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 | May 2019

    Elon Musk's Big Bets Update, 2019

    David B. Yoffie and Daniel Fisher

    This short case provides an update to Elon Musk's strategy and tactical moves with Tesla, Solar City, and SpaceX from 2016-2019.

    Keywords: electric vehicles; batteries; solar power; Execution; space flight; Tesla; SolarCity; SpaceX; Elon Musk; Technology; Risk and Uncertainty; Expansion; Renewable Energy; Strategy; Investment; Manufacturing Industry; Green Technology Industry; Auto Industry; Aerospace Industry; Battery Industry;

    Citation:

    Yoffie, David B., and Daniel Fisher. "Elon Musk's Big Bets Update, 2019." Harvard Business School Case 719-512, May 2019.  View Details
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  2. Case | HBS Case Collection | May 2019

    Rio Tinto: Decommoditizing Aluminum

    David Fubini and Jonathon McCarthy

    Rio Tinto, a global mining company, sought to decommoditize its aluminum products by differentiating some production lines as a lower-carbon branded product. In order to create a market for this product, Rio Tinto needed the support of the global aluminum industry. Together, major aluminum companies could create a coherent messaging effort that emphasized the industry’s new environmental efforts, without reminding buyers about the environmental concerns about traditional mining. The case asks how Rio Tinto could best position their lower-carbon aluminum, and asks if the investment to differentiate a new environmentally friendly product is worth the cost and risk.

    Keywords: mining; commodity prices; carbon regulation; aluminum; Rio Tinto; Apple; environmental and social sustainability; ESG; sustainability; Product Positioning; Mission and Purpose; Environmental Sustainability; Business Strategy; Metals and Minerals; Mining Industry; Australia; Canada;

    Citation:

    Fubini, David, and Jonathon McCarthy. "Rio Tinto: Decommoditizing Aluminum." Harvard Business School Case 419-044, May 2019.  View Details
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  3. Working Paper | HBS Working Paper Series | 2019

    How Transparency into Internal and External Responsibility Initiatives Influences Consumer Choice: Evidence from the Field and Lab

    Ryan W. Buell and Basak Kalkanci

    Amid growing calls for transparency and social and environmental responsibility, companies are employing different strategies to improve consumer perceptions of their brands. Some pursue internal initiatives that reduce their negative social or environmental impacts through responsible operations practices (such as paying a living wage to workers or engaging in environmentally sustainable manufacturing). Others pursue external responsibility initiatives (such as philanthropy or cause-related marketing). Through three experiments, conducted in the field and lab, we compare how transparency into these internal and external initiatives affects customer perceptions and sales, and explore the psychological processes linking transparency to sales. The results provide converging evidence that transparency into a company’s internal responsibility practices can be at least as motivating of consumer sales as transparency into its external responsibility initiatives, incrementally increasing a consumer’s probability of purchase by 13.6% and 45.8% across our two field experiments, conducted in social and environmental domains, respectively. We further investigate the perceptual effects of transparency into internal and external responsibility initiatives and find that the underlying psychological mechanisms linking both types of transparency to consumer purchase intentions are highly consistent. Transparency into internal and external initiatives increases perceived altruism, cause sincerity, corporate ability, trust, favorability, and consumers’ beliefs that the company is an attractive employer, which in turn drives sales. Taken together, our results suggest that it may be in the interest of both business and society for managers to prioritize internal responsible operations initiatives, to achieve both top and bottom line benefits, while mitigating social and environmental harms.

    Keywords: Sustainable Operations; corporate social responsibility; operational transparency; Corporate Social Responsibility and Impact; Environmental Sustainability; Consumer Behavior; Perception;

    Citation:

    Buell, Ryan W., and Basak Kalkanci. "How Transparency into Internal and External Responsibility Initiatives Influences Consumer Choice: Evidence from the Field and Lab." Harvard Business School Working Paper, No. 19-115, May 2019.  View Details
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  4. Case | HBS Case Collection | March 2019

    The Sustainability Accounting Standards Board (Abridged)

    Julie Battilana and Michael Norris

    In 2014, as the Sustainability Accounting Standards Board (SASB) has just brought former New York City Mayor Michael Bloomberg on as chairman of the board, Jean Rogers, founder and CEO, struggles with how best to ensure the nonprofit’s financial sustainability while pushing for broad acceptance of its nonfinancial accounting metrics.

    Keywords: sustainability; sustainability reporting; reporting; Environmental Sustainability; Accounting; Accounting Industry; United States;

    Citation:

    Battilana, Julie, and Michael Norris. "The Sustainability Accounting Standards Board (Abridged)." Harvard Business School Case 419-058, March 2019.  View Details
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  5. Case | HBS Case Collection | March 2019

    The DivaCup: Navigating Distribution and Growth

    Ayelet Israeli

    When the mother-daughter founders of DivaCup set out with a mission to disrupt the menstrual care industry with an innovative product form, they initially struggled to gain legitimacy and convince retailers to carry their unique product. Fifteen years later, the product was available online and in more than 35,000 retail stores worldwide, and the company was struggling with omnichannel distribution challenges and frequent violations of their pricing policy due to intense competition among channel partners. International distribution and the prevalence of gray market sellers were causing large price dispersions across markets, which was harming the brand further. In October 2018, the entry of a formidable competitor, P&G (owner of menstrual care brands Tampax and Always), into the niche product segment causes the CEO and her team to consider the best plan to reposition and differentiate its product to broaden its appeal to users of other product forms, while maintaining its market leadership in the menstrual cup segment. This challenge is made more difficult due to prevalent miseducation about menstrual care and menstrual cups in particular.

    Keywords: female; female ceo; Female Entrepreneur; female protagonist; health ＆ wellness; healthcare; price policies; minimum advertised price; differentiation; positioning; Growth; Health; Health Care and Treatment; Price; Disruption; Distribution; Distribution Channels; Competitive Strategy; Competition; Growth Management; Mission and Purpose; Product Development; Product Marketing; Product Launch; Product Positioning; Advertising; Business Startups; Internet; Entrepreneurship; Social Entrepreneurship; Social Issues; Social Enterprise; Retail Industry; Medical Devices and Supplies Industry; Manufacturing Industry; Health Industry; Green Technology Industry; Education Industry; Distribution Industry; Consumer Products Industry; Canada; United States; United Kingdom;

    Citation:

    Israeli, Ayelet. "The DivaCup: Navigating Distribution and Growth." Harvard Business School Case 519-055, March 2019.  View Details
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  7. Editorial | Harvard Business Review (website) | 2019

    Yes, Sustainability Can Be a Strategy

    Ioannis Ioannou and George Serafeim

    Keywords: sustainability; Sustainability Management; sustainability standards; strategy; Business Strategy; competitive advantage; Corporate performance; CSR; environmental sustainability;

    Citation:

    Ioannou, Ioannis, and George Serafeim. "Yes, Sustainability Can Be a Strategy." Harvard Business Review (website) (February 11, 2019).  View Details
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  8. 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: 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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  9. Case | HBS Case Collection | January 2019 (Revised March 2019)

    Should a Pension Fund Try to Change the World? Inside GPIF's Embrace of ESG

    Rebecca Henderson, George Serafeim, Josh Lerner and Naoko Jinjo

    In the fall of 2018, Hiro Mizuno, the Chief Investment Officer (CIO) of GPIF, the Japanese Government Pension Fund, was reflecting on his efforts to integrate Environmental, Social and Governance (ESG) issues into every aspect of GPIF’s portfolio. His efforts ranged from constructing new stock market indices based on ESG data, changing the compensation and incentives of active investment managers and passive funds, pushing for more corporate sustainability reporting and integrated reporting, and establishing collaborations with other asset owners to drive systems level change. He was convinced that the only way to meet his responsibilities to his beneficiaries was to improve the performance of the entire economy through a focus on improving corporate governance, increasing inclusion in the workplace and gender diversity and reducing environmental damage and progress towards tackling climate change. The early results from his efforts were promising, but was there more he could do?

    Keywords: pension funds; ＂ESG (environmental, social, governance) performance; Investment Funds; Environmental Sustainability; Social Issues; Governance; Leading Change; Economy; Performance Improvement; Japan;

    Citation:

    Henderson, Rebecca, George Serafeim, Josh Lerner, and Naoko Jinjo. "Should a Pension Fund Try to Change the World? Inside GPIF's Embrace of ESG." Harvard Business School Case 319-067, January 2019. (Revised March 2019.)  View Details
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  10. 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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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 Rebecca Henderson, George Serafeim, Josh Lerner and Naoko Jinjo

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