Environmental Sustainability
49 Results
- 22 Mar 2013
- Research & Ideas
Pulling Campbell’s Out of the Soup
- 10 Jan 2013
- Working Papers
Pay for Environmental Performance: The Effect of Incentive Provision on Carbon Emissions
Research has shown that reducing carbon emissions and exhibiting good environmental performance are important for corporations. But how exactly are these environmental goals carried out within organizations? In this paper, the authors analyze the incentive structures of climate change management for a sample of large, predominantly multinational organizations. The authors then characterize and assess the effectiveness of different types of incentive schemes that corporations have adopted to encourage employees to reduce carbon emissions. Results suggest that contrary to widespread belief in the effectiveness of monetary incentives, in fact the adoption of monetary incentives is associated with higher carbon emissions. By contrast, the use of nonmonetary incentives is associated with lower carbon emissions. Overall, the study suggests that socially positive tasks significantly impact the effectiveness of different types of incentives and should be considered in the design of accounting and control systems. Read More
- 26 Dec 2012
- Working Papers
Reinforcing Regulatory Regimes: How States, Civil Society, and Codes of Conduct Promote Adherence to Global Labor Standards
Multinational corporations are under increasing pressure to manage their global supply chains in ways that are environmentally sustainable and socially responsible. Many companies have responded to this pressure by asking their suppliers to adhere to codes of conduct governing labor conditions and environmental management. This paper examines the conditions under which tens of thousands of suppliers across many countries are more likely to adhere to the labor practices these codes of conduct call for. Findings indicate that suppliers are more likely to adhere to codes of conduct in countries that not only have made binding domestic and international legal commitments to protect workers' rights, but that also have high levels of press freedom and nongovernmental organization activity. Greater code of conduct adherence is also found among suppliers that serve buyers located in countries where child labor is a more salient issue. This research reveals the critical importance of maintaining multiple, overlapping, and reinforcing governance systems, and urges caution to those hoping that private regulatory regimes can substitute for effective government regulation. Overall, this paper points the way toward building more effective private regulatory regimes. Read More
- 19 Nov 2012
- Research & Ideas
LEED-ing by Example
- 15 Nov 2012
- Research & Ideas
Funding the Design of Livable Cities
- 21 Sep 2012
- Working Papers
Public Procurement and the Private Supply of Green Buildings
Government purchasing programs often have policy objectives that go beyond getting a good deal for the taxpayer. For example, governments may purchase products with enhanced environmental or safety features not only to reduce environmental impacts and safeguard employees, but also to promote broader adoption of similar products in the private market. Such policies have been deployed by governments across the United States and European Union, but little is known about how well they actually work. This paper examines the impact of environmentally friendly government procurement policies on private-sector adoption of the targeted products. The authors find that municipal government green building procurement policies that apply only to municipal buildings also accelerate the use of green building practices in the private sector, both in the cities with these policies as well as in neighboring cities. They also find that such government policies encourage private-sector investment in complementary services, which likely reduces green building costs to private developers. Read More
- 14 Jun 2012
- Working Papers
“Power from Sunshine”: A Business History of Solar Energy
In each generation, the concept of getting "power from sunshine" has attracted entrepreneurial visionaries who encountered a perennial problem: Solar energy was expensive compared to conventional fuels that were not priced to incorporate wider environmental costs. This paper by Geoffrey Jones and Loubna Bouamane provides a business history of solar energy between the nineteenth century and the present day. Its covers early attempts to develop solar energy, the use of passive solar in architecture before World War II, the subsequent growth of the modern photovoltaic (PV) industry, and alternative non-PV technologies such as parabolic collectors. As the authors argue, building viable business models proved crucially dependent on two factors: the prices of alternative conventional fuels and public policy. Read More
- 18 Apr 2012
- Research & Ideas
HBS Cases: Who Controls Water?
- 06 Jan 2012
- Op-Ed
Where Green Corporate Ratings Fail
- 22 Nov 2011
- Working Papers
Carbon Tariffs: Impacts on Technology Choice, Regional Competitiveness, and Global Emissions
Under current emissions regulation such as the European Union Emissions Trading Scheme (EU-ETS) and the Regional Greenhouse Gas Initiative (RGGI) in the Northeast US, imports entering the region fall outside the regulatory regime and incur no carbon costs. As a result, imports can compete within the carbon-regulated region with a new-found advantage, potentially altering the competitive balance between emissions-regulated and -unregulated firms. While implementing carbon tariffs—border adjustments— may appear to be a straightforward solution to this asymmetry, the potential for such a measure to be interpreted as a trade barrier, and thereby initiate a reciprocal tariff, has thus far stymied debate on the issue. This paper explores the impact of such border adjustments on firms' technology choice, regional competitiveness, and global emissions. The analysis shows that border adjustments (or lack thereof) play a vital role in determining firms' technology and production choices, both of which are fundamental operations management decisions that ultimately determine economic and environmental performance. Results have implications for each of the primary stakeholders: regulators making the policy decision regarding border adjustments; firms interested in understanding their competitiveness and location strategies under a border adjustment; and technology producers interested in assessing the potential impact of border adjustments on demand for cleaner technologies. Read More
- 15 Nov 2011
- Working Papers
Engaging Supply Chains in Climate Change
Managing a company's risks and opportunities associated with climate change—including its physical and regulatory implications—requires focusing not only on internal operations, but also on supply chains, especially since greenhouse gas (GHG) emissions in supply chains typically exceed those from a company's own operations. But this requires obtaining climate change information from suppliers, which some are reluctant to share. In this paper, Chonnikarn (Fern) Jira and Michael W. Toffel examine proprietary data from the Carbon Disclosure Project's Supply Chain Project, a collaboration of multinational corporations asking their key suppliers to share information about their GHG emissions and their vulnerabilities and opportunities associated with climate change. Jira and Toffel find evidence that a supplier is more likely to share this information when it faces several buyers requesting the information, when its buyers appear committed to actually using this information, and when the supplier is in a relatively competitive industry and is thus particularly vulnerable to being replaced by its rivals. These findings can help managers better predict which suppliers will be more willing to share climate change information, and which might require more incentives or pressure to share this information. Read More
- 14 Nov 2011
- Working Papers
The Impact of a Corporate Culture of Sustainability on Corporate Behavior and Performance
Robert G. Eccles, Ioannis Ioannou, and George Serafeim compared a matched sample of 180 companies, 90 of which they classify as High Sustainability firms and 90 as Low Sustainability firms, in order to examine issues of governance, culture, and performance. Findings for an 18-year period show that High Sustainability firms dramatically outperformed the Low Sustainability ones in terms of both stock market and accounting measures. However, the results suggest that this outperformance occurs only in the long term. Managers and investors who are hoping to gain a competitive advantage in the short term are unlikely to succeed by embedding sustainability in their organization's strategy. Overall, the authors argue that High Sustainability company policies reflect the underlying culture of the organization, where environmental and social performance, in addition to financial performance, are important, but these policies also forge a strong culture by making explicit the values and beliefs that underlie the mission of the organization. Read More
- 21 Oct 2011
- Working Papers
Market Interest in Nonfinancial Information
During the past two decades, there have been many ideas for improving business reporting of nonfinancial information such as on a company's environmental, social, and governance (ESG) performance. Using data from Bloomberg, authors Robert G. Eccles, Michael P. Krzus, and George Serafeim provide insights into market interest in nonfinancial information at a level of granularity not available until now. They identify exactly what information is of greatest interest, contrasting both the global and U.S. market across the full spectrum of ESG information and for each component of ESG, as well as Carbon Disclosure Project metrics. They also show variation in interest across asset classes and firm types, and present preliminary explanations for these differences. Read More
- 18 Oct 2011
- Working Papers
Historical Trajectories and Corporate Competences in Wind Energy
Analyzing developments in the wind turbine business over more than a century, Geoffrey Jones and Loubna Bouamane argue that public policy has been a key variable in the spread of wind energy since the 1980s, but that public policy was more of a problem than a facilitator in the earlier history of the industry. Geography has mattered to some extent, also: Both in the United States and Denmark, the existence of rural areas not supplied by electricity provided the initial stimulus to entrepreneurs and innovators. Building firm-level capabilities has been essential in an industry which has been both technically difficult and vulnerable to policy shifts. Read More
- 07 Oct 2011
- Working Papers
What Environmental Ratings Miss
Environmental ratings of companies are based on "green" management efforts and the environmental performance of their operations. In this paper, Michael Toffel and Auden Schendler argue that these ratings neglect companies' actions that seek to influence environmental policy, which can have a much broader impact than their internal efforts. As a result, sustainability ratings risk seriously misleading consumers and investors, and can even enable "greenwashing" by allowing corporations to game the system, gaining high rankings for greening their operations despite advocating for less stringent environmental policy. Toffel and Schendler argue that environmental ratings should factor in political contributions, CEO advocacy work, and engagement with non-governmental organizations, among other actions. This would erode the environmental ratings of companies advocating weaker environmental policy, and bolster the ratings of those advocating more stringent environmental policy. Read More
- 19 Aug 2011
- Working Papers
The Globalization of Corporate Environmental Disclosure: Accountability or Greenwashing?
Between 2005 and 2008, the world saw a dramatic increase in corporate environmental reporting. Yet this transition toward greater transparency and accountability has occurred unevenly across countries and industries. Findings by professors Christopher Marquis and Michael W. Toffel provide the first systematic evidence of how the global environmental movement affects corporations' environmental management practices. Firms' use of symbolic compliance strategies, for instance, is affected by specific corporate characteristics and by institutional context. This study contributes to a larger body of research on the effects of global social movements and environmental reporting. Read More
- 22 Jul 2011
- Working Papers
Corporate Social Responsibility and Access to Finance
Corporate social responsibility may benefit society, but does it benefit the corporation? Indeed it does, according to a new study that shows how CSR can make it easier for firms to secure financing for new projects. Research was conducted by George Serafeim and Beiting Cheng of Harvard Business School and Ioannis Ioannou of the London Business School. Read More
- 17 May 2011
- Working Papers
The Consequences of Mandatory Corporate Sustainability Reporting
The number of firms reporting sustainability information has grown significantly in the past decade, both due to voluntary actions and to mandates from several national governments and stock exchange authorities. In this paper, London Business School's Ioannis Ioannou and Harvard Business School's George Serafeim investigate whether mandatory sustainability reporting has any effect on a company's tendency to engage in socially responsible management practices. Read More
- 09 Feb 2011
- Working Papers
Sustainable Cities: Oxymoron or the Shape of the Future?
Among the issues looming large in the twenty-first century is a rapid rise in the number of people living in cities and a rapidly growing awareness of our threat to the Earth's environment. In response to both, a number of major corporations and various government bodies have teamed up to explore the idea of "ecocities" —urban communities ideally designed around the idea of environmental sustainability. This paper explores the idea by looking at several ecocities in progress in China, Abu Dhabi, South Korea, Finland, and Portugal. Research by professors Robert G. Eccles and Amy C. Edmondson, doctoral candidate Tiona Zuzul, and HBS research assistant Annissa Alusi. Open for comment; 2 Comments posted.
- 15 Dec 2010
- Working Papers
Cognitive Barriers to Environmental Action: Problems and Solutions
Researchers have long studied the cognitive barriers that cloud our thinking and decision-making. In a recent book chapter, HBS doctoral student Lisa L. Shu and professor Max H. Bazerman look at three barriers that can prevent clear decision-making, specifically on environmental issues. They also propose ways in which these biases could be put to advantage in promoting sound environmental policy and practice. Read More
- 09 Aug 2010
- Research & Ideas
How to Speed Up Energy Innovation
We know the grand challenge posed by shifting away from dirty energy sources. The good news, says Harvard Business School professor Rebecca Henderson, is that we have seen such change before in fields including agriculture and biotech, giving us a clearer pathway to what it will take. Read More
- 06 Jul 2010
- Research & Ideas
Renewable Energy: Winds at Our Back?
It certainly stirred up controversy in 2001 when an entrepreneur proposed erecting 130 wind turbines off the coast of Massachusetts' Cape Cod. After nine years of struggle over regulatory, environmental, safety, and social issues, the plan appears closer to becoming a reality. HBS professor Richard Vietor reflects on wind energy and innovations in the renewable energy industry. Read More
- 28 Apr 2010
- Working Papers
Environmental Federalism in the European Union and the United States
Under what circumstances will individual states take the lead in passing the most stringent environmental regulations, and when will the federal government take the lead? When a state takes a leadership role, will other states follow? HBS professor Michael Toffel and coauthors describe the development of environmental regulations in the U.S. and EU that address automobile emissions, packaging waste, and global climate change. They use these three topics to illustrate different patterns of environmental policymaking, describe the changing dynamics between state and centralized regulation in the United States and the EU. Read More
- 24 Feb 2010
- Working Papers
Accelerating Innovation In Energy: Insights from Multiple Sectors
How should the energy sector best respond to the threat of climate change? In this introductory chapter to a forthcoming book, Harvard Business School's Rebecca M. Henderson and Richard G. Newell of Duke University frame the discussion by highlighting the volume's contributions concerning four particularly innovative sectors of the U.S. economy: agriculture, chemicals, life sciences, and information technology. These four sectors have been extraordinarily important in driving recent economic growth. Henderson and Newell describe why accelerating innovation in energy could play an important role in shaping an effective response to climate change. Read More
- 11 Mar 2009
- HBS Cases
The Energy Politics of Russia vs. Ukraine
- 03 Nov 2008
- HBS Cases
Economics of the Ethanol Business
- 01 Oct 2008
- Working Papers
Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies
Social activists are increasingly attempting to directly influence corporation behavior, using tactics such as shareholder resolutions and product boycotts to encourage companies to improve their environmental performance, increase their transparency about operations and governance, and more stringently monitor their suppliers' labor practices. This paper examines how companies are responding to these pressures, in the context of requests for greater transparency about the risks climate change poses to their business—and the strategies these companies have developed to address these risks. This paper reveals that a company is more likely to comply with social activists' requests for greater transparency about climate change when the company itself, or other companies in its industry, has been targeted by formal shareholder resolutions on environmental topics—and when the company is facing potential regulations restricting greenhouse gas emissions. These findings demonstrate that changes in corporate practices may be sparked by both social activists and by the mere threat of government regulations, and that challenges mounted against a specific firm may inspire broader changes within its industry. Read More