The Erb Institute is joining the Global Climate Action Summit in San Francisco, CA on September 12, 2018, to host a roundtable “Developing Climate-Business Strategies: Partnering with Universities for Science-Based Impact.” This invitation-only affiliate event will bring together senior-level business, academic and non-profit executives and thought leaders and will focus on how to build and leverage partnerships with universities—like the University of Michigan’s Erb Institute—to:
- strengthen employee skills in developing and implementing climate risk management initiatives, and in executing external partnerships;
- share ideas, methods and lessons learned for developing business strategies that both address climate change risks and are science-based;
- assess the benefits of business strategies and investments that will meaningfully address climate change risks; and
- support innovation and improve corporate strategy development and decision-making.
The Erb Institute will carry on the momentum built at this workshop over the coming year with outreach, research and educational activities geared toward implementing the ideas generated at the roundtable.
Erb Institute Faculty Director Joe Árvai shares his thoughts on the importance of this upcoming roundtable:
“Take a look around you, wherever you happen to be; what do you see? Record heat waves. Wildfires burning out of control. Crop failures. The collapse of ice sheets. Declining air quality and public health. Economic insecurity. The list goes on.
Climate change is no joke, it shouldn’t be a political gambit, and it is most certainly not fake news. It is real, and it is creating risks that large swaths of society may never be able to recover from.
If I’m being honest, the time for real action on climate change was a decade, if not more, ago. That said, it’s not in my nature to quit even though we are behind.
It’s for this reason that the Erb Institute is participating in this important event. Governor Brown has brought together global leaders of all stripes not just to talk, but to commit to action aimed at mitigating the risks posed by what is now runaway climate change.
If we’re to do this, and I mean really do this, everyone is going to have to play their part. And that includes the private sector. Yes, lots of companies–including many of the Erb Institute’s closest partners–have made significant progress toward reducing their carbon footprint. However, the vast majority of companies are still part of the climate problem, not the solution: While they may talk about climate action over here, they continue to promote climate destabilizing production and consumption over there. That simply has to stop.
All of us at the Erb Institute look forward to participating in the Global Climate Action Summit, and to working with business over the long term to make meaningful climate action a reality. That includes new research on tools and strategies that will transform companies, markets and marketplaces; and it includes engagement with business that hammers home the simple fact that we will not beat back the risks associated with climate change by nibbling at the proverbial edges.
The world needs big and bold action on climate change. And it needs it now.”
For more information on the roundtable, click here.
The world’s most innovative, customer-centric, inclusive and sustainable materials science company, “New Dow” is setting the bar high in reinventing this globally recognized brand.
“New Dow” is the internal name tag for the company’s Materials Science division, which is one of three planned spinoffs from last year’s DowDuPont merger. New Dow, with nearly $44B in 2017 pro forma revenue, aims to be nothing less than the “premier materials science solutions provider.”
But is this fiery new ambition too high of a bar for a legacy company with—as some would argue—a traditional management culture and a renowned engineering mindset? The Dow Sustainability Academy has given me reason to rethink old assumptions. If anyone can bring this ambition to life, it’s the up-and-coming sustainability leaders who have been the inspiration for—and target of—the Dow Sustainability Academy over the past 18 months.
The Dow Academy is a partnership among Dow, the Erb Institute and Ross Business School’s Executive Education Program. Now in its third edition, each cohort brings together roughly 40 Dow employees every six months for a four-day sustainability boot camp covering the science, business, policy and decision-making of sustainability. The most recent academy took place July 10-14 in Midland and Ann Arbor, focused mostly on North American employees, with a few liaisons from the company’s South American, Asian, African and European operations as they expand the program globally. Erb Faculty Director Joe Árvai works with Dow’s program manager to design each academy, and then recruits a multidisciplinary team of instructors from across the University of Michigan—including professors from Ross, the School for Environment and Sustainability, College of Literature, Science and the Arts, and the Ford School of Public Policy.
What’s unique about the Dow Academy is that, unlike most exec-ed training, implementation is baked into the program itself.
After the week of learning, employees return to their jobs but immediately begin applying the tools and insights to practical team projects across a broad range of Dow divisions, functional areas, product lines and geographies. Each project, sponsored by a senior Dow leader, is designed to support delivery on one of the Dow 2025 Sustainability Goals. Six months later, the cohort reports on their work to Dow’s chief sustainability officer and other senior business leaders in Midland and shares their tips and lessons learned with the incoming cohort, who head to Ann Arbor that day to begin their training.
I’ve been an instructor in three academies and have heard project stories from two completed cohorts. What stands out for me confirms the old adage that people (still) matter! Even in this epoch of virtual collaboration, accelerated technology and big data, it’s people who get things done, working with other people.
With each new cohort, we keep hearing that some of the project teams’ greatest sustainability challenges are actually people challenges—how to get things done in large, complex, global organizations with distributed leadership, dotted-line reporting, and real human beings making decisions.
While each academy dives into the technical aspects of sustainability analysis and business strategy—from life-cycle assessment to systems thinking and environmental policy—we complement those technical skills with an equally deep dive into management and the human condition, including sessions on leadership and influence, change agents, stakeholder engagement and harnessing people’s natural biases for better management decision-making.
New Dow’s ambition is an inspirational one, and these New Leaders can bring it to life.
I was excited to attend and present at Sustainable Brands 2018. My research focuses on how organizations are engaging with sustainability challenges, and my work’s motivation stems from my deep-seated hope that business will transform how we address the many societal challenges that we face today. I believe that business is uniquely situated to help solve challenges like climate change and poverty. It was inspiring to hear from hundreds of companies at Sustainable Brands that are working to redefine how they do business—to do well by doing good.
As a University of Michigan faculty member, it was also exciting to have an opportunity to share my research with an audience of practitioners. My academic career often feels split—research and conferences with other academics, and teaching with practitioners. Yet for our research to have impact beyond the ivory tower—as Professor Andy Hoffman at Erb challenges us to do!—we must engage with practice around data collection, analysis and sharing of findings. Sustainable Brands was a great chance for me to do that.
I shared research I had done a few years ago with Kate Heinze, associate professor of Sport Management, University of Michigan. We did a case study on the Detroit Lions and how they developed a new, more strategic approach to engagement with the local community. Kate and I had been working on a different research project in Detroit, focusing on FoodLab Detroit and the emergence of a sustainable food economy in the city. As we spoke with different food entrepreneurs, we kept hearing about the Detroit Lions as an example of a fantastic partner to these early-stage business people. We started to explore what the Lions were doing and how they were having such a positive impact.
The Lions had recently transitioned from a traditional model based on charitable giving to a more focused development model with the goal to “support transformational efforts that improve the wellbeing of metro Detroit’s underserved communities” (Lions’ Living for the City, 2013). In our assessment we found the Lions narrower and deeper approach (focused on community health and local development), to be both more strategic, and necessitating a stronger commitment to the city. This novel model of sustainable partnerships for impact contrasts with a more standard approach to community engagement—philanthropic donations of funding.
An initial step in the Detroit Lions new approach was to complete a concerted, bottom-up process of identifying the city’s needs. The Lions community relations team met with many leaders throughout Detroit—to learn from them and better understand all the activities and expertise that already existed in the city. The team then identified how their own strengths mapped to a long list of community needs, narrowing their areas of focus to those topics that were the best fit between city need and team resources and goals. Thus, the Lions were deliberate in the areas they selected and focused on these two primary areas to develop and strengthen linkages with community stakeholders. Our research identified this as a critical element of their success—recognizing what skills they had and how they could apply them to the city’s needs.
Communication and Outreach
Once community partners were identified, the next step was communication and outreach. The Lions mindfully considered both what their role should be and how their involvement should be perceived. It was clear to both Kate and I that the Lion’s path towards mindful engagement was critical in the Lions successful outreach. Several key themes were identified that characterize these partnerships:
- Respect and humility: listen to different perspectives, defer to the expertise of various partners, and respect the knowledge and experience of long-standing community organizations
- Enabler role: engage in a helping, rather than self-serving and imposing, manner
- Authenticity: a more genuine commitment to helping Detroit’s revitalization; not simply about money or visibility
- Mutual benefits: partnerships that benefit themselves and their partners in terms of more specific organizational goals
- Brokerage: connect different organizations committed to aiding Detroit
As I shared these findings with the audience at Sustainable Brands, it was affirming to hear how much these ideas resonated. Leaders across different companies met with me after to discuss how they are developing partnerships for their own projects and to ask about various considerations with respect to building sustainable partnerships for impact. The talk also generated a thought-provoking discussion about “what is impact?” that touched on how to measure the impact of community partnerships, the importance of recognizing causality, and the critical step of defining—and aligning—objectives for each partner in a project.
I look forward to continued conversations about impact through partnerships. Through my research, teaching and engagement with practitioners, I hope to connect with many in the Erb community.
Note: research findings adapted from Heinze, K. L., Soderstrom, S., & Zdroik, J. (2014). Toward strategic and authentic corporate social responsibility in professional sport: A case study of the Detroit Lions. Journal of Sport Management, 28(6), 672-686.
In June, Erb Managing Director Terry Nelidov and I traveled to London to attend Innovation Forum’s two-day conference, “How business Can Measure the Impact—and ROI—of Corporate Sustainability.” This event dove into the complexity associated with holistically measuring, communicating and responding to a corporation’s social, environmental and economic impacts.
U.K.-based Innovation Forum conferences take a unique approach, following Chatham House Rule (the content of the discussion can be shared publicly but not attributed to individual participants) and a strict zero-slides policy. This format offers a breath of fresh air, enabling and encouraging speakers and audience members to speak frankly and directly about the challenges they face and the sometimes unpalatable realities of the business sustainability landscape.
At the conference, Terry participated on a panel discussion titled “Social License to Operate: Can Companies Really Value Their Environmental and Social Footprint? What Is the Cost of Failing to Do So?” Drawing from his extensive experience working with communities, nonprofits and extractive companies in Latin America, Terry spoke about the importance of using key principles as an anchor during times of community crisis. For the Erb Institute, these principles include the core beliefs that people matter, organizational operations should align with and reflect community interests and values, and shared learning and best practices are already available (i.e., they don’t need to be re-invented) to support resilience. Terry pointed to the Erb Institute’s foundational, practitioner-focused Stakeholder Engagement Toolbox as a resource to guide companies as they set out to develop a robust stakeholder engagement process.
I was struck by a few key common themes that surfaced over the two days. There was widespread agreement that the landscape of sustainability reporting tools and frameworks is very crowded, making it difficult for companies to decide how to meaningfully measure and communicate their sustainability impact.
Many conversations also led to the conclusion that having a company culture that is rooted in shared sustainability values is critical for impact. Finally, companies need to rely on their materiality assessment to identify and respond to the sustainability-related risks that are most material to their company, and prioritize what matters most for their companies and their stakeholders.
The London conference nicely set the stage for Innovation Forum Detroit, scheduled for October 2-3, 2018 in historic downtown Detroit. As part of our “Conversations with Consequence” series, the Erb Institute is collaborating closely with Innovation Forum to develop a dynamic agenda on defining and measuring sustainability impacts, and a participants roster from across the US and around the globe. Learnings from London will inform discussions in October, with a nod to the challenges and opportunities of business in contributing to the growth that Detroit is experiencing!
“First-Year Text” is an initiative that Loyola University instituted in 2006, in which all of Loyola’s first-year students read the same book over the summer. The book chosen for the 2018 First-Year Text is Finding Purpose: Environmental Stewardship as a Personal Calling, by Andrew Hoffman.
In this book, Hoffman “invites us to look beyond material growth and explore the role of the individual and business in discovering a wider purpose to bring about a balanced and sustainable society,” according to the publisher’s description.
Martin Finnie, program coordinator for First-Year Text, shared a little bit about the process for choosing the book. In October of the prior year, a campus-wide solicitation invites the Loyola community to nominate a book for review. This list is narrowed down to 12-15 selections that the committee divides up and reads, and then they choose one.
This fall, 4,000 first-year students will enter campus having read the book and ready to enter into introspective discussion, specifically as part of Loyola’s “Communities in Conversation” series, which aims to encourage students to make a fundamental commitment to environmental sustainability and justice, and to help them find their passion to serve the world’s needs.
When asked what it was about the book that felt like a good fit for the program, Finnie explained, “Finding Purpose speaks to a person’s responsibility as a part of planet Earth. This very much aligns with Loyola’s values, specifically being a globally minded individual. The text does a great job calling upon everyone to evaluate how they impact the Earth in their career, through their faith or in society in general. We hope to help students discover their calling or vocation, if they have not done so already, and we believe Finding Purpose can help to do this while keeping the world’s needs in focus.”
He added, “We hope that students understand the positive impact they can have on the world.”
To continue the important conversation around sustainability, we’re partnering with The Dow Chemical Company to host a Twitter chat Tuesday, July 31 at 12 p.m. ET.
The chat is an extension of topics touched on during the Elements of Sustainability Series and will allow you to discuss the online lectures that interest you most. During the 2018 Elements of Sustainability Series, renowned sustainability leaders shared valuable insight on ways to integrate sustainability into all facets of life.
We invite you to join us and spread the word on Twitter: Join @ErbInstitute for the #SustainabilitySeriesChat to continue the conversation on trends shaping the sustainability landscape July 31, 12 pm ET.
Advancing sustainability starts with honest dialogue. We hope you will take this first step with us and encourage others to partake in the conversation as well.
Today, most large companies like Exxon Mobil, Ford and GM issue slick reports extolling their efforts to conserve resources, use renewable energy or fund clean water supplies in developing countries. This emphasis on efforts to curb environmental harm while benefiting society is called corporate sustainability.
Once uncommon but now mainstream, this show of support for a greener and kinder business model might seem like a clear step forward. But many of these same companies are quietly using their political clout, often through industry trade associations, to block or reverse policies that would make the economy more sustainable. And because public policy raises the bar for entire industries, requiring that all businesses meet minimum standards, lobbying to block sound public policies can outweigh the positive impact from internal company initiatives.
This kind of corporate hypocrisy – what we call talking green while lobbying brown – is a form of greenwashing, in which companies trumpet their good deeds while hiding their efforts to block progress. As the past and present presidents of the Alliance for Research on Corporate Sustainability, we are concerned that this greenwashing may delay by years or even decades steps that might solve sustainability problems, such as slowing the pace of climate change or ending the ocean plastic pollution crisis.
Greenwashing is environmentally responsible talk without action. By Tamixes/Shutterstock.com
Sounding good yet lacking impact
We and our colleagues in the alliance have documented many business initiatives that fall short of the impact they claim. One of the best known was the chemical industry’s Responsible Care program, created after an explosion at Union Carbide’s plant in Bhopal, India, killed thousands of people in 1984. Strategy professors Andy King and Mike Lenox showed that participants actually made less progress in reducing their emissions of toxic chemicals than did nonparticipants. That prompted the industry to overhaul the program.
Or consider the Climate Challenge program. The Energy Department created this now-defunct partnership between business and government to encourage electric utilities to voluntarily reduce their greenhouse gas emissions. When one of us teamed up with Management Professor Maria Montes-Sancho to evaluate its track record, we found that there was no difference overall between participants and non-participants in their emissions reductions.
Both of these voluntary initiatives failed to solve environmental problems, so why were they created?
In the case of Responsible Care, chemical industry documents show that one of the program’s main goals was preempting tighter regulations. Likewise, public statements the electric utility industry and the Energy Department made indicate that they formed Climate Challenge to stave off new regulations.
And following the Trump administration’s plan to spike the Clean Power Plan, a federal rule that would have limited air pollution from power, utilities have essentially avoided federal climate regulation to date.
Even though these and other voluntary initiatives accomplish little of substance, they help call attention to the good steps industries appear to be taking instead of the environmental damage they are causing – which is exactly how greenwashing works.
Talking green while lobbying brown
As we and our colleagues explain in an upcoming article in the business journal California Management Review, it is easy to get away with greenwashing in part because it’s hard to detect what companies lobby for in the U.S., as there is no requirement to disclose the positions they espouse.
“Despite the statements emitted from oil companies’ executive suites about taking climate change seriously and supporting a price on carbon, their lobbying presence in Congress is 100 percent opposed to any action,” Sen. Sheldon Whitehouse, a Rhode Island Democrat, lamented in Harvard Business Review.
Exxon Mobil has clearly engaged in this doubletalk. The corporation declared in its 2016 Corporate Citizenship Report that “climate change risks warrant action by businesses, governments and consumers, and we support the Paris Agreement as an effective framework for addressing this global challenge.” Yet the nonprofit group InfluenceMap recently found that Exxon was one of the top three global corporations in lobbying against effective climate policy.
Exxon Mobil’s hypocrisy may not be surprising given the company’s long history of funding climate deniers. However, it is far from alone in talking green while lobbying brown. Indeed, even companies with much stronger records on sustainability than Exxon do this, often through industry trade groups.
For example, Ford said in its 2017 sustainability report that “we know climate change is real, and we remain committed to doing our part to address it by delivering on CO2 reductions consistent with the Paris Climate Accord.” GM’s sustainability report stated that “General Motors is the only automaker on the 2017 Dow Jones Sustainability Index for North America, and is also on the World Index.”
Yet as Alliance for Automotive Manufacturers members, Ford and GM both lobbied the Trump administration to weaken fuel economy standards – a strong tool for reducing vehicle emissions.
More political transparency needed
When companies hide their political opposition to sustainability policies, it deprives investors of the right to know how their funds are being used. This obfuscation also denies consumers the right to vote with their wallets for greener products.
We believe the best way to expose this duplicity is by requiring corporations to disclose more details about their political actions. For instance, new laws might demand that companies, both individually and as part of industry associations, make their lobbying stances public, and reveal which politicians they have called on to take a given position.
And companies could be forced to reveal what they spend on so-called “independent” political advertisements, also known as issue ads.
In the U.S., one good option would be to update the Lobbying Disclosure Act to require more detailed reporting, including spending on astroturf lobbying, the practice of using fake grass-roots groups to influence public opinion.
The private sector can take action too. In Europe, the Vigeo Eiris rating agency has begun to assess corporate political transparency. Such evaluations would become much more powerful if required by leading investment managers. That is why we see the recent call by BlackRock, the world’s largest asset manager, for companies to “benefit all their stakeholders” as a step in the right direction.
Click here to read the piece on The Conversation.
The Future of Business Sustainability Blog Series
We’re excited to launch a new blog series this fall! The Future of Business Sustainability blog series is an opportunity for students to share their perspective and experience related to the issues of diversity, equity, and inclusion in business sustainability. Potential themes for blog content are:
- The Background: Discuss systemic inequalities and challenges of the environmental and business sustainability fields. What is broken and how can it be fixed?
- An Immigration Story: Discuss how being an immigrant or child of immigrants aligns with or is at odds with what you’re studying today
- The Dominant Narrative: Discuss what it means to be an ally in business sustainability, both at Michigan and in the workplace
- Theories of Change: Discuss what companies are doing (or not doing) today to pursue diversity, equity and inclusion not only at the workplace but with regards to the products and services they deliver
We are also open to other ideas and perspectives! This opportunity is open to all Erb students. Each student submitting a blog will work with the Erb Marketing and Communications team, as well as an outside editor, to create the best piece of content possible. Each student will also be able to work with our SAB VP of DEI, Kathy Tian to develop ideas and reflect on experiences. If you’d like to share your story or perspective but don’t wish to have it published under your name, please let us know.