ENVIR 521/MGMT 579
Business Strategy and the Natural Environment

Environmental Management Certificate Program / Program on the EnvironmentBusiness School
University of Washington

Winter 2006
Mondays and Wednesdays 1:30-3:20 — Balmer 311

Kevin Laverty • laverty@u.washington.edu

Readings on ERes: the URL is https://eres.lib.washington.edu/eres/coursepage.aspx?cid=3684

Course philosophy and approach

This is an exhilarating and pivotal time to study “sustainable business.” On one hand, in every industry there are firms and individuals addressing sustainability as a fundamental concern for design and strategy. There have never been more business initiatives, published articles, and well-attended conferences on the subject. On the other hand, it appears that to many firms and in many public policy debates, sustainability and the natural environment remain low priorities. To many, the concept of “externalities” from economics applies: if a business activity generates externalities, making private firms responsible for eliminating these externalities is seen as an undesirable added cost.


My interest in teaching this course is to explore opportunities for sustainable business to be profitable. I believe that, unfortunately, too many people (including many people running business firms) settle for simple answers. To me, “waste equals cost, therefore eliminate waste” or “consumers will pay more for ‘green’ products” are just as simplistic as asserting that business cannot afford to reduce environmental impacts.


Therefore, the primary goal for the course is to address “sustainable business” issues critically and analytically. To achieve this, we will study a number of examples of firms that have sought to be both profitable and sustainable, and address what can be learned from these examples. We also will study established and emerging theories, models, and frameworks from business and economics, and address whether these are adequate to understand the problems and opportunities we see in the world. We will draw upon business functions and disciplines such as accounting, marketing, and production/operations – as well as strategy.


This course is one of three core courses for the Graduate Certificate Program in Environmental Management (EM). The premise of the EM Program is that the most important environmental problems of our era require that professionals in diverse fields have the motivation, perspective, and skills to engage in creative, multidisciplinary problem solving. While the substantive focus in this course is on frameworks from business and economics, engaging the perspectives of other fields is essential to the course and is a model for how professionals must work together.



Readings and seminar analysis/contribution

Individual written papers –short (800-1200 words) analyses of 5 readings

Group project – research and write case study



In general, students are expected to demonstrate the level of motivation, responsibility, and quality of work consistent with the explicit and implicit expectations associated with graduate study at a leading research university. Strict adherence to University of Washington standards with respect to academic integrity is expected implicitly by enrollment in this course. If you have any questions, please do not hesitate to ask me.


I expect that each student will contribute and help others benefit from her/his particular background and expertise, including models and knowledge from specific disciplines. Nevertheless, some expectations cross all disciplines: thinking critically and systematically, writing clearly, and communicating ideas and arguments in a seminar format. I assume we are all familiar with arguments addressing business and the environment that devolve into empty rhetoric. I feel it is my duty to insist that all assertions will be supported by logic and facts, and I expect that students will hold each other and me to this standard as well. I desire and anticipate a vigorous exploration of alternative points of view, but this must be carried out with unwavering respect for others.



An equal weighting of three components: contribution to the class (e.g., though discussion), individual written assignments, and the group project. (Note: if it is clear to me that the contribution of an individual to the group research project is significantly above or below that of other group members, the grade for the individual will be adjusted accordingly, up or down from the grade assigned the group.)


Contribution to class. Every student should be prepared to make high quality contribution at every class session based upon assigned material. This requires study, not simply reading, of these assigned articles and cases.


Individual assignments. Each student will be responsible for 5 short (800-1200 words) analyses. The first, due Monday January 10, is required of all students. The other 4 will bebased upon individual choice; I will designate readings and questions that you may choose among. The individual written assignments must be completed and submitted by the beginning of the class session at which the related readings are to be discussed.


Group project. Details will be provided. I encourage each student to seek out and work with people from outside your “home” discipline.

Wednesday January 4 - Course overview; presentation: seminal ideas of a business perspective on environmental management

Monday January 9 - Readings available on ERes (folder "Monday January 9"):

Lovins, A.B., Lovins, L.H., & Hawken, P. (1999) "A road map for natural capitalism," Harvard Business Review, 77(3): 145-158. This article also is available at http://www.natcap.org/images/other/HBR-RMINatCap.pdf.

McDonough, W., & Braungart, M. (2000). "A world of abundance," Interfaces, 30 (3): 55-65.

Senge, P.M., & Carstedt, G. (2001). "Innovating Our Way to the Next Industrial Revolution," MIT Sloan Management Review, 42(2): 24-38.

Wednesday January 11 Manufacturing 1 - Readings:

"Fuel Cells: The Hydrogen Revolution" 9-804-144 (packet from University Bookstore)

Cowan, R. & Hulten, S. (1996) "Escaping lock-in: The case of the electric vehicle." Technology Forecasting and Social Change. Available on ERes (folder "Wednesday January 11") or at http://www.cgl.uwaterloo.ca/~racowan/escape.pdf

Wednesday January 18 - Manufacturing 2 - Readings:

"Xerox: Design for the Environment 9-794-022" (packet from University Bookstore)

Monday January 23 - Manufacturing 3 - Readings available on ERes (folder "Monday January 23") and via links below:

This session addresses 3 environmental technologies: biodiesel, compostable plastic, and hybrid autos

A. Biodiesel

Howland, G., Jr. (2005) "Clean energy frenzy" Seattle Weekly (December 14)



Environmental Management student project on biodiesel from Spring 2003

B. NatureWorks PLA




C. "Environment and Hybrid" Case on Toyota Prius WBCSD
Wednesday January 25 - Marketing 1 - Readings available on ERes (folder "Wednesday January 25")

Ginsberg, J.M., & Bloom, P.N. (2004) "Choosing the right green marketing strategy," Sloan Management Review, (Fall) 79-84.

Pedersen, E.R., and Neergaard, P. (2006) "Caveat emptor - Let the buyer beware! Environmental labeling and the Limitations of 'Green' Consumerism," Business Strategy and the Environment, 15: 15-29 (2006)

Peattie, K. (2001) "Golden goose or wild goose? The hunt for the green consumer." Business Strategy and the Environment, 10(4): 187-199.

Berglind, M. and Nakata, C (2005) "Cause-related marketing: More buck than bang?" Business Horizons, 48, 443-453

Straughan, R.D. & Roberts, J.A. (1999) "Environmental segmentation alternatives." Journal of Consumer Marketing, 16: 558-575.

Monday January 30 - Marketing 2
Patagonia 9-703-035 (packet from University Bookstore)
Wednesday February 1 - Strategy, competition and economic development (work by Michael Porter)

Porter, M.E. (1990) "The competitive advantage of nations." Harvard Business Review, 68(2): 73-91.

Porter, M.E., & van der Linde, C. (1995a) "Toward a new conception of the environment-competitiveness relationship." Journal of Economic Perspectives, 9(4): 97-118.

Porter, M.E., & van der Linde, C. (1995b) "Green and competitive: Ending the stalemate." Harvard Business Review, 73(5): 120-133.

Monday February 6 - Competing on Price: Wal-Mart

Wal-Mart Stores' Discount Operations Product Number: 9-387-018 (packet from University Bookstore)

Wal-Mart Neighborhood Markets Product Number: 9-503-034 (packet from University Bookstore)

Fishman, C. (2003) "The Wal-Mart you don't know," Fast Company, Issue 77: 68.

Hemphill, TA (2005) "Rejuvenating Wal-Mart's Reputation," Business Horizons, 48: 11-21.

Wednesday February 8 - Response/initiatives by large companies
Global Climate Change and BP Amoco Product Number: 9-700-106 (packet from University Bookstore)

GE Ecomagination http://ge.ecomagination.com

Magretta, J. (1997) "Growth through global sustainability: An interview with Monsanto's CEO, Robert B. Shapiro." Harvard Business Review, 75(1): 77-88 (ERes folder "Wednesday February 8")

Holliday, C. (2001) "Sustainable growth, the DuPont way." Harvard Business Review, 79(8): 129-133 (ERes folder "Wednesday February 8")

Holliday, C. (2004) "How big is your footprint?" CEO Solutions

Monday February 13 - Certification
Forest Stewardship Council 9-303-047 (packet from University Bookstore)

Anderson RC & Hansen EN (2004) "The impact of environmental certification on preferences for wood furniture: A conjoint analysis approach," Forest Products Journal, 54 (3): 42-50 (ERes folder "Monday February 13")

Wednesday February 15 - Developing economies
Natura-Ekos: From the Forest to Cajamar 9-SKE-016 (packet from University Bookstore)
Monday February 20 - No class; Presidents' Day

Wednesday February 22

Sarbanes-Oxley Act of 2002

Monday February 27

Environmental Management Systems

Sinclair, G (2004a) "Sarbanes-Oxley Moves EHS Auditing From the Backroom to Boardroom" http://www.socialfunds.com/news/article.cgi/article1520.html

Sinclair, G (2004b) "EHS Auditors Slow to Take Up GRI" http://www.socialfunds.com/news/article.cgi/1521.html

Two other background articles are in the ERes folder "Monday February 27 - Environmental Management Systems":

Kolk, Ans, and Mauser, Anniek (2002), "The Evolution of environmental management: From stage models to performance evaluation," Business Strategy and the Environment, 11: 14-31.

Global Environmental Management Initiative (2004), "Clear Advantage: Building Shareholder Value."

Reinsurance industry response to climate change
World Business Council for Sustainable Development (2005) "Institutional Investors to Insurance Industry: Act Now on Climate Change" http://tinyurl.com/k5l2g

World Business Council for Sustainable Development (2004) "Running the Risk - Risk and sustainable development: a business perspective" (ERes folder "Monday February 27 - Climate change, business risk, and the reinsurance industry")

Overview from WBCSD http://tinyurl.com/s67qt
Swiss Re, "Opportunities and risks of climate change" Read news release and download the document from http://tinyurl.com/nk3d5
Wednesday March 1 - Presentations

CSR reports
Mitigation banking
Natural Step at Whistler
Bamboo flooring industry
Monday March 6 - Presentations

Cradle to Cradle/Zero Waste
Life Cycle Analysis of Concrete
The Farm LLC
Grays Harbor Paper
Whole Foods
Wednesday March 8

Course wrap up

Readings. The University Libraries' ERes (Electronic Reserves) has all readings for which copyright clearance allows for electronic posting. Other readings are available in a course packet at the University Bookstore on the Ave.