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 | January 2019

    CrossBoundary Energy

    John Macomber

    Almost 500 million people are without electricity in sub-Saharan Africa. Governments and public utilities are challenged to bring generation and distribution to most of them. Considerable promise exists in “off-grid” or “mini-grid” technologies, notably using renewable energy from wind and photovoltaics in areas that have plentiful supplies of both yet limited access to traditional fuels due to other infrastructure constraints. Cross-Boundary is an experienced consulting firm and transaction facilitator run by several Harvard and Stanford MBAs, some with recent military experience.
    In the case, the company needs to analyze and select which of two nations in Africa to enter next (Tanzania or Ghana) based on many aspects of each nation, has to decide which kinds of customers to serve who will compensate it directly for electricity, and whether to partner with developers and contractors or build that capability in-house.
    Critically, the company has to evaluate as it matures whether it should be a) an aggregator of capital from multiple investing and lending sources, investing in a vendor agnostic manner into multiple energy developers and projects which it identifies from afar; or b), whether to be primarily a large scale multi-national competitive energy developer and project delivery company needing to attract capital from many sources, all of whom are selecting between several other developers and investment opportunities. What is their key value added and where can they build a defensible strategy? Which one best accomplishes the goal of matching up money and projects to help illuminate Africa?

    Keywords: renewable energy; energy investing; economic development; Renewable Energy; Business Growth and Maturation; Developing Countries and Economies; Project Finance; Emerging Markets; Industry Structures; Infrastructure; Segmentation; Private Equity; Decision Choices and Conditions; Energy Industry; Utilities Industry; Africa; Tanzania; Ghana;

    Citation:

    Macomber, John. "CrossBoundary Energy." Harvard Business School Case 219-089, January 2019.  View Details
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  2. Working Paper | HBS Working Paper Series | 2019

    Understanding and Overcoming Roadblocks to Environmental Sustainability. Past Roads and Future Prospects

    Ann-Kristin Bergquist, Shawn A. Cole, John Ehrenfeld, Andrew A. King and Auden Schendler

    This working paper examines key barriers to business sustainability discussed at a multidisciplinary conference held at the Harvard Business School in 2018. Drawing on perspectives from both the historical and business literatures, speakers debated the historical success and future opportunities for voluntary business actions to advance sustainability. Roadblocks include misaligned incentives, missing institutions, inertia of economic systems, and the concept of sustainability itself. It appears that overcoming these roadblocks will require systematic interventions and alternative normative concepts.

    Keywords: Environmental Sustainability; Problems and Challenges; History; Governing Rules, Regulations, and Reforms; Opportunities;

    Citation:

    Bergquist, Ann-Kristin, Shawn A. Cole, John Ehrenfeld, Andrew A. King, and Auden Schendler. "Understanding and Overcoming Roadblocks to Environmental Sustainability. Past Roads and Future Prospects." Harvard Business School Working Paper, No. 19-067, January 2019.  View Details
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  3. Working Paper | HBS Working Paper Series | 2018

    Corporate Sustainability: A Strategy?

    Ioannis Ioannou and George Serafeim

    We explore the extent of adoption of sustainability practices over time and the implications for firm performance. We find that for almost all industries, sustainability practices converge within an industry over time, implying that they spread as common practices. We also find that the extent of convergence across industries is associated with the adoption of sustainability by the industry’s market leaders and the relative importance of environmental and social issues compared to governance issues. Further, we distinguish between a set of sustainability practices on which companies converge within an industry, which we term “common practices,” and a set on which they do not, which we term “strategic.” We subsequently explore performance implications and find that the adoption of strategic sustainability practices is significantly and positively associated with both return on capital and expectations of future performance as reflected in price to book valuation multiples, whereas the adoption of common sustainability practices is reliably correlated only with expectations of future performance. Overall, we provide evidence about the role of sustainability as a long-term corporate strategy and as a common practice.

    Keywords: sustainability; Corporate performance; industry analysis; Corporate Social Responsibility and Impact; Environmental Sustainability; Strategy; Performance; Corporate Strategy;

    Citation:

    Ioannou, Ioannis, and George Serafeim. "Corporate Sustainability: A Strategy?" Harvard Business School Working Paper, No. 19-065, January 2019.  View Details
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  4. Case | HBS Case Collection | December 2018

    Bord Bia: Strategically Growing Irish Exports

    Jose B. Alvarez, Forest L. Reinhardt and Emer Moloney

    Agriculture was Ireland’s largest indigenous industry. Its agri-food sector was export-driven, with almost 90% of production exported. Bord Bia was the Irish government agency charged with the promotion, trade development and marketing of the Irish food, drink and horticulture industry. Bord Bia's CEO, Tara McCarthy, was shaping the government agency's new strategy amid a volatile socio-political environment (with Brexit and other cross-border trade issues) and in light of consumer trends in the macro food and drink industry.

    Keywords: Agribusiness; Trends; Disruption; Communication Strategy; Experience and Expertise; Talent and Talent Management; Public Sector; Trade; Education; Food; Geography; Geographic Location; Rural Scope; Corporate Governance; Government Administration; Information; Knowledge Dissemination; Marketing Channels; Brands and Branding; Marketing Communications; Marketing Strategy; Planning; Business and Government Relations; Environmental Sustainability; Public Opinion; Business Strategy; Diversification; Agriculture and Agribusiness Industry; Food and Beverage Industry; Public Administration Industry; Retail Industry; Republic of Ireland; United Kingdom; Europe;

    Citation:

    Alvarez, Jose B., Forest L. Reinhardt, and Emer Moloney. "Bord Bia: Strategically Growing Irish Exports." Harvard Business School Case 519-043, December 2018.  View Details
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  5. Case | HBS Case Collection | December 2018

    Good Energy Group PLC

    John R. Wells and Benjamin Weinstock

    Founded at the end of 1999 by Juliet Davenport and Martin Edwards, Good Energy was the number-two renewable-energy seller in the United Kingdom at the end of 2016, supplying over 71,000 of the country’s 27 million households and small businesses with 100% renewable electricity and over 44,000 with gas. It also provided administrative support for over 133,000 mostly domestic solar generators selling surplus energy to the grid. Its wind and solar farms generated enough electricity for 20,000 homes. Revenues of £90 million had grown at an average of 33% over the previous five years, while operating profits of £6.0 million had grown at 27%.
    However, all was not good at Good Energy. A commitment in 2015 to grow to 900,000 customers by 2020 was revised in 2016 to a target of “sustainable profit growth and enhanced customer service.” Moreover, the long-term goal of generating 50% of energy sold was abandoned in favor of sourcing more from third parties. Part of the challenge appeared to be the entry of many new renewable-energy suppliers that offered tariffs 20% to 30% below Good Energy’s tariffs. But CEO Juliet Davenport faced other challenges. A hostile government was threatening to cap energy rates and reduce renewable subsidies. Meanwhile, Dale Vince, the CEO of Ecotricity, the number-one green-energy supplier in the United Kingdom and Good Energy’s biggest shareholder, was trying to claim two seats on the board. How was Davenport going to navigate through these challenges and maintain Good Energy’s success?

    Keywords: Power/Energy; green energy; renewables; wind power; Electricity; Power; strategy development; electric vehicles; customer service; energy policy; Barriers to entry; Renewable Energy; Growth and Development Strategy; Competitive Strategy; Business and Government Relations; Problems and Challenges; Strategy; Energy Industry; United Kingdom;

    Citation:

    Wells, John R., and Benjamin Weinstock. "Good Energy Group PLC." Harvard Business School Case 719-439, December 2018.  View Details
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  6. Case | HBS Case Collection | December 2018

    First Utility Ltd.

    John R. Wells and Benjamin Weinstock

    At the end of 2017 First Utility Ltd. was the largest of the middle-tier domestic energy suppliers in the United Kingdom, serving 808,000 of the country’s 27 million households with electricity and gas. In Q1 2017 First Utility captured 3% market share. The company had grown rapidly from 2011 to 2014, doubling in size each year, and CEO Ian McCaig had signaled that he was considering an IPO. However, in 2015 growth slowed, and profits fell by 84%. The same year, the company began expanding into Germany and Poland and building its own billing system. Growth slowed further in early 2016, and First Utility recorded a loss of £12.7 million for the year. Plans for an IPO were shelved. Instead, the company began looking for strategic partnerships to offer new products and services to its UK customer base. Whether First Utility’s new geographies and product lines would revive growth was unclear. Meanwhile, in May 2017, CEO McCaig announced that he would step down in September. In December 2017, the company announced that Royal Dutch Shell would acquire First Utility for an undisclosed sum. The deal was approved in February 2018, and First Utility was rolled into Shell’s New Energies division.

    Keywords: rapid growth stage; Power/Energy; energy efficiency standards; Energy; Competition; Diversification; Acquisition; Expansion; Growth Management; Energy Industry; United Kingdom;

    Citation:

    Wells, John R., and Benjamin Weinstock. "First Utility Ltd." Harvard Business School Case 719-425, December 2018.  View Details
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  7. Case | HBS Case Collection | December 2018

    Bulb (A): Foundation

    John R. Wells and Benjamin Weinstock

    This is the first case in a three-case series on Bulb Energy Ltd. It is followed by “Bulb (B): Launch” (719-441) and “Bulb (C): Rapid Growth” (719-442). It describes the foundation of Bulb, a renewable energy supplier entering the highly competitive UK market in August 2015. Founders Hayden Wood and Amit Gudka were hoping to capitalize on the hundreds of thousands of customers switching their energy provider each month, by promising excellent customer service, a simple, low-price tariff, 100%-renewable electricity, and services to reduce energy consumption. At the time there were only about 250,000 households on renewable tariffs, typically paying a high price for the privilege. Gudka and Wood were convinced that many more households would opt for renewable energy and turn it into a mainstream product if prices were more reasonable. Their goal was to sign up more than 23,000 properties by March 31, 2017 to reach breakeven, and then grow to more than 69,000 properties by March 31, 2021. On Friday August 21, 2015, Gudka and Wood sent out a batch of 1,400 emails to friends and family, encouraging them to switch to Bulb. They waited anxiously for the first sign-ups.

    Keywords: green energy; start-up; launch; customer acquisition; customer churn; Customer Engagement; Electricity; resources; growth strategy; B-Corp; Renewable Energy; Business Startups; Business Plan; Business Model; Working Capital; Customers; Growth Management; United Kingdom;

    Citation:

    Wells, John R., and Benjamin Weinstock. "Bulb (A): Foundation." Harvard Business School Case 719-440, December 2018.  View Details
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  9. Working Paper | HBS Working Paper Series | 2018

    Southern Responses to Gold Certification: Cooperate, Compete, Reject, Revise

    Kristin Sippl

    Southern responses to Northern-led certification programs are understandable and largely predictable if the ideas, interests, and power of key actors are accurately assessed. When alignment and power are high, Northern programs will likely succeed. When they are low, they will likely fail. When they are at medium levels, Southern actors will likely launch competing programs and producer participation might be low but will likely skew South. This paper presents a case study of Southern responses to Northern certification of artisanal and small-scale gold mining (ASGM), which are emblematic of the latter, medium-level state. It details four key Southern responses: cooperation, competition, low uptake levels, and program revision via supplementation. The Southern-led Alliance for Responsible Mining first cooperated with Fairtrade International, then built enough capacity to compete with it. Miners’ and programs’ interests aligned on income and deforestation, but diverged on chemicals and legality, leading to low uptake. The Alliance responded by launching a second sustainability standard called the CRAFT Code in 2018. Whereas certification rewards the use of best mining practices, the CRAFT Code rewards avoidance of the worst. By focusing on conflict and relaxing their stance on legality, mercury use, price floors, and the use of third-party audits, the Alliance created a program that aligns with the majority of actors’ interests and is likely to experience broad uptake but limited effects.

    Keywords: gold; mining; Environmental Sustainability; Standards; Programs; Governance Compliance; Competition; Adaptation; Mining Industry;

    Citation:

    Sippl, Kristin. "Southern Responses to Gold Certification: Cooperate, Compete, Reject, Revise." Harvard Business School Working Paper, No. 19-055, November 2018. (Under review.)  View Details
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  10. Case | HBS Case Collection | October 2018 (Revised January 2019)

    Rio Tinto vs. the Securities and Exchange Commission

    Aiyesha Dey, Krishna Palepu and Sarah Gulick

    Keywords: coal mining; SEC enforcement; FCPA; mining; fraud; acquisition; Financial Reporting; Mergers and Acquisitions; Non-Renewable Energy; Ethics; Financial Management; Investment; Corporate Governance; Laws and Statutes; Lawsuits and Litigation; Risk Management; Risk and Uncertainty; Energy Industry; Mining Industry; Financial Services Industry; Mozambique; United States; Australia; England;

    Citation:

    Dey, Aiyesha, Krishna Palepu, and Sarah Gulick. "Rio Tinto vs. the Securities and Exchange Commission." Harvard Business School Case 119-046, October 2018. (Revised January 2019.)  View Details
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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

Pic
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 Julie Battilana and Carin-Isabel Knoop

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