MIT Sloan Management Review Executive Editor David Kiron
Once upon a time, resource-intensive industries—like paper manufacturing—faced constant criticism and public pressure from environmental groups. Attacks by Greenpeace on Asia Pulp & Paper (AP&P), for example, caused some customers to withdraw their orders.
But times are changing.
When, in 2012, AP&P wanted to remake its business model and how it acquires raw material — a significant undertaking—it waved the white flag and invited Greenpeace into the boardroom to help the company change its forestry sourcing practices.
“Never in our history had our shareholders sat in the same room with a ‘radical’ NGO like Greenpeace,” says Aida Greenbury, an AP&P managing director. “So it’s quite groundbreaking that we now sit together in our boardroom to discuss strategy and incorporate their input.”
AP&P’s experience is just one example of the burgeoning phenomenon of companies collaborating for sustainability, with a focus on transformational, strategic results. The practice of corporate sustainability is steadily moving beyond ad hoc.
When a group of students recently met with me about getting MIT to divest from fossil fuels, I suggested a more effective approach: If they really want to mitigate climate change, I suggested, start by calling out politicians and others who continue to deny the scientific consensus about climate change and its causes. And as I thought about the need to hold people accountable for the consequences of their science denial, I realized that institutions such as my own — not just our students — also need to get off the sidelines. We need to do a better job of defending and championing scientific truth.
And we cannot wait. The title for a Senate Committee on Environment and Public Works that opened on July 18 gets it right:“Climate Change: It’s Happening Now.” But so, too, is denial, and not just of the manmade causes of climate change.
The Sustainability Initiative at MIT Sloan fosters a community of innovators for sustainability among students and alumni. Take Shayna Harris, who is the cocoa sustainability manager for Mars Global Chocolate, for instance. Her job—which involves travelling to cocoa farms throughout Indonesia and Africa—helps farmers to increase their yields, which both boosts the global supply of cocoa and lifts people out of poverty.Shayna recently blogged about her job at Bloomberg Businessweek.– Jason Jay, Director, Sustainability Initiative at MIT Sloan
From Bloomberg Businessweek
A public service announcement to chocolate lovers: The world is facing a severe cocoa shortage by the year 2020. A deficit of this magnitude threatens the future of desserts and tasty snacks everywhere. Imagine a life without M&Ms, Snickers, and Dove Bars. Bleak, right?
All kidding and product placement aside (full disclosure: I’ve worked for Mars Global Chocolate since graduating from MIT SloanSchool of Management three years ago), this is serious business. The chocolate industry continues to grow, but today’s cocoa farmers don’t have access to the training and tools they need to boost productivity and meet future demand.
It is a basic tenet of economics that regulations almost always have unintended consequences. While Adam Smith may have been one of the first to understand this, he could not have possibly foreseen the morass of expensive and unwanted consequences that could come from conflicting emission and fuel standards enacted by the state of California and federal programs, such as for greenhouse gases and Corporate Average Fuel Economy.
Both the state and federal regulations have worthy goals: to decrease greenhouse-gas emissions and lower petroleum consumption. Yet taken together, the federal standards effectively cancel out the California standard. Instead of promoting fuel reduction as intended, the California standard allows for the production of less-efficient vehicles, while facilitating a massive transfer of cash via credit trading. It also forms a de facto industrial policy that sends us down a path toward electric vehicles that may or may not be the best technological or environmental choice for the future.
A few years ago, thought leaders and experts around the world began to meet to discuss the slow pace at which business seems to progress in tackling the challenges of innovation and change towards ideal models of sustainable enterprise. The result of those discussions was the launch of a unique initiative called GOLDEN for Sustainability (“Global Organizational Learning and Development Network”). Never before has such a multi-disciplinary, large-scale research project been undertaken in the management domain.
Since GOLDEN’s launch, experts from all business fields including, innovation, organization, strategy, marketing, accounting, human resources, business ethics and operations have been working with environmental scientists and social scientists (economists, sociologists, political scientists, psychologists etc.) to engage corporations in field experiments and clinical research. The goal is to understand how to improve and speed up the pace of business transformation to sustainable enterprises.