Working at the intersection of Business, Education, and Research for a More Sustainable World
The Erb Institute at the University of Michigan has a mission to create a sustainable world through the power of business. The institute is a partnership between the Ross School of Business and the School for Environment and Sustainability, where students and business partners work together to fulfill this mission. What does this translate to, how does it work, and what impact does it have on Southeast Michigan Businesses? We talked to the Erb Institute Managing Director Terry Nelidov to find out more. Nelidov began his career as a US Peace Corps Volunteer in Paraguay in the early 1990s. Later he served as founding director of INCAE Business School’s Business Leadership for Sustainable Development Network in Latin America, as General Manager for AmeriCasas (a startup land-development company in El Salvador), and then country representative for Catholic Relief Services in Peru. He holds a BS in Industrial Engineering from Stanford University and an MBA from IESE Business School in Spain. Q: The mission of the Erb Institute is to create a sustainable world through the power of business. How do you approach this? A: Yes, this has been our mission for over 25 years and remains our mission today, although our areas of focus have expanded and evolved. When Fred and Barbara Erb endowed the institute in 1996 the focus was on two areas: teaching and research. Over the years the program has evolved to encompass applied research and impact. Meaning we now work to translate research results into practical management tools, case studies, and frameworks for business leaders to put into practice. So today, we have expanded how we think about the work we do into three main pillars; research, teaching, and business engagement. The latter challenges us to be involved in the global dialogue on sustainability and to bring back new questions to inform our research and teaching, while actively sharing the thought leadership of our faculty and students to inform that global conversation. One way we do this is by leading and taking part in global sustainability events such as the SB 2017 and 2019 conferences, the Innovation Forum UK, and more. The Erb Institute is so much more than a teaching institute – it’s about making an impact with businesses and nonprofits focused on sustainability through teaching and research and then sharing the work that comes out of that to scale up our impact in Michigan, across the United States, and beyond. Q: How are you engaging with businesses? A: Great question and my best response would be simply two examples. Recently we hosted the Michigan Business Sustainability Roundtable (MBSR) to bring together senior Michigan business leaders from Kellogg, Dow, Meijer, and others committed to working toward transformational change in social and environmental performance and asked what challenges they have in achieving their goals at the policy level, and how we could support them in advocating together for climate change and racial justice in Michigan. This was a six-month process. We are looking to deepen our connections with policymakers and advocates at the state level and use our collective voices to raise the bar on business, sustainability, and justice in Michigan. The second example involves a groundbreaking research project with Ford Motor Co. In 2018 Ford came to us with a simple but intriguing question, “How can we measure the impact of smart mobility on the human condition?” We launched a two-year research project, co-hired a postdoctoral research fellow, and created the Ford Model of Human Progress. What was particularly exciting about this initiative was that a year later, HP Enterprise attended a Sustainable Brands event where they heard about the model and then took it back to Silicon Valley and began adapting Ford’s model to HP Enterprise’s work in the tech industry. Q: What sustainability issues do you focus on beyond the environment? A: While climate change, water, biodiversity, circular economy, and plastics remain at the forefront, the scope of sustainability has expanded to include a range of social issues, even the very concept of justice and the role of business in a just society. Businesses are being called on to play a significant role here…to support social issues, such as access to education, access to health, and employee engagement and well-being. So, we’ve expanded with this evolution. Indeed, social justice is a significant focus area within our new five-year strategic plan, which focuses on preparing “architects of change” who can work at the intersection of business, sustainability, and justice. Q: How do you think the graduates of the Erb Institute impact businesses? A: We have alumni working in leadership positions in 17 countries. I can point to three examples of how they are making a significant impact. The first is Monique Oxender. While still studying at the Erb Institute, Monique took an internship at Ford and then a full-time position, helping to create their human rights function in the early 2000s. She is now chief sustainability officer at Keurig Dr Pepper, a global platform for sustainability impact. All of that began with her Erb experience. A great example of nonprofit leadership is Laura Rubin, our first Erb graduate. She worked on the Huron River Watershed Council for 25 years and is now a recognized leader in the Midwest and Great Lakes Region in water crisis and habitat issues. A third example is Rep. Joe Tate, who went into public service and politics and was recently elected as the first Black speaker of the Michigan House of Representatives. Interestingly, he was also a USMC Veteran and a former NFL offensive lineman! Q: How do you think the work you are doing at the Erb Institute impacts businesses in general? A: First, the students in class today will be in leadership roles in 10 to 15 years. Second, we make an impact through the power of our ideas and the research of our faculty. The innovations that come out of working with students, researchers, and professors are the ideas that are shaping sustainability going forward. Q: What does the
Helping Detroiters Create New Businesses for a More Equitable World
Jerry Davis, Gilbert & Ruth Whitaker Professor of Management and faculty director of Business+Impact at the Michigan Ross School of Business, believes that with more available government funding than in the past, more entrepreneurs and businesses in Detroit are in a position to build equitable community wealth. Davis, who received his Ph.D. from the Stanford University Graduate School of Business and taught at Northwestern and Columbia before moving to the University of Michigan, has published six books and dozens of articles in academic and business publications. His latest book is Taming Corporate Power in the 21st Century (Cambridge University Press, 2022). His focus is reshaping and developing businesses to be drivers of social and environmental change. SBN Detroit spoke to Davis about his perspectives, the new graduate-level class, and what it ultimately means to Detroit businesses. Q: Tell us about your concept of reshaping businesses into drivers of change. A: I think there are two ways we can orient businesses toward a more equitable sustainable future. First, we can take an existing business and reform it from the inside. This is often done by intrapreneurs. Second, we can create new enterprises that are built right from the start. My overall concept is that businesses can address bigger challenges than just shareholder value through reform or fresh starts. There are so many new building blocks available to businesses today that we can leverage to not only make money but also to begin to address the racial wealth gap, generational inequality, and the green energy transition. Q: What do you mean by building blocks? A: Technology has fundamentally changed the building blocks for creating an enterprise in the last fifteen years. There are dozens of new ways to raise capital that didn’t exist ten to fifteen years ago. There are new ways to find distribution channels, new ways to work with suppliers and labor, new legal formats, and the list goes on. Q: How do the United Nations Sustainability Development Goals inform your work? A: Since the inception of the Sustainability Development Goals in 2015, I’ve used them as a GPS of sorts for orienting what businesses can do to contribute to social benefit. I’ve integrated this into my teaching and writing and research. Drilling down …If you had to pick one threat we are facing on a global basis that businesses can work better to address – and that creates business opportunities – it’s the green energy transition. This is the thing in our generation that we need to accomplish starting today. And it’s impossible to address it with government action only. There is a central role for businesses to play in bringing about this transition. And with the Inflation Reduction Act and Justice40 in place, there is no better opportunity to build green enterprises than right now. Q: What are some of the opportunities provided by the Inflation Reduction Act? A: As I said, the need for the green energy transition has never been greater. It is imperative for our species. At the same time, we have the Biden-Harris administration launching the IRA, which creates huge incentives to electrify and transition to green energy. There is an astounding amount of money being allocated to homeowners and renters and drivers to help make this transition. You can simply go online and see the offerings – switching from a gas furnace to a heat pump offers free cash. There are huge tax benefits to electric vehicle owners. And low-income brackets receive even more benefits. I highly recommend the “Rewiring America” website. From a business perspective, this is an opportunity like never before. Businesses that provide services around transitioning to green energy stand to prosper greatly through this funding. These opportunities represent a chance to build generational wealth. Q: Can you explain more about how the act supports generational-wealth building? A: Detroit has been hit hard in several ways … the mortgage crisis, residential flight, municipal bankruptcy, and the list goes on. These have robbed people of opportunities to create prosperity for themselves and their families. So, this funding represents an especially well-placed opportunity for cities like Detroit. According to the White House, the Justice40 initiative means that “40 percent of the overall benefits of certain federal investments flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution.” That includes “climate change, clean energy, and energy efficiency, clean transit, affordable and sustainable housing, training and workforce development, remediation and reduction of legacy pollution, and the development of critical clean water and wastewater infrastructure.” When you combine the IRA and Justice40, it opens the spigot for cash allocated toward environmental initiatives. So again, the opportunity to start a new business and build community wealth has never been greater than it is right now. This is the impetus behind a new graduate class starting this week called “Impact Studio: Designing the Equitable Enterprise” that I am teaching with my co-instructor Cat Johnson. Q: Tell us more about the class and how you see it impacting both the students and local businesses. A: The class focuses on how to use the new building blocks of business to create enterprises in Detroit that will facilitate the green energy transition. Students will interview dozens of Detroit businesses and members of the community to better understand the needs and pain points around energy. They will then map out the opportunities. For example, let’s say a building contractor is looking to use heat pumps but can’t find someone with the skill to install them, or can’t find a vendor for them. This represents an opportunity. Maybe a college can create training programs for installation. Or find incentives to make heat pumps more widely available. They will then go on to create what I call template business models – plausible, economically sustainable models that are replicable – and a set of how-to guides. The how-to guides will translate into plain English the ways in which entrepreneurs and communities can build on the IRA and the new building blocks of
