ERB PERSPECTIVE BLOG

Remarks by Faculty Director Andy Hoffman at the 2014 Erb Institute Holiday Gathering

I’d like to start with a vignette. I play in a casual summer golf league that is as much about beer drinking banter as it is about hitting a golf ball. We don’t generally talk about work. But one day Greg, a fellow golfer, asked me, “Hey Andy, what do you do for a living anyway?” I told him that I was a professor and that I studied environmental issues. He asked, “Do you mean like climate change? That’s not real, is it?” I told him that the science was quite compelling and that the issue was real. His next question was, “are you a Democrat or Republican?” I told him that I was an independent. He replied, “So what do you think about Al Gore?” I told him that I thought Al Gore had called needed attention to the issue but that he unfortunately also helped to polarize it as a partisan issue.

I think about that conversation often. Greg was not challenging my ideas, he was questioning my motives. He was trying to find out if he could trust me enough to listen to what I had to say, to figure out if I was part of his cultural community, his tribe. And I can imagine the hesitation he may have had in broaching this topic. Might I get condescending and give him a science lecture, challenging his lack of deep knowledge on the issue while asserting my own? Or, would I begin to judge him and his lifestyle, critiquing his choice of car, house, vacation habits or any one of the multitude of “unsustainable” activities that we all undertake? Or, might I begin to pontificate on the politics of the issue, complaining of the partisan split on the issue and the corporate influence on our political system? These are all plausible and unpleasant scenarios that lead people to avoid this topic.

These conversations come up enough—you’ve probably had one—that it is worth asking: What are we trying to get out of these discussions? Are we trying to change “heart and minds” or are we trying to make a point? Do we want to allow them a face saving way to come to their own conclusions or do we want to win, forcing them into acquiesce? In short, what is your theory of change?

This is a question we all have to ask ourselves.  While you are learning about the work that needs to be done to bring about a sustainable world, you also have to learn about how to help people to change the way they think. Continue reading

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Remarks by Managing Director Terry Nelidov at the 2014 Erb Institute Holiday Gathering

We were bringing all our thinking together under the pillar of “Sustainability Change Agents” – with an emphasis on systems thinking, including both social and environmental sustainability, and global perspective.

It was October and November that proved transformational for us, starting with the Erb Town Hall meeting, where students first asked the question that resonated with us for weeks afterwards …

“Is this enough?”

Is a change-agent approach within the current rules of the game enough to move from merely reducing unsustainability to promoting true sustainability? Or do we need to also be thinking about how to change those rules of the game – indeed changing not just individual companies but entire industries, business models, and eventually markets and economies – in order to achieve the deep sustainability that we all feel so passionate about?

This same question, “Is this enough?”, was echoed in the student focus group we had two weeks ago, with the encouragement to think bigger and bolder, given all the human, knowledge, and financial resources that the Erb Institute brings to the discussion.

So, we decided to step up to the challenge! We are keeping our first pillar squarely focused on getting things done for sustainability here and now – with today’s alumni, with today’s jobs in today’s companies. And we’re adding a second, more aspirational and decidedly more transformational pillar, challenging us to be constantly asking ourselves, “What’s next?” How are industries, business models, and marketplaces fundamentally transforming – down to the core business, social, and consumer values that drive them – in pursuit of a sustainable world? In other words, how is the very role of business in society being redefined? Continue reading

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Andy Hoffman, University of Michigan and Jenna White, University of Michigan

This summer, Pope Francis plans to release an encyclical letter in which he will address environmental issues, and very likely climate change.

His statement will have a profound impact on the public debate. For one, it will elevate the spiritual, moral and religious dimensions of the issue. Calling on people to protect the global climate because it is sacred, both for its own God-given value and for the life and dignity of all humankind, not just the affluent few, will create far more personal commitment than a government call for action on economic grounds or an activist’s call on environmental grounds.

Making a case on theological grounds builds on long-standing arguments in the Catholic catechism that environmental degradation is a violation of the seventh commandment (Thou shalt not steal) as it involves theft from future generations and the poor. Against such a moral backdrop, the very call to “make the business case to protect the global climate” – a common tactic to argue for action on climate change – seems rather absurd. The pope’s statement will shift the tenor of the public and political conversation in needed ways. Continue reading

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Andy Hoffman, University of Michigan

Last week, California Governor Jerry Brown described Senator Ted Cruz as unfit to run for office because of his “direct falsification of the existing scientific data” on climate change. Cruz fired back that “global warming alarmists” like Brown “ridicule and insult anyone who actually looks at the real data.” Here we go again.

This is but the latest example of the toxicity of the public debate over climate change.

To detoxify the debate, we need to understand the social forces at work. On the one side, this is all a hoax, humans have no impact on the climate and nothing unusual is happening. On the other side, this is an imminent crisis, human activity explains all climate changes, and it will devastate life on Earth as we know it. Amidst this acrimonious din, scientists are trying to explain the complexity of the issue.

To reach some form of social consensus on this issue, we must recognize that the public debate over climate change in the United States today is not about carbon dioxide and greenhouse gas models; it is about opposing cultural values and worldviews through which that science is viewed.

The opposing sides in this rhetorical war have less to do with the scientific basis of the issue and more to do with the ways in which people receive, assess and act upon scientific information. To move forward, we have to disengage from fixed battle on one scientific front and seek approaches that engage people who are undecided about climate change on multiple social and cultural fronts.  Continue reading

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By Tamar Koosed

By DFID - UK Department for International Development (Flickr: Lighting the way home in Sindh, Pakistan) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

By DFID – UK Department for International Development, via Wikimedia Commons

It’s been a busy start to 2015, sorry for the long hiatus! If you have been following this BoP blog series, you’ve explored different BoP business models and factors that may impact market penetration and profits, along with the need to account for community needs when developing and implementing a BoP strategy.

This post goes back to the beginning and discusses the need for more early stage financing for innovative BoP models. Seed capital allows companies to test and prove business models so these become ready for scaling up efforts and for traditional investors. But the the lack of early funding for BoP models curtails business participation in economic development and translates into missed opportunities to better the lives of low-income populations. How can these BoP ventures move away from the concept phase and into the early stages of funding?

 

BoP ventures are often faced with many challenges during their early stages of growth. Finding early stage funding is not a simple task and seems more difficult for BoP businesses when compared to more traditional investments. Oftentimes BoP ideas are difficult to benchmark and there is no market equivalent to angel investors (affluent individuals willing to provide capital for a business start-up in exchange for equity or for debt that can be converted into company shares) for these strategies. This lack of seed capital shrinks the pipeline of BoP businesses and impacts the number of ventures that eventually qualify for traditional capital investments. As a result, the thin pipeline stifles social impact. To circumvent these challenges, businesses have accessed creative early financing strategies such as grants, impact investors with patient capital, and even crowdsourcing. These options are described below. Continue reading

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By: Colton Babladelis

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Photo Credit: Colton Babladelis

I recently attended Ross Business Schools’ 25th Annual Ross Asia Business Conference January 30-31. One of the key points that I took from the Erb Institute’s panel on Energy, Innovation, and Sustainability was that thoughtful innovation can lead to major sustainability progress.

Our world is enveloped in technology. Our smartphones wake us up in the morning; our email feeds provide us with immediate contact to anyone in the world; and cars and planes can transport us distances that once seemed unfathomable.

So, if the boom in technology at the turn of the 20th century began the sharp increase of carbon emissions, industrial pollution, and many of the other challenges that we face today, why not look to technology to start remediating that very process? As we strive towards the pursuit of a sustainable world, small actions taken on a large scale can result in unprecedented reductions in waste and pollution.

Take, for example, some impactful areas for carbon emission reduction through advanced technologies in: Continue reading

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By: David Nowak

Panthera tigris sumatran subspeciesIn 1990, 45 investors and activists met in a lodge nestled in the Rocky Mountains to spend a weekend discussing the social and environmental aspects of investing. This past November, more than 500 participants gathered at the Broadmoor Resort in Colorado Springs to discuss how far impact investing has come over the past 25 years… and what’s ahead for the future. The 2014 SRI Conference (The Conference on Sustainable, Responsible, Impact Investing) formerly SRI in the Rockies, was a celebration of sorts.

Given its 25th anniversary, awards and special guest speakers abounded, giving the conference a familial “pat on the back” atmosphere. Approximately 25 percent of attendees had been to 10 or more SRI conferences, while 50 percent were first-time attendees. This seems like a curious statistic, until a participant pointed out that many long-attending organizations send new representatives each year. (Several participants noted the irony of holding an impact investment conference at a 5-star resort, an hour-and-a-half drive from the nearest large hub airport). Perhaps indicative of how far SRI and impact investing as a whole has progressed, the majority of attendees were from an array of established impact investing firms. This may not quite yet have grown beyond a boutique industry, but it’s a very large one. Continue reading

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This blog originally appeared on Geographical and U-M blog, The Conversation.

By: Andy Hoffman

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By Jmcdaid (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Climate change appears to have joined sex, religion, and politics as an issue that people try not to discuss in polite conversation. Indeed, according to a survey by the Yale Project on Climate Change Communication, two-thirds of Americans rarely if ever discuss global warming with family or friends. Those that choose to open up the topic will find that it sharply divides people along ideological lines. A 2013 survey by the Pew Research Center found that 50% of Republicans believe that “global warming evidence is solid,” while the corresponding number for Democrats is 88% (62% of Independents and only 25% of Tea Party Republicans). How did this happen? When nearly 200 scientific agencies around the world (including those of every one of the G8 countries) and 97% of the 11,944 peer-reviewed journal articles between 1991 and 2011 endorse the position that climate change is happening, why is there such an emotional and vitriolic debate over this single scientific issue?

The answer is because the public debate over climate change is no longer about science. It is about values, culture, worldviews and ideology. As physical scientists explore the mechanics and implications of anthropogenic climate change, social scientists explore the cultural reasons why people support or reject their scientific conclusions. What we find is that scientists do not hold the definitive final word in the public debate on this issue. Instead, the public interprets and validates conclusions from the scientific community by filtering their statements through our own worldviews. Continue reading

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DSC00176David and I stood in a small room in front of a special machine used to visually sort coffee beans after they are harvested and dried. We listened carefully as the machine’s operator explained (through our translator) that this machine ensures only the highest quality coffee beans are packed and sold.

Marvin, a small-holder coffee farmer, stood by and nodded in agreement. The sorting machine was the last stop on our tour of PRODECOOP, one of Nicaragua’s 10 largest coffee co-ops, and as we emerged into the sun from the warehouse enclosing the small room, I squinted, taking in the lush green mountain landscape of north-central Nicaragua.

With an end goal of helping farmers capture more value from the coffee they grow, we had come to Nicaragua committed to achieving a better understanding of:

  1. how small-scale farmers make money, and
  2. how entrepreneurs in the coffee industry are challenging existing business models.

Continue reading

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by Santiago Bunce

Children playing with a dogThis week we open a parenthesis in our 7 post series about the positive impacts of BoP strategies to take a look at cases where profits trump development goals.

So far we have argued that offering products and services in BoP markets not only provides profits for companies, but also benefits BoP consumers socially and economically. Here are the 4 previous posts in this series:

Social Enterprise: Understanding the Base of the Pyramid
The Business Case for BoP Strategies
Distinguishing Between Demand and Need in the BoP
Incubating Expertise: Fostering Partnerships within the Community

Here we take a closer look at why companies also have the obligation to promote social and economic development.

Ideally, profits and development intersect in a way that creates shared value. But this is not always the case. When profits remain the main driver for companies, the services and products provided may have limited or no economic and/or social benefit for the community. Continue reading

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