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Business & Environment

Business & Environment

    • July 2015
    • Article

    BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

    By: Uma R. Karmarkar and Bryan Bollinger

    As concerns about pollution and climate change have become more central in public discourse, shopping with reusable grocery bags has been strongly promoted as environmentally and socially conscious. In parallel, firms have joined policy makers in using a variety of initiatives to reduce the use of plastic bags. However, little is known about how these initiatives might alter consumers' in-store behavior. Using scanner panel data from a single California location of a major grocery chain, and completely controlling for consumer heterogeneity, we demonstrate that bringing your own bags simultaneously increases purchases of environmentally friendly as well as indulgent (hedonic) items. We use experimental methods to further demonstrate causality and to consider the effects of potential moderators. These findings have implications for decisions related to product pricing, placement and assortment, store layout, and the choice of strategies to increase the use of reusable bags.

    • July 2015
    • Article

    BYOB: How Bringing Your Own Shopping Bags Leads to Treating Yourself, and the Environment

    By: Uma R. Karmarkar and Bryan Bollinger

    As concerns about pollution and climate change have become more central in public discourse, shopping with reusable grocery bags has been strongly promoted as environmentally and socially conscious. In parallel, firms have joined policy makers in using a variety of initiatives to reduce the use of plastic bags. However, little is known about how...

    • Article

    Integrated Reporting and Investor Clientele

    By: George Serafeim

    In this paper, I examine the relation between Integrated Reporting (IR) and the composition of a firm's investor base. I hypothesize and find that firms that practice IR have a more long-term oriented investor base with more dedicated and fewer transient investors. This result is more pronounced for firms with high growth opportunities, not controlled by a family, operating in 'sin' industries, and exhibiting commitment to IR. I find that the results are robust to the inclusion of firm fixed effects, controls for the quantity of sustainability disclosure, and alternative ways of measuring IR. Moreover, I show that investor activism on environmental or social issues or a large number of concerns about a firm's environmental or social impact leads a firm to practice more IR and that this investor or crisis-induced IR affects the composition of a firm's investor base. Finally, firms that report more information about the different forms of capital or follow more closely the guiding principles as described in the IR Framework of the IIRC exhibit a more long-term oriented investor base.

    • Article

    Integrated Reporting and Investor Clientele

    By: George Serafeim

    In this paper, I examine the relation between Integrated Reporting (IR) and the composition of a firm's investor base. I hypothesize and find that firms that practice IR have a more long-term oriented investor base with more dedicated and fewer transient investors. This result is more pronounced for firms with high growth opportunities, not...

    • April 14, 2015
    • Article

    The Type of Socially Responsible Investments That Make Firms More Profitable

    By: George Serafeim

    • April 14, 2015
    • Article

    The Type of Socially Responsible Investments That Make Firms More Profitable

    By: George Serafeim

    • Article

    Transition to Clean Technology

    By: Daron Acemoglu, Ufuk Akcigit, Douglas Hanley and William R. Kerr

    We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation, in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several rungs to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy makes heavy use of research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policies.

    • Article

    Transition to Clean Technology

    By: Daron Acemoglu, Ufuk Akcigit, Douglas Hanley and William R. Kerr

    We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation, in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean...

    • 2015
    • Book

    Leading Sustainable Change: An Organizational Perspective

    By: Rebecca Henderson, Ranjay Gulati and Michael Tushman

    The business case for acting sustainably is becoming increasingly compelling—reducing our global footprint to sustainable levels is the defining issue of our times, and it is one that can only be addressed with the active participation of the private sector. However, persuading well-established organizations to act in new ways is never easy. This book is designed to support business leaders and organizational scholars who are grappling with this challenge by pulling together leading-edge insights from some of the world's best researchers as to how organizational change in general—and sustainable change in particular—can be most effectively managed. The book begins by laying out the economic case for change, while subsequent chapters describe how leaders at firms such as Du Pont, IBM, and Cemex have transformed their organizations, exploring issues such as the role of the senior team and the ways in which firms shift their identities, build innovative cultures and processes, and begin to change the world around them. Business leaders will find the book a source of both powerful examples and immediately actionable ideas, while scholars will be deeply intrigued by the insights that emerge from the cross cutting exploration of one of the toughest challenges our society has ever faced.

    • 2015
    • Book

    Leading Sustainable Change: An Organizational Perspective

    By: Rebecca Henderson, Ranjay Gulati and Michael Tushman

    The business case for acting sustainably is becoming increasingly compelling—reducing our global footprint to sustainable levels is the defining issue of our times, and it is one that can only be addressed with the active participation of the private sector. However, persuading well-established organizations to act in new ways is never easy. This...

    • September 2014 (Revised November 2017)
    • Case

    Sustainability at IKEA Group

    By: V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain and Jerome Lenhardt

    By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the lifestyle of its end consumers. The plan especially centered on wood, which represented 60% of IKEA Group's total procurement in volume and constituted a key lever for the company to increase its positive impact on sustainability. IKEA Group Management therefore had to decide how to manage its portfolio of wood sustainability initiatives, especially in the context of the company's aggressive growth plan.

    • September 2014 (Revised November 2017)
    • Case

    Sustainability at IKEA Group

    By: V. Kasturi Rangan, Michael W. Toffel, Vincent Dessain and Jerome Lenhardt

    By 2014, IKEA Group was the largest home furnishing company, with EUR28.5 billion of sales, and planned to reach EUR50 billion by 2020, mainly from emerging markets. At the same time, IKEA Group had adopted in 2012 a new sustainability strategy that focused the company's efforts on its entire value chain from its raw materials sourcing to the...

Initiatives & Projects

The Business & Environment Initiative and the Social Enterprise Initiative deepen business leaders’ understanding of today’s environmental challenges and assist them in developing effective solutions.
Business & Environment
Social Enterprise

The vital connection between the natural environment and the business world has long been a central focus of our research at HBS – from Richard Vietor’s study of business-government relations in U.S. energy policy in the 1980’s to Michael Porter’s new concept of the relationship between the environment and competition in the 1990’s. Today, our faculty members focus on corporate environmental strategy, operations and reporting; sustainable cities and infrastructure; the role of government and environmental policy; clean energy generation and demand-side energy efficiency; and the effective management of natural resources essential to human prosperity.

Initiatives & Projects

The Business & Environment Initiative and the Social Enterprise Initiative deepen business leaders’ understanding of today’s environmental challenges and assist them in developing effective solutions.

Business & Environment
Social Enterprise

Recent Publications

E-ledgers Carbon Accounting

By: Robert S. Kaplan and Karthik Ramanna
  • 2025 |
  • Working Paper |
  • Faculty Research
In prior publications, we introduced a global system of interconnected E-ledgers that produces—in as close to real time as practicable—accurate, comparable, and verifiable accounts of the cradle-to-gate (net) greenhouse-gas emissions in any product or service that transacts in the economy. In this paper, we delve more deeply into the accounting infrastructure required for the E-ledgers system, including the specific journal entries for recording E-liabilities and E-assets. We explain how the E-ledgers of different entities in the economy articulate with each other and how they connect with jurisdictional E-ledgers that record emissions from end consumers. These entity and jurisdictional E-ledgers can be aggregated into a geological master ledger that tracks anthropogenic GHG emissions and removals, as debits and credits, to a geological carbon equity account. We also provide summary insights from computational technology and pilot studies to guide rapid and cost-effective E-ledgers deployment at scale.
Keywords: Environmental Accounting; Digital Platforms
Citation
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Kaplan, Robert S., and Karthik Ramanna. "E-ledgers Carbon Accounting." Harvard Business School Working Paper, No. 26-004, August 2025.

Boards Can Continue to Lead the Way on Climate Governance

By: Lynn S. Paine and Suraj Srinivasan
  • August 18, 2025 |
  • Article |
  • Harvard Business Review Digital Articles
During the past year, political and investor pushback against corporate climate efforts has intensified. Nearly 320 anti-ESG bills have been introduced across U.S. state legislatures since 2021. The U.S. SEC has all but repealed its climate-related disclosure rules, and pending climate-disclosure rules are mired in litigation. Yet the underlying risks associated with climate change—from supply-chain disruption to asset impairment and shifting consumer preferences—haven’t disappeared. If anything, they are accelerating. This article builds on the authors’ 2024 HBR article How Robust Is Your Climate Governance? with updated guidance to help corporate boards navigate the shifting climate landscape and prepare for heightened scrutiny in today’s social and political context.
Keywords: Governing and Advisory Boards; Climate Change; Environmental Sustainability; Corporate Social Responsibility and Impact
Citation
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Paine, Lynn S., and Suraj Srinivasan. "Boards Can Continue to Lead the Way on Climate Governance." H08V4D. Harvard Business Review Digital Articles (August 18, 2025).

A Concise Business Guide to Climate Change: What Managers, Executives, and Students Need to Know

By: J. Gunnar Trumbull
  • 2025 |
  • Book |
  • Faculty Research
Understanding the ground rules of climate change for business.

Climate has changed the game for businesses around the world. With climate-related disasters costing billions in damages and public pressure rising, over a hundred nations joined the 2015 Paris Agreement, setting 2050 as the target for net-zero carbon emissions. Thousands of companies have registered with the Carbon Disclosure Project. In a recent survey of large, global firms, one-third reported that climate change was already affecting their operations.

Business leaders need help navigating this complex, fast-changing environment. Amid a flood of new policies and information, how can you tell what news matters and what impact it will have? Which arguments and reports are grounded in sound science and economics and which are not?

This indispensable guidebook by Harvard Business School professor and policy expert Gunnar Trumbull answers this need. As managers around the world confront the reality of climate change and educate themselves about how it is affecting their businesses, A Concise Business Guide to Climate Change provides a single, short, and accessible account of the information crucial to understanding and addressing these challenges. What causes climate change? How do countries and companies measure their own impact on global climate? What is the role of carbon markets? How are governments responding? What kind of corporate emissions targets make sense, and how can they be achieved? In crisp, reader-friendly, and data-rich chapters, Trumbull presents the basic scientific, economic, policy, and accounting frameworks that managers need in order to answer these questions.

Effective as an overview or as a reference on specific challenges, this book is your go-to business guide for dealing with climate change.
Keywords: Climate Change; Environmental Sustainability; Corporate Social Responsibility and Impact; Business or Company Management; Governing Rules, Regulations, and Reforms
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Trumbull, J. Gunnar. A Concise Business Guide to Climate Change: What Managers, Executives, and Students Need to Know. Boston, MA: Harvard Business Review Press, 2025.

Transforming a Titan (A)

By: George Serafeim and Lena Duchene
  • June 2025 |
  • Case |
  • Faculty Research
Dimitri Papalexopoulos, fourth-generation CEO of TITAN Cement, must decide whether to keep leading the 120-year-old, family-controlled firm or hand the reins to new management. Over 26 years he has turned TITAN from a domestic player into an internationally diversified group and championed an AI-driven productivity leap, even while steering the company through multiple economic crises. As TITAN prepared for its next phase of growth, Papalexopoulos faced the most consequential decision of his tenure: should he continue at the helm, promote a trusted insider, or become the first in the company’s history to recommend to the board appoint a non-family CEO?
Keywords: Digitalization; Digital; Family Firms; Succession Planning; CEO Succession; CEO Role; Decarbonization; Resilience; Innovation; Organizational Transformations; AI and Machine Learning; Digital Strategy; Digital Transformation; Family Business; Family Ownership; Climate Change; Transformation; Crisis Management; Leadership; Management Succession; Growth Management; Industrial Products Industry; Construction Industry; Greece; Europe; United States
Citation
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Serafeim, George, and Lena Duchene. "Transforming a Titan (A)." Harvard Business School Case 125-121, June 2025.

Power Struggles: Hydro-Quebec’s Energy Dilemma

By: Juan Alcacer and Danika Couture-Peck
  • June 2025 |
  • Case |
  • Faculty Research
In 2024, Maxime Aucoin, Executive Vice President and CFO of Hydro-Quebec, faced a series of compounding challenges as the utility confronted rapidly rising electricity demand, public pricing constraints, and strained stakeholder relationships. As the steward of Quebec’s state-owned utility, Aucoin was under pressure to expand capacity by 10 GW—nearly 30%—over the next decade, without compromising affordability, political mandates, or public trust. Quebec’s decarbonization goals and economic ambitions further complicated the decision-making process. Hydro-Quebec’s legacy of low-cost, renewable hydroelectric power, vertically integrated structure, and close ties with government and Indigenous communities positioned it uniquely, but also left little room for error. With aging infrastructure, unpredictable service quality, and limited public appetite for rate increases, Aucoin and his team had to consider a new mix of generation sources—including solar, wind, gas, and nuclear—and weigh each option’s cost, timeline, feasibility, and social acceptability. At stake was Hydro-Quebec’s ability to maintain its mission while navigating a radically shifting energy and political landscape. The case raises urgent questions about trade-offs in public utility strategy, stakeholder alignment, and long-term energy planning.
Keywords: Renewable Energy; Infrastructure; State Ownership; Vertical Integration; Energy; Energy Industry; Canada
Citation
Educators
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Alcacer, Juan, and Danika Couture-Peck. "Power Struggles: Hydro-Quebec’s Energy Dilemma." Harvard Business School Case 725-468, June 2025.

Vail Resorts: Responding to Activist Pressure (A)

By: Benjamin C. Esty and Edward A. Meyer
  • June 2025 |
  • Case |
  • Faculty Research
On January 27, 2025, the head of a relatively small hedge fund named Late Apex Partners sent a highly critical letter to the board of directors of Vail Resorts, the world’s largest ski resort operator. In his letter, and the 88-slide presentation that accompanied his letter, the activist investor criticized the firm’s strategy, leadership, and financial performance. In fact, he was calling for fundamental change: replacing the CEO, CFO, and board chair; changing the firm’s capital allocation strategy; and focusing more attention on customers and employees to fix the company’s damaged reputation. On the day the letter became public, Vail’s stock price jumped 6%, representing an increase in almost $350 million of market value. With the stock price down more than 50% in the past few years, Vail’s relatively new CEO (Kirsten Lynch) and the board chairman (Rob Katz, the former CEO), had to decide whether to respond to the letter and, if so, how. What made this decision difficult was that several relatively small and unknown activist investors had won important victories against large corporations in recent years. Examples of this kind of “David vs. Goliath” battle included BlueBell Capital successfully removing Danone’s CEO in March 2021 and Engine No. 1 winning three board seats at ExxonMobil in May 2021.
Keywords: Corporate Finance; Capital Budgeting; Corporate Governance; Competitive Advantage; Competitive Strategy; Leading Change; Valuation; Investment Activism; Climate Change; Management Succession; Financial Management; Risk Management; Business and Shareholder Relations; Sports Industry; Entertainment and Recreation Industry; Travel Industry; United States; Australia; Canada
Citation
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Esty, Benjamin C., and Edward A. Meyer. "Vail Resorts: Responding to Activist Pressure (A)." Harvard Business School Case 225-082, June 2025.

Are ESG Improvements Recognized? Perspectives from the Public Sentiments

By: Shaolong Wu
  • Summer 2025 |
  • Article |
  • Journal of Impact and ESG Investing
While Environment, Social, and Governance (ESG) increasingly guides investment management and corporate agendas nowadays, public reactions to firms' ESG performance remain under-studied. This paper fills this gap by investigating whether the public picks up firms' ESG performance changes timely and, if not, how long it takes. I propose new proxies that quantitatively measure the public's attention and sentiments regarding companies' ESG performance changes. I construct a quarterly panel combining Environment, Society, and Governance metrics and public sentiments from S&P 500 companies on X (formerly Twitter) from 2010 to 2021. I find empirical evidence that public sentiments lag significantly by one to two quarters. Using a two-period theoretical model of an ESG-aware investor, I highlight biases retail investors should caution against and provide insights into how public perception influences portfolio management. I conclude by discussing the need to align public, investor, and policymaker perceptions with actual ESG performance, which can prompt timely recognition of firms' ESG improvements and motivate better long-term commitments.
Keywords: Corporate Social Responsibility and Impact; Public Opinion; Environmental Sustainability; Corporate Governance; Investment
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Wu, Shaolong. "Are ESG Improvements Recognized? Perspectives from the Public Sentiments." Journal of Impact and ESG Investing 5, no. 4 (Summer 2025): 24–51.

An Empirical Examination of Business Climate Alliances: Effective and/or Harmful?

By: Matteo Gasparini and Peter Tufano
  • 2025 |
  • Working Paper |
  • Faculty Research
This research studies business alliances that seek to address climate change, offering empirical evidence to address claims advanced by alliance supporters and critics. We study eleven major alliances mostly focused on financial services firms and 424 major publicly-traded financial institutions—some of which joined these alliances. We use diff-in-diff and other approaches to identify the effects of alliance membership and to study "booster," network, and peer effects. Financial service firms that join climate alliances show increased adoption of climate-aligned management practices; greater adoption of emissions targets; reductions of own-emissions; mixed evidence of increased funding for green projects; and greater pro-climate lobbying. We find no evidence of traditional antitrust violations in the form of pricing power or market concentration; no reduction in funding to oil and gas companies; and no lower risk-adjusted shareholder returns than non-alliance members. We find that participation in multiple alliances ("booster effects") is correlated with adoption of practices, emission targets, emissions reductions, and pro-climate lobbying—albeit with diminishing returns; and we find some evidence of network and peer effects.
Keywords: Antitrust; Climate Change; Financial Institutions; Competition; Network Effects; Alliances
Citation
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Gasparini, Matteo, and Peter Tufano. "An Empirical Examination of Business Climate Alliances: Effective and/or Harmful?" Harvard Business School Working Paper, No. 25-060, May 2025.

'Net Zero in Action': Impact Investing at the McKnight Foundation

By: Lauren Cohen, Christina R. Wing and Sophia Pan
  • May 2025 |
  • Case |
  • Faculty Research
Elizabeth McGeveran, Vice President of Investments at the McKnight Foundation, reflected on how to effectively advance the organization’s net-zero strategy. The foundation had committed 10% of its endowment to building a portfolio of impact investments and was among the first family foundations to embrace ESG investing—despite the limited availability of robust metrics. McKnight recognized that sustainable investing did not equate to sacrificing returns; in fact, the foundation had already demonstrated its ability to generate competitive performance. Still, leadership acknowledged that some growing pains and short-term deviation from traditional benchmarks were inevitable. The question now was: how could they continue to succeed in their ESG strategy—and, more importantly, position themselves as a market signal, setting higher expectations for fund managers on environmental and social governance?
Keywords: Foundation; Impact Investing; ESG; Family Business; Forecasting and Prediction; Private Sector; Renewable Energy; Social Entrepreneurship; Climate Change; Environmental Sustainability; Green Technology; Financial Strategy; Investment Funds; Investment Portfolio; Institutional Investing; Corporate Accountability; Corporate Social Responsibility and Impact; Mission and Purpose; Private Ownership; Philanthropy and Charitable Giving; Social Issues; Sustainable Cities; Financial Services Industry; Minnesota; United States
Citation
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Cohen, Lauren, Christina R. Wing, and Sophia Pan. "'Net Zero in Action': Impact Investing at the McKnight Foundation." Harvard Business School Case 225-095, May 2025.

Sustainability as a Business-Model Transformation

By: Ivanka Visnjic, Felipe Monteiro and Michael L. Tushman
  • May–June 2025 |
  • Article |
  • Harvard Business Review
Many global companies have made public commitments to sustainability targets. Fulfilling these commitments will require firms to transform their business models and organizational architectures. A few pioneers are leading the way, demonstrating that companies can make sustainability not only a goal but also the driver of their business model. They are leveraging what they’ve learned from developing innovation capabilities to help them on their sustainability journey. This article identifies three fundamental tensions that companies must address. First, they need to maintain a long-term sustainability vision while delivering on short-term financial targets. Second, they must introduce systemwide change while keeping their employees engaged at the local level. And third, they have to be open to external collaboration while maintaining strong internal integration. Drawing on real-world examples such as the Italian energy group Enel and Swiss cement giant Holcim Group, the authors describe the practices companies can use to face each challenge with intention.
Keywords: Environmental Sustainability; Business Model
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Visnjic, Ivanka, Felipe Monteiro, and Michael L. Tushman. "Sustainability as a Business-Model Transformation." Harvard Business Review 103, no. 3 (May–June 2025): 80–89.
More Publications

Faculty

George Serafeim
Michael W. Toffel
Forest L. Reinhardt
Richard H.K. Vietor
Robert S. Kaplan
Joseph B. Lassiter
Lynn S. Paine
Geoffrey G. Jones
James K. Sebenius
Rosabeth M. Kanter
David E. Bell
Max H. Bazerman
→See All

HBS Working Knowlege

    • 18 Jun 2024

    How Natural Winemaker Frank Cornelissen Innovated While Staying True to His Brand

    Re: Tiona W. Zuzul
    • 15 Nov 2018

    Can the Global Food Industry Overcome Public Distrust?

    Re: Ray A. Goldberg
    • 17 Oct 2016

    Business Solutions That Help Cut Food Waste

    by Dina Gerdeman
→More Articles

Harvard Business Publishing

    • August 18, 2025
    • Article

    Boards Can Continue to Lead the Way on Climate Governance

    By: Lynn S. Paine and Suraj Srinivasan
    • June 2025
    • Case

    Vail Resorts: Responding to Activist Pressure (A)

    By: Benjamin C. Esty and Edward A. Meyer
    • 2025
    • Book

    A Concise Business Guide to Climate Change: What Managers, Executives, and Students Need to Know

    By: J. Gunnar Trumbull
→More Harvard Business Publishing
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