© 2009 MIT Sloan School of Management Strategies for Sustainable Business: Challenges and Opportunities Prof. Sarah Slaughter MIT Sloan School of Management

© 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


Sustainability

• Interdependent Social, Economic and Environmental Systems

• Opportunity to Transform

– Organizations

– Markets

– Communitieshttp://www.americansouthwest.net/california/photographs700/talltree.jpg


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


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


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?


Example of Waste-to-Input: Kalundborg, Denmark

Source: Ecodecision, Spring 1996: 20


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


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


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


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


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


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


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/


Opportunities for Sustainable Business

• Transformation of– Organizations– Industries– Communities

• Realms of Influence– Sustainable Operations– Sustainable

Product/Service– Sustainable Communities

Aluminum – extraction vs. recovery


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


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)

Documents

© 2009 MIT Sloan School of Management Strategies for Sustainable Business: Challenges and Opportunities Prof. Sarah Slaughter MIT Sloan School of Management