Post on 01-Jan-2016
© 2009 MIT Sloan School of Management
Strategies for Sustainable Business: Challenges and Opportunities
Prof. Sarah SlaughterMIT Sloan School of Management
World Federation of ExchangesNov. 23, 2009
© 2009 MIT Sloan School of Management
Sustainability
• Interdependent Social, Economic and Environmental Systems
• Opportunity to Transform
– Organizations
– Markets
– Communitieshttp://www.americansouthwest.net/california/photographs700/talltree.jpg
© 2009 MIT Sloan School of Management
Framework for Sustainable Business Strategies
• How do we do what we do? Sustainable Operations 31 Tannery, NJ, USA – Net Zero
Sustainable agriculture
•Where do we do what we do? Sustainable Communities
•What do we do?
Sustainable Products/Services,MarketsGreen Fuel Technologies
© 2009 MIT Sloan School of Management
Setting the Baseline and Monitoring
•What resources are we currently using?
•Normal vs peak? •Upstream processes (e.g., design, procurement) that impact sustainability?
•What is our supply chain?•Vulnerabilities?•Existing or emerging standards?
•How will we track our progress?•Predicted - and unpredicted - outcomes? •Internal vs. external reporting?
MIT Energy Map
MIT Water Map
© 2009 MIT Sloan School of Management
Sustainable Operations: Waste
• What is our waste stream?– Infrastructure and facilities (e.g., water
leaks)?– Production process inputs (e.g., offcuts)?– Production process outputs or byproducts?
• Opportunities to redirect as input into another process or system?
• End-of-life of our products?
© 2009 MIT Sloan School of Management
Example of Waste-to-Input: Kalundborg, Denmark
Source: Ecodecision, Spring 1996: 20
© 2009 MIT Sloan School of Management
Sustainable Operations: Efficiency
• How can we increase the efficiency of our resource use?– Production process
improvements?– Built facilities and infrastructure
(e.g. insulation)?– Supply chain (e.g., sourcing,
transport)?– Human resources (e.g., training,
health)?Living Buildings Challenge:Omega Center, Rhinebeck, NY
www.jetsongreen.com/2009/07/ocsl-leed-platinum-living-building.html
© 2009 MIT Sloan School of Management
Example: Efficient Data Centers
1. Identified No/low cost changes
2. Established monitoring methodology
3. Reduced electricity use by 20% in pilot project
MIT LGO Student: Jeremy Stewart, 2010
Medium and Long Term Improvements
Short Term, Low Cost Improvements
(E) Add light on/off switch
(E) Set all CRAC units’ to same
set points
($) Install egg crates in ceiling above hot aisle
and above CRACs
($$) Install lighting controls
($) Remove gaps between racks
(E) Cover empty holes with foam
(E) Insert Blanking Panels
(E) Relocate/add perforated tiles
Behavior change(E) Easy
(D) Difficult
(D) Remove trash from raised floor
(E) Use foam around cables
(temp. solution)
Requires investment($) 1-1k
($$) $1k-10k($$$) >$10k
($$) Standardize cable cut-out panels
($) Construct hood/chimney for
CRACs
(D) Strategically locate “development” racks in permanent spots within
aisles
(D) Raise temperature and RH set point
($$) Partially enclose hot and/or cold aisle
(D) Section off portion room for all tools, equipment, etc.
(D) Organize wiring in raised floor
(E) Turn off Reheat on CRAC
units
Minimal Time and Investment Required(E) Easy
(D) Difficult
Phase I Phase II
After eliminating
reheat After eliminating
reheat
After Turning Off One CRAC
Baseline Phase I Changes Complete
Phase II Changes Complete
© 2009 MIT Sloan School of Management
Sustainable Operations: New Sources
• How can we best use potential new sources (e.g, water, power, material, transport, etc.)?– Relative social, economic
environmental performance?– Availability?– Emerging policies, processes
and technologies?• Potential capture/re-use as “new
source”?GM PPA with PV
Sugarcane Bagasse for paper
© 2009 MIT Sloan School of Management
Sustainable Product or Service
• Redesign or reformulate existing product/service?– Reduce lifecycle environmental,
economic and social impacts?– Increase re-use or recycling in
natural or industrial systems?• Increase service portion?• New sustainability
products/services or markets?Green Fuel Technologies
Nike Considered Design Index
© 2009 MIT Sloan School of Management
Carbon Sequestration through Afforestation (USBCSD)
• Focus: Alluvial Land with Cottonwood/Oak Forests– Revenue: carbon sequestration credits,
hunting leases govt subsidies, timber harvests
– Opportunity cost: Revenue from crops– Economic feasibility relative to carbon
market prices• Forestry Carbon Offset Industry
– Offset aggregators – Firm-sponsored projects– CCX
© 2009 MIT Sloan School of Management
Sustainable Communities
• How can we best strengthen the community and region in which we operate?– Special need/vulnerability
matches our competency?– Potential partners to
strengthen/improve sustainability in communities?
University of Sao Paolo, Brazil E-waste Project
© 2009 MIT Sloan School of Management
Example of Sustainability in New Market: WaterHealth
• New technology – filtration with proprietary UV treatment
• New Business Model:– Provide community financing – Design/build modular units– Train local personnel to operate,
maintain• New Market
– Franchised “water stores”, replaces water trucks
http://www.waterhealth.com/
© 2009 MIT Sloan School of Management
Opportunities for Sustainable Business
• Transformation of– Organizations– Industries– Communities
• Realms of Influence– Sustainable Operations– Sustainable
Product/Service– Sustainable Communities
Aluminum – extraction vs. recovery
© 2009 MIT Sloan School of Management
Links for Additional Information
• MIT Sloan Sustainability: http://mitsloan.mit.edu/sustainability/
• Sustainable Business Lab (download project final reports and posters): http://actionlearning.mit.edu/s-lab/index.php
• MIT S-Lab (on Open Courseware): http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-992Spring-2008/CourseHome/index.htm
© 2009 MIT Sloan School of Management
Sustainability Investments
“Sustainable City Finance”, New York City, January 7, 2010 (http://www.nyas.org/Events/Detail.aspx?cid=2ecbfc47-95f7-4b9f-bcac-59cf41182e52)
World Federation of Exchanges report: “Exchanges and sustainable investment” (August 2009)