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Scott Canonico, HP, provided an introduction to how life-cycle analysis has helped HP reduce packaging and save money in key product areas, and an overview of how life-cycle analysis tools can contribute to corporate sustainability strategies.
Thomas Lyon, Director of Erb Institute for Global Sustainable Enterprise, University of Michigan. Presentation of results of a study on markets in which consumers prefer environmentally friendly products but cannot determine the environmental quality of any given firm’s product on their own. A non-governmental organization (NGO) can establish a voluntary standard and label the products of firms whose products comply with the standard. Alternatively, industry can create its own standard and label. We compare the stringency of these two labels, and analyze how they interact.
Ann Carney Nelson, Chief Operating Officer of Inpria, a "green chemistry" materials company. Discussion of business strategy for an early-stage company, with particular emphasis on accessing early resources and how to align those efforts with key strategic decisions. Key lessons on securing financing for new businesses in emerging, green business sectors.
Designed to bring together leading Oregon businesses and service organizations in order to forge deeper collaborative relationships between the University and business community, the 2010 Leadership focused on two major University initiatives: The Green Product Design Network and Sustainable Cities Initiative.
The event, attended by 125 representatives, has established a platform for collaboration in several key program activities, based on a stronger common understanding of emerging issues and opportunities related to sustainability in Oregon.
Emergent topics that resulted from this conference:
Composting policy summit - to identify pathways toward improved and increased recovery of organic waste
Green Product design support & supply chain analysis - to support several Oregon companies in the activewear and outdoor apparel sectors, working together to develop and test the Eco-Index
Joshua Proudfoot, principal of Good Company, presented students with information about how to build a successful small consulting firm that targets sustainability-related program consulting. Key areas of focus relate to business development challenges and working in partnership with clients to secure funding for innovative projects, staff training and development to ensure leading-edge capabilities, and how to differentiate services from competitors.
Gardner Campbell, director, Academy for Teaching and Learning at Baylor University, presented information about opportunities for greater social inclusion and equity through effective use of tools designed for digital networks.
Jules Bailey, principal of Pareto Global, provided an intensive introduction to clean energy economics and finance, with a focus on emerging market opportunities, key policy and institutional drivers, structural shifts in capital investment markets, and overall opportunity for Oregon’s economy.
Mark Buckley, Vice President for Environmental Affairs, Staples, presented detailed information on improved corporate performance and the associated environmental and social benefits that result from Staples’ efforts in sustainable supply chain management, with specific emphasis on forest products.
Regina Hauser, Executive Director of The Natural Step Network, introduced students to the principles, framework and tools of The Natural Step, and provided tangible case studies of how innovative businesses have improved their performance and enhanced relationships with customers and business partners.
Tim Kraft, PhD Candidate
Stanford University
Abstract
As public awareness of environmental hazards increases, a growing concern for corporations is the potential negative environmental impact of their products and the chemicals those products contain. When a substance within a product is identified as potentially hazardous (e.g., bisphenol-A (BPA) in baby bottles and triclosan in soaps and toothpastes), without regulations in place it is often difficult for a firm to financially justify the proactive replacement of the substance. From the perspective of non-governmental organizations (NGOs), groups such as ChemSec play an active role in removing potentially hazardous substances from commercial use by either targeting firms with negative press or by petitioning regulatory bodies to increase the likelihood of regulation. An NGO interested in influencing firms to replace a potentially hazardous substance must develop a strategy for how to best utilize its often limited resources.
A firm’s decisions are complicated by uncertainty in substance risk, regulations, and market sensitivity, as well as the existence of external stakeholders such as NGOs who may want the firm to develop a replacement substance. We investigate the timing and intensity of the firm’s investments to replace a substance. A two-stage dynamic program is used to model the problem. Our results indicate that large firms, in particular, must dedicate resources to monitoring and potentially planning the replacement of a substance. Although the additional management will be costly, it may prevent even larger losses such as inventory write-offs, profit losses, or liability costs. In the second part of the talk, we investigate the role NGOs play in removing a potentially hazardous substance from commercial use. We analyze the NGO’s decisions of who to target – the industry or the regulatory body – and how much effort to exert. In addition, we further investigate whether NGOs should take a pragmatic approach and partner with firms or maintain an antagonistic relationship. A game-theoretic, two-stage model is used to model the problem. Our results indicate that pressuring the regulatory body is most effective when the existing likelihood of regulation is low and the expected penalty for not being prepared for regulation is high. (Joint works with Feryal Erhun, Robert Carlson, and Dariush Rafinejad; Yanchong Zheng and Feryal Erhun)
Van Jones, human rights pioneer; author of The Green-Collar Economy; served as green jobs advisor for the Obama administration in 2009. The economy has shifted and emerging business opportunities that are centered on repairing urban environmental damage or improving environmental performance, can contribute to our economic recovery and help solve persistent problems of economic inclusion and justice.
Ravi Subramanian, Assistant Professor
Georgia Institute of Technology
Visit, Friday, February 4, 2011
Abstract
Firms often determine whether or not to make components common across products by focusing on the manufacturing and sales of new products only. However, component commonality decisions that ignore remanufacturing can adversely affect the profitability of the firm. In this paper, we analyze how remanufacturing – by either the OEM or a third party – could reverse the OEM’s commonality decision that is based on the manufacturing and sales of new products alone. Specifically, we determine conditions under which the OEM’s optimal decision on commonality may be reversed and illustrate how her profit can be higher if remanufacturing is taken into account ex ante. We also compare the likelihood of commonality decision reversals and associated profit impacts between the OEM and third party remanufacturing scenarios.
Ann Carney Nelson, Chief Operating Officer of Inpria, a "green chemistry" materials company. Discussion of business strategy for an early-stage company, with particular emphasis on accessing early resources and how to align those efforts with key strategic decisions. Key lessons on securing financing for new businesses in emerging, green business sectors.
For 14 years, students at the University of Oregon have organized and delivered a sustainable business conference, which has evolved into its current format, jointly delivered by MBA and Law students through the Green Business Initiative.
Each year, the event features, nationally-renowned experts in focused, in-depth panel discussions. These sessions are designed to deepen students' exposure to and understanding of the fundamental and timely issues related to sustainability and the business sector.
Attendance at each event ranges from 150 to 200 people.
Justin Yuen, CEO of fmyi (fmyi.com), provided an introduction to social networking that focused explicitly on sustainability performance, including information about how to use existing social media platforms to engage key stakeholders such as employees, shareholders, customers and suppliers.
Geoff Ashton, Calvert Investments, presented data illustrating the growth in and performance of green investing over the past decade, highlighting driving forces and key questions that will affect investment decisions in the coming decade, as awareness of sustainability issues increases and investors continue to segment their investing strategies.
Beril Toktay, Associate Professor
Georgia Institute of Technology
Abstract
Secondary markets in the Information Technology (IT) industry, where used or refurbished equipment is traded, have been growing steadily. For Original Equipment Manufacturers (OEMs) in this industry, the importance of secondary markets has grown in parallel, not only as a source of revenue, but also because of their impact on these firms' competitive advantage and market strategy. Recent articles in the press have severely criticized some OEMs who are perceived to be actively trying to eliminate the secondary market for their products. Others have policies that enhance their secondary markets. The goal of this paper is to understand how an OEM's incentives and optimal strategies vis-a-vis the secondary market are shaped contingent on her relative competitive advantage, product characteristics and consumer preferences. The critical tradeoff that we examine is whether the indirect benefit from maintaining an active secondary market (the resale value effect) can outweigh the potentially negative effect of the sales of used products at the expense of new product sales (the cannibalization effect). To that end, we develop a model where the OEM can directly affect the resale value of her product through a relicensing fee charged to the buyer of the refurbished equipment. Moreover, we introduce a measure of the consumers' willingness to return their used products to account for the fact that the higher the price offered by a third-party entrant, the higher the ratio of returned products at their end-of-use. We analyze the OEM's strategy in both the monopoly and the duopoly cases, characterize the optimal relicensing fee set by the OEM, and draw conclusions on the conditions that favor stimulating or deterring the secondary market.
Feryal Erhun, Assistant Professor in the Department of Management Science and Engineering
Stanford University
Abstract
As public awareness of environmental hazards increases, a growing concern for corporations is the potential negative environmental impact of their products and the chemicals those products contain. We analyze the optimal decisions of firms and stakeholders when a substance within a product is identified as potentially hazardous. We model the following problem: a firm sells a product containing a substance that is potentially hazardous. Although the substance is not regulated, the firm believes regulation may occur in the future. Hence, it must devise a strategy in terms of timing and intensity of investments for the development and the implementation of a replacement substance. In an environment where replacement costs are expected to be millions of dollars, regulations are uncertain, and both consumer and non-governmental organization (NGO) pressures exist, a carefully developed plan that balances costs and risks is critical for a firm. Our results indicate, from the firm's perspective, that larger firms should plan their replacement decisions carefully to avoid unnecessary development and implementation costs, while smaller firms should invest aggressively to establish a niche position within the market. From the external stakeholder's perspective, NGOs and regulatory bodies should take a pragmatic approach when pressuring firms to develop a replacement substance, applying pressure only when consumer awareness and the existing threat of regulation are low. (Joint work with Tim Kraft, Robert Carlson, and Dariush Rafinejad)
James E. McWilliams, History, Texas State University, San Marcos, presented key directions in the rapidly evolving food industry that will have benefits from economic, environmental and social equity perspectives, including better resilience, opportunities for new businesses, better health, stronger rural-urban ties in agricultural communities.
Eric J. Beckman, George M. Bevier Professor of Engineering &
Co-Director, Mascaro Sustainability Initiative, presented to an interdisciplinary set of students about how green design has, over the past decade, become very much a part of the toolkit for those creating the next generation of products and services. This has become the case for those of us who work at the molecular level (chemists) as well as those who operate at length scales of meters (architects). At the same time, today’s green designers face some substantial challenges if we want to continue, or even enhance, the pace at which green design advances. For example, while much attention is focused on green material design, it is often the additive package to materials (e.g., flame retardants, plasticizers, preservatives) rather than the material itself that causes environmental issues. Additives are produced, by and large, outside the US, and additive design is not considered a terribly glamorous field, meaning that progress to date has been slow. Moving to longer length scales, while improvements in new home construction have allowed for dramatic drops in energy usage, the means by which the energy load of existing homes is reduced have not changed measurably in decades, despite the fact that these existing homes (and commercial buildings) consume a sizable fraction of our nation’s electricity. This talk presents a number of pressing issues for today’s students of green design, showing how collaborations between disparate disciplines will be needed to make significant breakthroughs.
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