Dr. Thomas P. Lyon recently taught a short course at Shanghai Jiao Tong University on Corporate Environmentalism and Public Policy. Lyon holds the Dow Chair of Sustainable Science, Technology and Commerce, with appointments in both the University of Michigan’s Ross School of Business and School for Environment and Sustainability. He talked with the Erb Institute about his experience teaching on these topics in Shanghai.

Q: How did this course at Shanghai Jiao Tong University come about?

Lyon: Professor Haitao Yin, a former Erb postdoctoral researcher who teaches at the university, invited me to teach it. I had previously taught a short Ph.D.-level course there on energy economics, but this was my first time teaching this course, which was aimed at MBA students in an international MBA program. About two-thirds of the students are Chinese and one-third are exchange students, most of whom are from Western Europe, but some are from India, Nepal, Germany and the Netherlands.

Q: What were the goals for the course?

Lyon: The general goal was to acquaint these MBA students with the many ways that environmental management matters nowadays. I thought it was really interesting that Chinese students are now getting some of that exposure. That’s not something Chinese firms have been concerned about for a long time, so I thought it was a great sign that they wanted to offer this course.

I tried to tailor it partly to the Chinese context but also to give them an understanding of how environmental issues affect companies in the U.S. and Western Europe, because that may give them some idea of what’s coming for China in the years ahead.

Q: Is there more of a need for sustainability education there?

Lyon: Yes. They are just not nearly as exposed to it or familiar with it as Michigan students. For example, I asked them if they were familiar with ecolabels like “organic” or “Fair Trade,” and most of them had no clue what those are. These practices are much less advanced in China.

Q: How do Chinese students’ perceptions of business sustainability issues differ from those of American students?

Lyon: One way to gauge that is to look at the topics they chose for their final papers. I had them write short final papers in teams, and I’ve taught this course in various places around the world—in Switzerland and California, and versions of it at the University of Michigan. Three of the Shanghai student teams chose to study steel companies, and a fourth studied a mining company. So the environmental issues Chinese students are thinking center around h mitigating the damage caused by heavily polluting industrial firms. In contrast, American students tend to be more interested in start-up companies that are creating new solutions to sustainability problems.

Q: What about awareness of environmental issues more generally?

Lyon: There is a strong awareness of air pollution. In many of the big cities, the air quality is terrible much of the time, and people are very aware of air pollution as an issue. I’ve been to Shanghai several times before, and one thing that’s really noticeable now is that, about two years ago, the government passed an ordinance that says that all scooters—motorized two-wheel vehicles—have to be electric. They seem to have done a pretty serious job of enforcement, so you don’t really see the diesel-engine scooters around anymore. The Chinese government is fairly tolerant of the growing number of environmental protests, as party leaders understand they need to make huge improvements in air and water quality. And they are willing to talk about climate change as a serious issue, unlike the current U.S. administration.

Q: What does that say about China’s progress toward sustainability?

Lyon: It’s still the giant, state-owned enterprises that are the focus of environmental concern in China, and they really have not yet gotten to a culture where everyday businesses feel they have to deal with environmental issues as an important issue. I think that time is coming, but for the Chinese students, the course was more about teaching them that if you’re going to operate in the Western world, you’ve got to pay more attention to sustainability than you’re used to paying in China.

Q: What opportunities do you see to bring concepts of sustainability through business in China?

Lyon: One of the first things that comes to mind is food—organic food, healthy food, trustworthy food. The Chinese have had a lot of scandals with additives and dangerous things in food. For example, in 2008 there was a scandal in which melamine was added to milk and infant formula, and over 50,000 babies were hospitalized as a result. The chemical has also been found in pet food from China that has killed family pets in the U.S. Chinese quality controls are still really poor, and there’s still a lot of corruption that goes on. So Chinese people are starting to become aware that maybe they need to seek out food products—especially produce—that are healthier than what they might expect to get off the shelf at an ordinary grocery store. I think that’s one of the big areas where things can be improved.

Another big opportunity is that China is making a big push for electric cars. The country will be a very important global driver of electrification, and the business world is going to play a crucial role in bringing that forward.

Q: What else have you learned about sustainability in China?

Lyon: I have a colleague in Beijing, Professor Xiaoli Zhou, who was a visiting scholar at the Erb Institute in 2008/2009, and she is putting in a proposal to the Chinese equivalent of the National Science Foundation for funding on a research project looking at movement toward a low-carbon economy, trying to increase the amount of renewable energy that’s used in China and trying to understand the incentives and disincentives that are created by the current Chinese system. One of the things I’ve learned from her is that, even though China has put in place incentives to build a lot of wind turbines, somewhere around 20 to 30 percent of them are not even connected to the electric grid. Local officials are rewarded for increasing GDP, and building a wind turbine looks like it’s an addition to GDP, but officials aren’t really concerned about whether it gets used. This project would be looking at ways to change that—to increase the installation of wind and solar and to move away from coal.

Q: So you have connections with people from the Erb community in China. Did you see any other evidence of the Erb Institute’s reach during this experience?

Lyon: There was a student from Nepal who came up and spoke to me after class a couple of times, and after the course was over, he contacted me about a product that he’s trying to get off the ground—a certain type of biodegradable utensil. He’s trying to find a market for them in the United States. I put him in touch with an Erb alum who had worked in Nepal for years before she came to Erb and has returned since then. She asked the Erb community for ideas about how to introduce his product to the U.S. So I got to see this Nepalese exchange student, whom I met in China, connecting back to the Erb community through an alum in Nepal—that was amazing. It shows that the Erb network really is global at this point.