On Friday, September 20, 2019, MBA students from UVM’s Sustainable Innovation MBA Class of 2020 joined forces with youth activists, students, and workers around the world to demand a just future free from fossil fuels. These global strikes are happening before the UN Climate Action Summit next week – our goal is to put pressure not just on politicians, but people from all generations. Climate change is a moral issue, it’s happening now, and we have an opportunity to take action.
Students from the Class of 2020 at the Burlington, VT Climate Strike on September 20, 2019.
Google, Microsoft, Facebook, and Amazon will all be participating in strikes across the country. Locally in Burlington, SI-MBA students followed in the footsteps of Burton Snowboards, Ben & Jerry’s, Seventh Generation, and environmentally focused non-profits such as 350 Burlington, VPIRG, Climate Disobedience Center, and Sunrise Movement.
Students from the Class of 2020 at the Burlington, VT Climate Strike on September 20, 2019.
We as the Sustainable-Innovation MBA Class of 2020 have also teamed up with some inspiring alumni to march for climate justice! I talked with Brodie O’Brien ’14 and now Digital Marketing Manager at Ben & Jerry’s.
“Here at Ben & Jerry’s, we see our opportunity as
providing people with an onramp first-step into engaging in large-scale issues
that may feel insurmountable. Climate change is a big, scary topic that’s too
big for one person to address alone: we think that the power of collective
action can change the system. That’s why we’re here at the Burlington Climate
Strike scooping today – we want to celebrate our fans who are already involved
with Climate Action, and provide a fun way for new people to get excited about
creating real collective positive change.” Brodie also noted that “we use our
digital channels to raise awareness of movements amongst fans, it goes beyond
just showing up physically at events.”
Brodie O’Brien ’15 (right), Digital Marketing Manager at Ben & Jerry’s
Climate change is truly a world crisis: we have an
obligation to create sustainable business solutions that meet the needs of the
present without compromising the ability of future generations to meet their
own needs.
We found this story of a beekeeper and his wonderful attitude toward turning a big problem into an innovation — and a business advantage — just delightful. How can you think differently about problems, and opportunities, as foundations of innovation?
EDITOR’S NOTE: As part of Orientation Week, the Class of 2020 visited iconic, mission-driven companies here in Vermont for conversations about sustainability, innovation, and Business 2.0 with executives. We asked Albert Kittell ’20 about his take-away from a visit to Ben & Jerry’s headquarters.
Albert Kittell ’20
“After visiting Ben & Jerry’s South Burlington offices it became very clear to me, a native Burlingtonian, that the scope of the company’s influence was much greater than I realized. Ben & Jerry’s, since middle of the 1980s, have put in place innovative and lasting initiatives that often were the first, or among the first, in the world. These included “Shared Prosperity,” social, and economic equality, and environmental issues. If an ice cream company can do all of that, then any business headed by similar type thinkers can help strike change in industry.”
Impact investing is the hottest
trend in finance right now with now over $12
trillion in assets invested. Over the course of the last year I have spent
a significant amount of time studying the industry, including being on the winning
team of the Wharton Total Impact Portfolio Challenge (TIPC). Throughout the
year, I have looked for the best ways to generate impact through public market
investments and below is summary of my conclusions.
Invest in Companies with Embedded Sustainability Practices
In the TIPC my team encountered the question, how do you pick the best ESG (Environmental, Social, Governance) or SRI (Socially Responsible Investing) fund to invest in? In our corporate social responsibility course, we learned that the companies with the most successful sustainability efforts are those that embed these sustainability practices into their core business practices. To maximize the collective impact of a public equity investment, you should invest in funds that hold companies that are embedding sustainability into their core business practices.
To determine how well a company is
embedding sustainability we used a framework developed by the Sustainable
Accounting Standards Board (SASB) to determine what the most material
sustainability issues are for the companies being held by a fund. If a company
wants to embed sustainability into their core business, then they must perform
well on the sustainability issues that are most material to their industry.
Based on a scoring system we developed, we were able to quantify this
embeddedness for public equity funds.
Balance Long-Term and Short-Term Needs
Public market impact investments
are focused on the long-term collective changes that need to happen to create a
more sustainable world. It is extremely important that these investments
continue to occur. However, while we invest for the long-term, we cannot
overlook the people who are suffering right now. It is great to invest in
companies that are creating cheap renewable energy, but that does not immediately
help the family that cannot pay their heating bill during these cold Vermont
winters. Investors need to harness the financial power that is generated
through their long-term investments to help address the short-term needs that are
so often overlooked.
The most efficient way to create
the direct impacts needed to address these short-term problems is through
charitable donations. I know! Charity is a dirty word in finance, especially in
impact investing. It certainly has its flaws, but it is the most direct way to
balance long-term and short-term needs.
Behavioral economics will suggest
that those that invest responsibly will be more likely to suffer from the
effects of moral self-licensing, which in turn makes them less likely to donate
to charity. I propose that those that participate in SRI or ESG investing,
allocate a portion of the dividends they receive through these investments to
charitable causes that support short-term needs. Typically, dividends will automatically
be reinvested back into shares of the fund that distributed them, so this money
never enters the metal accounts of an investor. Thus, allocating a portion of
their dividends to charity will have no effect on a person’s mental accounting
and eliminate any moral self-licensing effects of responsible investing.
In summary, the best way to create
impact through a public market investment is to balance the long-term changes
needed, by investing in companies that embed sustainability into their core
business practices, with the short-term needs of today, by allocating a portion
of a portfolio or fund’s dividends to charity.
As corporations
have begun to understand the necessity of embedding sustainability into their
core strategy and competencies it has become apparent that holistic management of
operations must be done in an intentional and transparent way. It’s
increasingly clear that all aspects of an organization – from product design, operations,
marketing, HR & more – must collaborate transparently to effectively manage
a sustainable enterprise and realize ROI from their initiatives. Companies can
promote growth, reduce risk and increase returns though processes that provide
clear, concise and trusted information across all departments.
There is no doubt that a robust technological management system is the backbone for implementing a holistic sustainability management program – a system which allows for transparency and trust across all departments. Many organizations are positioned to take advantage of cutting-edge technological systems to give them a sustainable competitive advantage – as long as there is a strong aligned company culture.
Enter Blockchain. Often when Blockchain is mentioned a reaction is one of eyes glazing over, a chuckle and some skepticism due to the mysterious, undoubtably complex connotations that surround this technology. This is understandable. Yet, the reality is that the concept of blockchain is relatively simple. Instead of a central authority verifying a transaction or data set, the verification is distributed and decentralized across a network. The verifications are on a ledger (think accounting), where changes and additions are append only – you can’t go back and change it. Therefore, the transactions become transparent, immutable and tamper proof. Implemented correctly, the potential applications spanning public and private sectors are almost categorically endless.
Has this created a hype bubble around blockchain? Undoubtably, yes. However, as the technology progresses and use cases and applications evolve, the hype around blockchain seems to be looking less like a bubble and more like a paradigm shift. With the possibility to make blockchains customizable – private, permissioned or public – companies can choose from an ever-growing panacea of platforms that can meet their needs. Additionally, companies must approach blockchain by first understanding the problem – then assessing why blockchain could be an effective solution. Just like any technology, blockchain is not a silver bullet solution. It must be asked – “Can this be solved by a traditional database, and does the need for transparency, decentralization, trust and immutability warrant a blockchain solution?”
While blockchain can incentivize effective management through transparency of operations, it is also essential that it be complimented by continuing to invest in human capital – the culture – of the company. Transparency can create accountability, competition and innovation – but the technology itself must not be the crutch. The culture and the affective commitment of the people in the organization will always be at the heart of a profitable, sustainable organization. While technology can be a powerful tool to implement solutions, the investment in human capital cannot be lost.
New technologies
hold vast potential to disrupt and improve business and society – but without a
mutually inclusive investment in culture any initiative will not reach its
potential or may even cause inverse, negative externalities. When culture and
values are complemented with decentralized, transparent technologies such blockchain,
the future of managing successful sustainable enterprises holds immense
potential.
EDITOR’S NOTE: The Sustainable Innovation MBA Class of 2019 was celebrated at their program-end Inauguration ceremony on August 17, 2019 at the Royall Tyler Theater on the campus of the University of Vermont. Julie Keck ’19 was chosen by her cohort to deliver the Class Speaker address. The text of her remarks is below.
Before I get started, it’s important to point out that this event is taking place on traditional Abenaki and Wabanaki land, and it is a privilege to have been educated on – and to now graduate within – the land that they have stewarded.
Julie Keck
I have the honor of speaking to you today because my peers voted for me. I suspect those who clicked on my name either thought I would say something funny, say something touching, or politely ‘stick it to the man.’ Those hoping for any of these three things will be satisfied.
If you have gone through this Sustainable Innovation MBA program at the University of Vermont – or if you love us, teach us, or support us in any way – you’ll know that we completed many, many, many presentations in this program. While public speaking can be stressful for some, it was no secret in our classroom that I love a good microphone. For me, the only problem was that I had to share my presentation time with my lovely classmates.
But now – finally – the microphone’s all mine. And I Have Some Things to Say.
But first more about me: when I was little, and I was super cute when I was little, my dad would sometimes ask me a question, and I’d respond with: “Let me sing you about it.” Those who’ve come to live-band karaoke with me at Sweet Melissa’s over the past year will be relieved to know I’m not actually going to do that.
Another response I sometimes had to questions was: “I can’t know that yet.”
I like that better than “I don’t know,” don’t you? It conveys that one might not *currently* have the knowledge to answer a question, but that the knowledge is surely on the horizon. Four-year-old ME had some insights that adult ME had lost in the ensuing years. I like to think I regained some of that intellectual optimism this past year.
However, to be totally honest, and I consider you all my best friends, so I will always be honest with you, my pessimistic side almost kept me from applying to business school at all…
Because I’m not supposed to be here. For a few reasons.
Julie Keck, right, and partner Jess King
First, I am a woman.
This year, there were more women on the Fortune 500 list of CEOs than ever before. Sounds like progress, right? Wanna know what the number was? 33. 33 out of 500. Let me make that clearer. Out of 500 CEOs on that list, 467 were men, and 33 were women. That’s 6.6%. That’s appalling.
It is May 8 — the last day of classes, and just like every three weeks or so, we have a speaker come to our class and talk to us for the whole morning. This time it is the one and only Professor Stuart Hart, and by now we should know him and his teachings pretty well.
Professor Stu Hart
For the ones who do not know, Dr. Hart is the backbone of The Sustainable Innovation MBA program. His research, in conjunction with other experts in the field, such as C.K. Prahalad, and Dean Sanjay Sharma, provide much of the material we study in our classes.
As we know Dr. Hart quite well by now, he decided to base his lecture on where we are now as a society, and where we are headed in the future, as well as some of his current research. After some 500 years of history, he explained the many phases of the most important economic systems the world has been going through— feudalism, mercantilism, industrial capitalism, institutional capitalism, financial capitalism. He finally mentioned the next phase that we are transitioning to— what he called the new sustainable capitalism. Each of phases have been going through a cycle of power and economic distribution that repeats itself, were we keep making the same mistakes, falling on the same bumps, and ending up in the same place, which is not exactly a good one.
We are now in a moment in history haunted by a severe climate crisis, as well as a social one, where inequality is hitting major milestones that are getting close to the point of no return. It is a point where the Milton Freedman’s “increase of shareholder value” corporate objectives, as well as the concept of tying the payment of chief executives and senior leaders to performance, are to be reviewed and thought over.
It not only has led to multinational corporations practicing stock buyback and cut R&D spending as well as operational spending including employee pay, among other strategies to raise the prices of their own stocks, but also focus on quarterly earnings reports and quick fixes to their unsustainable models. The pressure of investors, analysts, and high frequency traders has let these companies forget about the long-term strategies required to sustain their operations, as well as promote the wellbeing of their stakeholders. Shareholder primacy, as noted in the past, is not a legal obligation, but the system as of now is fixed for this purpose.
One of the objectives of The Sustainable Innovation MBA program is to create the new generation of businessmen and businesswomen determined to go about their decision making process taking not only financial, but also environmental and social aspects into account. As a student of this program, and part of this community, I would also like to act as a sustainability enabler, by attempting to contribute to corporate transformation from the inside out. Many of these public multinational corporations need to recognize their identity, strengths, and reason of existence, and use it as a tool to transform and modernize their operations and value propositions to ones that contribute to the wellbeing of the environment and society. By doing so, they secure their long term operations for the future.
Now that we have finished the lecture portion of this program, I am a step closer to become part of The Sustainable Innovation MBA alumni community, the one that is building the business leaders that the world needs. I recommend this experience to anyone that is trying to make an impact, and be part of the transformation we are going through.
The “Pains” of a Sustainable Innovation MBA Student
Capacities of time and energy fill up rather quickly for Sustainable Innovation MBA (SI-MBA) students, especially during finals week (and there are roughly eight finals weeks, or two per module, by my count). During the busiest weeks of SI-MBA, workload quickly outpaces recovery, mental health declines, and so does learning, in my estimation.
Such are the challenges of an
accelerated program. If you want to earn a Master’s degree in a year, then you
ought to make the requisite sacrifices. You have to “pay your dues” so to
speak. Most nights call for hours of reading, most of which a student cannot
complete because he or she simply lacks the reserves of either time, energy, or
attention span (or all three).
Might we be able to reduce a
SI-MBA student’s sacrifices while improving his or her learning outcomes?
A Possible Solution
Hypothetically, let’s replace
three hours of reading per week (across all classes) by three hours of
listening to some form of audio media (primarily podcasts) that covers the same
(or similar) material.
SI-MBA students undergo 33
weeks of full-time course work. This simple intervention could therefore save roughly
one hundred hours over the course of the program, doing the quick math. SI-MBA
students could then apply those hundred hours toward networking, proactive planning,
and restorative activities (sleep, perhaps!).
A few professors of the 2019
cohort assigned podcasts for homework, though only as supplemental materials. Multiple
professors assigned occasional TED Talks as mandatory material, but while videos
may require less mental effort for students to digest, I argue that they
involve most of the same trade-offs as reading.
To explore this possible
“solution”, I’ll walk through three of the main advantages of audio media over
reading and video:
Why Podcasts are More Effective Media than Books or
E-Readings
Podcasts Allow You to Multi-Task
People have busy lives, which
is why very few will read this blog post and even fewer will actually read
every word.
Hundreds of pages of reading
(assigned on most nights in the SI-MBA program) become quickly exhausting. This
is probably why I did not hear a single student claim that he or she read every
assigned reading – not even for a single class. Students therefore head into
class discussions having absorbed varying breadths and depths of the
pre-assigned material, which leads to disparities in discussion.
Podcasts, by allowing students
to multi-task (thereby preserving time and energy), could ameliorate such
challenges. To illustrate without belaboring this obvious point, here is just a
short list of activities that one might perform while listening to a podcast:
Driving
Walking
Cleaning
Exercising
[Literally anything that consumes time, but leaves mental
capacity idle]
In short, by listening to a
podcast instead of reading, a student could complete homework while completing
housework, commuting to school, or doing a favorite activity.
Author’s Note: In our Sustainable Innovation MBA program, we talk a lot about sustainability! But for the purposes of this post, I’m going to focus the discussion on the “innovation” side of things. After all, in frontier market contexts where the opportunity to “leapfrog” technology exists, sustainability and innovation really do go hand in hand.
The author at Consensus 2019
Last week I had the distinct pleasure of representing The University of Vermont’s Sustainable Innovation MBA program at CoinDesk’s Consensus 2019 Blockchain Conference in NYC. In attendance were founders of blockchain startup companies, software developers, institutional investors, regulatory agencies, blockchain journalists, and academics from around the world. The topics covered by keynote speakers, panelists, and facilitators of hands-on workshops were vast, and I could not help from allowing the imaginative techno-futurist within me dream of the type of social good that could come from a decentralized “Web 3.0.”
Before I lose my audience with
heady predictions of a decentralized web future, I suppose I should first share
why I attended this 3-day conference in NYC to begin with – that is, to expand
my network within the blockchain development community and learn from industry
leaders about how this new technology, blockchain (or “distributed ledger
technology”), can be used in business to address the social and environmental
challenges that exist today, particularly in frontier market contexts. And for
what it’s worth, I’ll share with you what I see in my crystal ball later.
Wait Wait, Slow Down…What is Blockchain?
Put simply, blockchain, or “distributed ledger technology”, is a type of distributed database stored on a continuous ledger. Participants in a blockchain network can securely store their data on the continuous ledger such that no central authority or administrator can tamper with that data, adding the qualities of both transparency and immutability. This is where blockchain differs from a traditional database. At the end of the day, the real value that blockchain technology offers is trust.
Applied Learnings from Consensus to Practicum
This summer, I will be working with
classmates Esteban Echeverria and Henry Vogt on a practicum project with local
consulting firm Resonance Global. With a global presence in over 60+ countries,
Resonance assists clients in deploying market-based solutions to unlock
opportunity in frontier markets. My practicum team’s task for the summer is to develop
a proprietary analytical framework for assisting Resonance’s clients to make
better decisions about when and how to use blockchain technology in areas
relevant to their work, and then expanding that framework to identify greater
client opportunities for Resonance. As such, my attention during Consensus was primarily
focused on seeking practical business use cases for blockchain technology as
they might apply to solving problems in developing economies around the world.
The vibe of Consensus 2019 differed from last year in that there were “more suits and fewer costumes” among attendees (more on that here). Blockchain consultants from Deloitte, IBM, Tata, and Microsoft all had exhibit booths and lounges showcasing the practical applications of blockchain technology for industry. This year’s Consensus Magazine was titled “From ‘Crypto Winter’ to #DeFi: A Year of Loss, BUIDLing, and Opportunity”. While the ICO boom of 2017-2018 brought a lot of enthusiasm and startup capital into the blockchain and cryptocurrency space, it was clear that 2019 was to be the year of fundamental development, where applications for real business use cases will be piloted and scaled. As things turn out, this was great for me, one of the “suits” in attendance with an academic badge seeking to cut through the hype and learn!
I picked up a signed copy of “Blockchain for Business: Discover How Blockchain Networks Are Transforming Companies, Driving Growth, and Creating New Business Models” from Jerry Cuomo, IBM Fellow and VP Blockchain Technologies, where he penned “Matt – It’s a Team Sport!” I watched a luncheon video by Accenture showcasing its Tech4Good program, featuring its work with Grameen Foundation in economically empowering women at the BoP, among many other technology-driven projects for social good. I learned how ChainLink’s blockchain middleware application solves the smart contract connectivity problem by securely entering real world events onto the blockchain for seamless payments processing. I listened to Deloitte’s approach to advising clients on deploying blockchain projects from ideation to fundraising, structuring, building, and operating. I built my own simulated blockchain network on Amazon Web Services hosting platform in a 2-hour workshop session. Most importantly, I connected with several knowledgeable blockchain industry players with whom I can contact over the summer as my practicum team seeks the expertise needed to develop our blockchain framework for Resonance.
Crystal Ball Time: Blockchain and “Web 3.0”
Let’s take a brief walk through internet history. Remember when Al Gore invented the internet? Me too…(just kidding). Today, we can now look back on the internet era of the search engine, originally used for the sharing and distribution of academic papers, as “Web 1.0”: the Googles, Microsofts, and Apples of the world. Then came Mark Zuckerburg with “the Facebook” – insert “Web 2.0”, an internet driven by user-generated content, data collection, and digital marketing targeted towards an ever-more differentiated consumer who relinquishes data privacy in exchange for the service of algorithms directing her to exactly the right product or service in an increasingly mass-customization-driven market.
In a captivating panel discussion, futurist, economist, and writer George Gilder identified two key crises that represent an existential threat to continued prosperity: the collapse of internet security, and “the scandal of money” (I would personally argue for the climate change crisis to take precedent, but for the sake of carrying this conversation forward, we’ll keep the focus on “innovation” here). He epitomizes these two crises with the examples of the Facebook Cambridge Analytica scandal that undermined the power of democratic institutions in 2016, and the 2008 financial crisis where central banks intervened with monetary policy measures that arguably prevented a world economic collapse and maintained the status quo of power politics, respectively. All of a sudden, we realize the need for a new, decentralized digital architecture for the secure transfer and ownership of assets. Enter the “decentralized web”.
Bitcoin has captured the world’s
imagination over the last 10 years in that it has made many of us rethink the
very idea of money. While Bitcoin itself does not adequately meet any of the
three requirements for money – a store of value, medium of exchange, and unit
of account – it offers a new platform for value transfer in an increasingly
digitized world. As Ethereum co-founder and founder of ConsenSys Joseph Lubin
points out, the currency of the future is likely to be reduced to two things:
data, and human attention. Lubin believes through this understanding that “we
are going to change the nature of value”. The innovation that could bring this
new conceptualization of currency into reality? Tokenization. Lubin points out
that unlike Web 2.0, Web 3.0 will likely consist of several interacting,
decentralized protocols on top of which more agile application layers will
thrive.
So, what does the future hold? Is
this whole cryptocurrency and tokenization thing just a fad? Can we digitize
real world assets to fundamentally change how we perceive peer-to-peer value
transfer? Will Bitcoin ever return to its 2017 high of $19,665? The heck if I
know the answers to any of these questions, but after attending Consensus 2019,
I am well convinced that blockchain technology will likely play a pivotal role
in the evolution of technology towards a more secure and decentralized future,
and the implications for social good to come of that future would be boundless.
