry and civil society groups, like-minded nations, in which small teams of strategic influencers worked with partners behind the scenes to build support for an ambitious outcome. By bringing different coalitions of countries and non-state actors together to lead the way, a more expansive agreement became possible.
Keywords: Climate Change; Negotiation; Environmental Regulation; International Relations; Leadership
Citation
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Related
Sebenius, James K., Laurence A. Green, Hannah Riley-Bowles, Lara SanPietro, and Mina Subramanian. "Christiana Figueres and the Collaborative Approach to Negotiating Climate Action." Program on Negotiation at Harvard Law School Case, 2023. Electronic.

On

By: Ramon Casadesus-Masanell, Karolin Frankenberger and Sascha Mader
  • March 2023 |
  • Case |
  • Faculty Research
Founded in 2010, in just one decade, the Swiss company On had established itself as a main player in global sports footwear and apparel. Based on an unconventional strategy which one of the founders labeled as “obsessively distinct,” On grew its sales with a compound annual growth rate of more than 75% between 2013 and 2021, and went public in 2021. In 2022, On was on the verge of launching a revolutionary new subscription-based service that exclusively provided customers with the Cloudneo, a fully recyclable performance running shoe. Designed as a circular business model, Cyclon would deviate from On's proven growth strategy and would contradict the dominant logic of how running shoes were consumed. On had to decide whether or not to implement the subscription-based business model as envisioned.
Keywords: Growth and Development Strategy; Environmental Sustainability; Product Positioning; Business Model; Apparel and Accessories Industry; Consumer Products Industry; Europe
Citation
Educators
Purchase
Related
Casadesus-Masanell, Ramon, Karolin Frankenberger, and Sascha Mader. "On." Harvard Business School Case 723-430, March 2023.

Doing Business in Helsinki, Finland

By: Martin A. Sinozich, Lena Duchene, Tonia Labruyere and Daniela Beyersdorfer
  • February 2023 |
  • Case |
  • Faculty Research
This case examines the challenges and opportunities of doing business in Finland. It highlights Finland's economic transformation in the decades leading up to 2023 in the context of its history, culture, and politics. The case gives an overview of some of the main obstacles faced by businesses operating in the country, such as labor shortages, inflexibility in employment regulations, Russia’s war in Ukraine, and slowing growth, contrasting these with the efforts undertaken by the government to improve the country's business climate. This is illustrated through the discussion of a business dilemma in which the confectionary company Fazer needs to manage its exit from the Russian market while continuing its sustainability efforts in a changing industry environment.
Keywords: Business History; Business and Government Relations; Corporate Strategy; Research and Development; Foreign Direct Investment; Crisis Management; Culture; Environmental Sustainability; International Relations; Food and Beverage Industry; Finland; Europe
Citation
Educators
Related
Sinozich, Martin A., Lena Duchene, Tonia Labruyere, and Daniela Beyersdorfer. "Doing Business in Helsinki, Finland." Harvard Business School Case 323-079, February 2023.

Accounting for Carbon Offsets – Establishing the Foundation for Carbon-Trading Markets

By: Robert S. Kaplan, Karthik Ramanna and Marc Roston
  • 2023 |
  • Working Paper |
  • Faculty Research
Tackling climate change requires reductions in current and future greenhouse gas (GHG) emissions as well as the removal of existing GHG from the atmosphere. Carbon-offset producers purport to provide such removals. But poor measurement practices and inadequate controls have led to extensive trading of instruments that do not materially reduce the supply of atmospheric GHG. To address these challenges, we apply basic financial-accounting principles to develop an accurate and auditable set of offset accounting principles. These principles complement and extend the E-liability method of accounting for GHG emissions. Having rigorous accounting for both emissions and offsets will expand market forces for impactful decarbonization.
Keywords: Carbon Offsetting; Climate Change; Environmental Regulation; Corporate Accountability
Citation
Read Now
Related
Kaplan, Robert S., Karthik Ramanna, and Marc Roston. "Accounting for Carbon Offsets – Establishing the Foundation for Carbon-Trading Markets." Harvard Business School Working Paper, No. 23-050, February 2023.

Natura: Weathering the Pandemic at Brazil's Cosmetic Giant

By: Brian Trelstad, Pedro Levindo and Carla Larangeira
  • January 2023 |
  • Case |
  • Faculty Research
Brazil's Natura, a multi-brand cosmetics group, has taken several measures to safeguard the livelihoods of its thousands of employees and millions of sales representatives during the COVID-19 health and economic crisis. The company has also made strides in its efforts to increase digital sales. Now the purpose-driven group must decide whether to vocalize its opposition to private companies buying COVID-19 vaccines to inoculate their employees before priority groups in Brazil's public health system.
Keywords: COVID-19 Pandemic; ESG Reporting; Acquisition; Customer Focus and Relationships; Decision Making; Social Entrepreneurship; Environmental Sustainability; Environmental Management; Climate Change; Ethics; Moral Sensibility; Values and Beliefs; Global Strategy; Corporate Governance; Health Pandemics; Human Resources; Human Capital; Crisis Management; Growth and Development Strategy; Marketing; Distribution Channels; Supply Chain; Corporate Social Responsibility and Impact; Mission and Purpose; Organizational Culture; Customer Ownership; Relationships; Business and Community Relations; Business and Stakeholder Relations; Networks; Partners and Partnerships; Science-Based Business; Reputation; Human Needs; Social Issues; Strategy; Equality and Inequality; Beauty and Cosmetics Industry; Brazil; Latin America
Citation
Educators
Related
Trelstad, Brian, Pedro Levindo, and Carla Larangeira. "Natura: Weathering the Pandemic at Brazil's Cosmetic Giant." Harvard Business School Case 323-065, January 2023.

Elon Musk at Tesla

By: George Serafeim and Amram Migdal
  • January 2023 (Revised May 2023) |
  • Case |
  • Faculty Research
This case gives an overview of Elon Musk’s career arc through the lens of the 2003 founding of Tesla and its growth through 2022. Background information is included on Tesla’s unique strategic decisions, its operational and reputational struggles and successes, and the broader evolution of the electric vehicle market, emissions regulations, and green technology developments. The case also contains information on Musk’s early life and endeavors beyond Tesla, with a focus on his management style and the implications for Tesla’s success and his aim to influence human civilization for the better.
Keywords: Business Ventures; Decision Making; Design; Energy; Renewable Energy; Engineering; Entrepreneurship; Environmental Management; Climate Change; Environmental Sustainability; Green Technology; Values and Beliefs; Governance; Innovation and Invention; Innovation Leadership; Innovation Strategy; Leadership; Leadership Style; Management; Goals and Objectives; Organizations; Mission and Purpose; Society; Social Issues; Strategy; Transportation; Value; Auto Industry; Transportation Industry
Citation
Educators
Related
Serafeim, George, and Amram Migdal. "Elon Musk at Tesla." Harvard Business School Case 123-044, January 2023. (Revised May 2023.)
More Publications

Faculty

George Serafeim
Michael W. Toffel
Forest L. Reinhardt
Richard H.K. Vietor
Joseph B. Lassiter
Rebecca M. Henderson
Max H. Bazerman
David E. Bell
James K. Sebenius
Lynn S. Paine
Geoffrey G. Jones
Ray A. Goldberg
→See All

HBS Working Knowlege

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    Re: Ray A. Goldberg
    • 17 Oct 2016

    Business Solutions That Help Cut Food Waste

    Re: Jose B. Alvarez
    • 09 Apr 2012

    Who Sways the USDA on GMO Approvals?

    by Michael Blanding
→More Articles

Harvard Business Publishing

    • September–October 2022
    • Article

    The Essential Link Between ESG Targets and Financial Performance

    By: Mark R. Kramer and Marc W. Pfitzer
    • March 2023
    • Case

    On

    By: Ramon Casadesus-Masanell, Karolin Frankenberger and Sascha Mader
→More Harvard Business Publishing
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