Recently, I announced to the Darden community a strategic initiative on environmental sustainability. Our initiative has two goals: by 2020, the Darden Enterprise will achieve carbon and waste neutrality; and by 2013, Darden will rank among the b-school thought leaders on sustainability. The goals address how we live and how we learn about business and the environment—they are ambitious in the time-frame expressed. But our assessment of the urgency and the opportunity to serve the business profession compels us to set these targets. Darden’s leadership team thinks that now is the time and that Darden is the place for these goals.
The growth of my own support for this initiative mirrors the development of thinking among many of my colleagues at Darden. Given the sharp debates about the environment, one does not enter this area lightly. I would encourage any of the readers of this blog to consider a path similar to mine:
**Look. I enjoy the natural world immensely—hiking, camping, canoeing, and biking. Seven years ago, I paddled the length of the James River (301 miles) with my son. I travel extensively. Often I see evidence of degradation of the environment. In some places this evidence results from practices of the past, rather than the present. But I wonder how we can leave a world for our children that is better than the one we presently inhabit.
**Study and reflect. One doesn’t have to be an expert in the natural sciences to note the growing consensus among scientists about climate change and other forms of degradation. Books ranging from Al Gore to Bjorn Lomborg ((For a sampling of the range of views about environmental practices and policies, see these two books: Al Gore An Inconvenient Truth, and Bjorn Lomborg, The Skeptical Environmentalist. To gain a sense of the passion and anger on all sides of environmentalism, you should read the readers’ reviews at amazon.com. )) take environmental decline as a basic assumption; they part company on what to do about it. Various writers are downright alarming; some are openly hostile about the role of business and free markets in becoming part of the solution. A recent book by Gus Speth, Dean of Yale’s School of Forestry and Environmental Studies, blames environmental change on capitalism—to anyone who loves entrepreneurship, business innovation, and free markets, such a charge seems extreme. We see leading companies engaged in strategic shifts to their product mix and their operations, in recognition of changes in the environment. Batten Fellow Joel Makower writes in his popular blog that:
“Green leaders are emerging throughout companies, not just in the environmental departments, as forward-thinking entrepreneurs (and intrapreneurs) identify and exploit new ways to leverage green thinking into new products and markets. As the number of success stories moves beyond hybrid automobiles and organic foods to include other categories products and services, green will be seen as a more “normal” part of the marketplace.”
**Listen. Hear what business executives, consumers, and investors are saying about business and the environment. Clearly the best-practice corporations expect Darden to master sustainability—I found this in conversations with our leading MBA recruiters and our top executive education clients. A study by McKinsey at the end of 2007 found that executives consider environmental issues likely to have the highest impact on shareholder value over the next five years. Jeffrey Immelt of General Electric spoke to our community in 2006 and offered a strong expression of commitment to the environment. One of the most frequent questions in my meetings with alumni regards business and the environment and what Darden is doing. And within Darden, casual conversations and meetings raise the environment often. Darden students also recently produced a week of discussions by business leaders from leading companies, including GE, Cargill and Duke Energy, who each talked about how the context of environmental challenges is shaping exciting innovation within their institutions.
**Try. If you really want to understand the range of environmental problems and solutions, you should experiment. Install some compact fluorescent lights in your home. Use a ceramic cup for your morning coffee instead of throw-away paper or plastic. Walk more, drive less.
By looking, listening, studying, and trying, my colleagues and I grew to believe that Darden should engage more energetically with the environment. The hearts of business professionals should be in this. Businesses and business schools need to find the intersection between economic growth and environmental sustainability. Growth brings higher standards of living for everyone, especially the world’s poor, benefits such as better clothing, housing, medical care, education, and elevation of the status of women. The challenge of balancing growth and sustainability can inspire a great deal of innovation.
Some business school students are, early in their careers, at the source of this innovation, creating business plans for companies that address environmental challenges. This week a team led by Darden students Manoj Sinha and Chip Ransler won first prize in the University of Texas at Austin RGK Center Social Innovation Competition for their company Husk Power Systems, which provides power to rural Indians by converting rice husks into electricity. These students are in Darden’s small business incubator.
We should find means of harnessing the dynamism of capitalism and free markets in the service of environmental sustainability. It is said that business executives are indifferent, consumers seem disinclined to pay more for environmentally-friendly products; and investors are disinclined to accept a lower rate of return for the sake of the environment. In other words, government will have to have to intervene heavily into markets and the behavior of individuals to stabilize and/or remediate the environment.
I don’t know about that. Markets and individuals are highly inventive and adaptive. Thoughtful people on the topic recognize that business and the power of markets will have to be part of the solution. Our environmental challenges open up opportunities for innovative and entrepreneurial leadership from the business sector that has the potential to create value for both individual businesses and society. I think this is what makes it such an interesting time to be studying these issues. The role for business schools should be to identify best practices of invention and implementation of new products and practices. I am cautiously optimistic that there is a sizable intersection and that research can and should find a way. I, like my colleagues, bring a natural skepticism to new causes. Our role in society is to think critically and speak the truth. Thus, it is unlikely that any academic community will forge complete unanimity on issues about the environment. The world needs more research on best practices and more teaching. The science is leaning very consistently toward evidence of adverse impact on the environment. Business plays an important role in this impact. A leading business school should make an original contribution to this need and should help to disseminate best practices. Here is where Darden can make a difference.
A strategic “initiative” declares our intent to grow in a particular direction. In recent years, Darden’s leadership team has declared initiatives in the areas of globalization, research, and diversity. An initiative should meet several tests. From the start, it should be consistent with Darden’s mission. It should offer some substantial benefit to our constituencies—especially to the profession we serve—and to society. Fulfilling the aims of the initiative should be at least plausible, based on the capabilities we have (or can reasonably develop)—this is a criterion of probable impact (good generals choose their battles carefully). Successful execution of the initiative should boost the strategic positioning of the school. And finally, the initiative should have strong champions within the community: students, faculty staff, alumni, trustees, and the University—nothing important ever happens without leadership.
Our initiative on environmental sustainability easily meets all of these tests. In my three years as Dean, I have seen rising interest and commitment by students, faculty, and staff—I challenged these people to form a working committee, to draft a vision and mission for Darden, to suggest near- and longer-term “wins,” and to offer a plan. The working committee responded with enthusiasm and patience, and with a strategy for the School. The strategy points out that sustainability complements well Darden’s special strengths in strategy, innovation, ethics, and virtually all functional fields—I grew more persuaded that we can do this.
Darden faculty members as diverse as Dick Brownlee, Andrea Larson, Elizabeth Teisberg, Sherwood Frey, and Ed Freeman have carried elements of sustainability in their research and teaching. Some have focused their research on sustainability as a key driver of strategy and innovation. Professor Michael Lenox will join our faculty this summer; his expertise is in strategy, innovation, and sustainability. He will become the Executive Director of our Batten Institute, following Jeanne Liedtka’s distinguished service in that role. We are energized by Mike’s vision. Coincidentally, we hired Erika Herz to serve as Darden’s Director of Sustainability Programs—a Darden graduate, she returns to us from United Technologies Corporation where she worked on sustainability programs. Listen to Erika’s recent podcast. All of these colleagues bring significant expertise and thought leadership in sustainability. We discussed this among the Associate Deans and the Leadership Team of the school: they offered their support. The University has some high-profile sustainability efforts in play—I reached out for counsel to other senior leaders in the University and found strong support, especially from Provost Tim Garson and Dean of the Architecture School, Karen Van Lengen.
In short, my decision to lend my support to this initiative was easy. This initiative declares our strategic resolve as a community. I hope and believe that at some point long in the future, this initiative will constitute one of the important positive turning points in the history of the school. We did not come to this point lightly and we see great opportunity.
We can do this. I invite you to consider what actions you can take and to engage with the Darden community as we challenge our enterprise in this area, executing on our mission to be leaders in the world of practical affairs.