Business & the
Natural Environment
Andrew J. Hoffman
Holcim (US) Professor of Sustainable Enterprise
Director, Erb Institute for Global Sustainable Enterprise
University of Michigan
Engaging with the Private Sector for Long term Impact
March 17, 2014
The Relationship Between Business
Strategy and the Environment:
“Environmental Management”
Regulatory Compliance
Economic
Strategy
© Andy Hoffman, 2014
Environmental
Protection
The Relationship Between Business
Strategy and the Environment:
“Environmental Management”
Regulatory Compliance
Economic
Strategy
Environmental
Protection
Social Responsibility
© Andy Hoffman, 2014
The Relationship Between Business
Strategy and the Environment:
“Environmental Strategy”
Economic
Strategy
© Andy Hoffman, 2014
Environmental
Protection
The Relationship Between Business
Strategy and the Environment:
“Environmental Strategy”
Economic
Strategy
Environmental
Protection
$33 Trillion
© Andy Hoffman, 2014
Three Waves
© Andy Hoffman, 2014
The First Wave
1. Regulatory
Compliance
© Andy Hoffman, 2014
The Second Wave
2. Strategic
Environmentalism
1. Regulatory
Compliance
© Andy Hoffman, 2014
The Third Wave
3. Sustainability
2. Strategic
Environmentalism
1. Regulatory
Compliance
© Andy Hoffman, 2014
Articles per year on B&NE
2. Strategic
Environmentalism
3. Sustainability
70
60
50
40
30
20
0
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
10
Total: Specialized
© Andy Hoffman, 2014
Total: Non-Specialized
Market Shift
© Andy Hoffman, 2014
2 Questions…
and why they re the wrong ones.
© Andy Hoffman, 2014
2 Questions…
and why they re the wrong ones.
1.  How much will it cost?
•  0.6-1.4% GDP decrease by 2030 to reach 450ppm (McKinsey,
2007). 1% GDP decrease to reach 500-550ppm (Stern,2007).
•  Decrease in GDP of H.R. 2454 (CBO, 2009)
Year
Percentage Change
2020
-0.2 to -0.7
2030
-0.4 to -1.1
2040
-0.7 to -2.0
2050
-1.1 to -3.4
© Andy Hoffman, 2014
2 Questions…
and why they re the wrong ones.
1.  How much will it cost?
2.  Does it pay to be green?
© Andy Hoffman, 2014
In a market shift,
Frame the issue in business terms
1.  Who is Driving it externally?
2.  What Department will handle it internally?
3.  What Frame best explains the Business Imperative?
• 
• 
• 
• 
• 
• 
• 
© Andy Hoffman, 2014
Government
Suppliers & Buyers
Insurance Companies
Banks
Investors
Consumers
NGOs
• 
• 
• 
• 
• 
• 
• 
Competitors
Trade Associations
Academia
The Press
Employees
Unions
Job Applicants
In a market shift,
Frame the issue in business terms
1.  Who is Driving it externally?
2.  What Department will handle it internally?
3.  What Frame best explains the Business Imperative?
• 
• 
• 
• 
• 
• 
• 
© Andy Hoffman, 2014
Government Affairs
Procurement
Finance
Risk Management
Investor Relations
Marketing
Public Relations
• 
• 
• 
• 
• 
• 
• 
C Suite
Legal
Recruiting
Media Relations
Human Resources
Operations
R&D
In a market shift,
Frame the issue in business terms
1.  Who is Driving it externally?
2.  What Department will handle it internally?
3.  What Frame best explains the Business Imperative?
© Andy Hoffman, 2014
In a market shift,
Frame the issue in business terms
Regulatory
Compliance
Strategic Direction
New Product Development
Supply Chain Logistics
Operational Efficiency
Corporate Reputation
Climate
Strategy
Resource Availability
Consumer Demand
Disaster Preparedness/Resilience
Cost of Capital
Insurance Risk
Management
© Andy Hoffman, 2014
Internal Culture/
Employee Retention
In a market shift,
Frame the issue in business terms
CLIMATE MITIGATION
Regulatory
Compliance
Strategic Direction
New Product Development
Supply Chain Logistics
Operational Efficiency
Corporate Reputation
Climate
Strategy
Resource Availability
Consumer Demand
Disaster Preparedness/Resilience
Cost of Capital
Insurance Risk
Management
© Andy Hoffman, 2014
Internal Culture/
Employee Retention
In a market shift,
Frame the issue in business terms
CLIMATE ADAPTATION
Regulatory
Compliance
Strategic Direction
New Product Development
Supply Chain Logistics
Operational Efficiency
Corporate Reputation
Climate
Strategy
Resource Availability
Consumer Demand
Disaster Preparedness/Resilience
Cost of Capital
Insurance Risk
Management
© Andy Hoffman, 2014
Internal Culture/
Employee Retention
Market Shift
Market
Shift
21
© Andy Hoffman, 2014
Climate Cost Abatement Curve
Source: Enkvist, Naucler, & Rosander. A Cost Curve for Greenhouse Gas Reduction. McKinsey Quarterly, no. 1 (2007): 1–7
Resistance to this Market Shi0
Resistance to this Market Shi0
SOURCE: Union of Concerned Scien-sts (2012) A Climate of Corporate Control: How Corpora7ons Have Influenced the U.S. Dialogue on Climate Science and Policy (Cambridge, MA: Union of Concerned Scien-sts). Resistance to this Market Shi0
Belief in the science of climate change declined from 71 to 57% among Americans between 2008 and 2009 (Pew Research Center, 2009) and rose to 62% in 2011 (Borrick and Rabe, 2012). Belief that most scien-sts think global warming is happening declined from 47 to 39 percent among Americans between 2008 and 2011 (Ding, et al, 2011). SOURCES: McCright and Dunlap, 2011; Maibach, Leiserowitz, Rosen-­‐Renouf and Mertz, 2011; Pew Research Center, 2009; Borick and Rabe, 2012. Cultural Values Engaged by Climate Change
1. 
2. 
3. 
4. 
5. 
6. 
7. 
8. 
Poli'cal Ideology of Climate Proponents Trust in the Market Distrust in Science, Scien'sts and the Scien'fic Process Differing Concep'ons of Risk Value of and Rela'onship to the Environment Discomfort with the Scenarios of Climate Outcomes Role of Government Differing Values and No'ons of Morality SOURCES: Hoffman, 2010, 2011, 2012; Hulme, 2009; Oreskes & Conway, 2010; Maibach, Leiserowitz, Rosen-­‐Renouf & Mertz, 2011; Kahan, 2010; Kahan, Jenkins-­‐Smith & Braman, 2010; Feinberg & Willer, 2010. Hoffman, A. (2010) Climate change as a cultural and behavioral issue:
Addressing barriers and implementing solutions, Organizational
Dynamics, (39): 295-305.
Cigare=es and human health Slavery aboli<on © Andy Hoffman, 2014
© Andy Hoffman, 2014
© Andy Hoffman, 2014
© Andy Hoffman, 2014
•  SUBJ: AGW is a Nazi eugenical depopula-onary Rockefeller scam. Scum, You think you are doing good, but you are working for Satan. What will become of you? Stan in Seable •  Dr. Hoffman: Where is the Creditable experimental data that proves the greenhouse gas effect? The moral issues is that supposed scien-sts have accepted a "hypotheses "as therory without finding any "creditable experimental evidence " that the Hypothesis exists. You and Univerity of Michigan are the criminals not the "skep-cs. •  We will see who is right and who is wrong. I will be proven right soon. I know you will not respond now, and you will NEVER respond if I am correct. That is how you all operate. But I won't let you forget who was right. •  Are you an idiot deceiver or just plane stupid? I have news for you. There is no such thing as man-­‐made global warming!!!! It's quite possibly the largest fraud in human history!!!! CO2 is plant food! I'm leaving now to increase my carbon footprint which I know will HELP society. If you're s-ll worried, then please by all means, just kill yourself!. •  SUBJ: Get a clue you loser. Or should I get your resume ready. Your days of milking the system with your phony science are numbered. •  SUBJ: Warming terrorists need a spanking. "professor huffing hoffman" No sonabitch green terrorist listens to reason. Emo-on is the password. Crawl out of Fantasyland and face reality. It is all you falsifying sh-­‐-­‐theads who wish to enslave anyone who does not agree with your agw fairytales. So, it is you who wish to be the self-­‐appointed overseers. So, just go away, crawl in a safe hole somewhere, and wait for the world to prove to you your own special brand of stupidity. •  SUBJ: What a nut! …. The only moral problem I see is the one where ideologues like yourself want to force the USA to lower its standard of living to pursue your fantasies. … By the way, how's that hockey s-ck graph working out for you? Perhaps you should provide some evidence for your pathe-c climate theory, then us peasants will take you and your fellow "scien-sts” seriously. Un-l then, take a hike. .One more thing, you are a secular evolu-onist right? If so, how do molecules in mo-on have moral stances on ANYTHING, much less fossil fuels? •  Being in the business world you have missed one important fact: anthropogenic global warming is a hoax. The "consensus" is only among a handful of scien-sts charged by the UN IPCC with the task of evoking evidence of global warming and what to do about the "disasters" it will cause. There were not "2000 interna-onal experts" who "all agree" that AGW, in fact, exists. Some of the few early believers have now become skep-cs. Certainly weaning off fossil fuels may have some advantages, but preven-on of global warming is not one of them. Eco-­‐imperialism caused by this scam has prevented developing countries from having their own industrial revolu-on with the coal and natural gas they have. Surely, you are not one of those who hope to de-­‐develop the world and push us backward?! There wouldn't be much need for business professors if that happened! Check out a website, hbp://www.climatedepot.com, to keep up with the devolu-on of anthropocentric global warming •  SUBJ: Slavery was a Democrat ins-tu-on, you're a racist. The democrat party is the most racist organiza-on in the history of Western Civiliza-on.The Indian Removal Act and Trail of Tears was the democrats idea. All the slave owners were democrats. Democrats made educa-ng blacks illegal. Reconstruc-on was opposed by democrats. Jim Crow Laws were enacted by democrats. The KKK was founded by the democrats. •  SUBJ: Gree-ngs Komrade. It's funny you should equate ra-onal thought with proponents of slavery, since the solu-ons of the warming nutballs like yourself are all Marxist destruc-on of civiliza-on. IT IS ACTUALLY YOU who are promo-ng slavery. Wake the hell up from dreamworld. Read up on the fraud of temperature "adjustments". There is no fucking warming. None to speak of. Is your Phd printed on Charmin? Reverse course now, and blame others for the fraud. Don't go down with the warming ship. It's already lis-ng to Port. •  Hey Dick Head. Sorry you have such an empty life, but I'm going to bet it gets a lot worse from here. Count on it. Shallow minded talking airheads always have that skeleton in the closet. I bet we are soon going to be hearing about yours. Have a care free day. © Andy Hoffman, 2014
•  SUBJ: AGW is a Nazi eugenical depopula-onary Rockefeller scam. Scum, You think you are doing good, but you are working for Satan. What will become of you? Stan in Seable •  Dr. Hoffman: Where is the Creditable experimental data that proves the greenhouse gas effect? The moral issues is that supposed scien-sts have accepted a "hypotheses "as therory without finding any "creditable experimental evidence " that the Hypothesis exists. You and Univerity of Michigan are the criminals not the "skep-cs. •  We will see who is right and who is wrong. I will be proven right soon. I know you will not respond now, and you will NEVER respond if I am correct. That is how you all operate. But I won't let you forget who was right. •  Are you an idiot deceiver or just plane stupid? I have news for you. There is no such thing as man-­‐made global warming!!!! It's quite possibly the largest fraud in human history!!!! CO2 is plant food! I'm leaving now to increase my carbon footprint which I know will HELP society. If you're s-ll worried, then please by all means, just kill yourself!. •  SUBJ: Get a clue you loser. Or should I get your resume ready. Your days of milking the system with your phony science are numbered. •  SUBJ: Warming terrorists need a spanking. "professor huffing hoffman" No sonabitch green terrorist listens to reason. Emo-on is the password. Crawl out of Fantasyland and face reality. It is all you falsifying sh-­‐-­‐theads who wish to enslave anyone who does not agree with your agw fairytales. So, it is you who wish to be the self-­‐appointed overseers. So, just go away, crawl in a safe hole somewhere, and wait for the world to prove to you your own special brand of stupidity. •  SUBJ: What a nut! …. The only moral problem I see is the one where ideologues like yourself want to force the USA to lower its standard of living to pursue your fantasies. … By the way, how's that hockey s-ck graph working out for you? Perhaps you should provide some evidence for your pathe-c climate theory, then us peasants will take you and your fellow "scien'sts” seriously. Un-l then, take a hike. .One more thing, you are a secular evolu'onist right? If so, how do molecules in mo-on have moral stances on ANYTHING, much less fossil fuels? •  Being in the business world you have missed one important fact: anthropogenic global warming is a hoax. The "consensus" is only among a handful of scien'sts charged by the UN IPCC with the task of evoking evidence of global warming and what to do about the "disasters" it will cause. There were not "2000 interna-onal experts" who "all agree" that AGW, in fact, exists. Some of the few early believers have now become skep-cs. Certainly weaning off fossil fuels may have some advantages, but preven-on of global warming is not one of them. Eco-­‐imperialism caused by this scam has prevented developing countries from having their own industrial revolu-on with the coal and natural gas they have. Surely, you are not one of those who hope to de-­‐develop the world and push us backward?! There wouldn't be much need for business professors if that happened! Check out a website, hbp://www.climatedepot.com, to keep up with the devolu-on of anthropocentric global warming •  SUBJ: Slavery was a Democrat ins-tu-on, you're a racist. The democrat party is the most racist organiza-on in the history of Western Civiliza-on.The Indian Removal Act and Trail of Tears was the democrats idea. All the slave owners were democrats. Democrats made educa-ng blacks illegal. Reconstruc-on was opposed by democrats. Jim Crow Laws were enacted by democrats. The KKK was founded by the democrats. … •  SUBJ: Gree-ngs Komrade. It's funny you should equate ra-onal thought with proponents of slavery, since the solu-ons of the warming nutballs like yourself are all Marxist destruc'on of civiliza'on. IT IS ACTUALLY YOU who are promo-ng slavery. Wake the hell up from dreamworld. Read up on the fraud of temperature "adjustments". There is no fucking warming. None to speak of. Is your Phd printed on Charmin? Reverse course now, and blame others for the fraud. Don't go down with the warming ship. It's already lis-ng to Port. Skepticism of Science and Scientific Elites
Suspicion of Political Ideology
Fear of Economic Disaster
•  Hey Dick Head. Sorry you have such an empty life, but I'm going to bet it gets a lot worse from here. Count on it. Shallow minded talking airheads always have that skeleton in the closet. I bet we are soon going to be hearing about yours. Have a care free day. © Andy Hoffman, 2014
Thank you
Andrew Hoffman
Holcim (US) Professor of Sustainable Enterprise
Director, Erb Institute for Global Sustainable Enterprise
University of Michigan
E: [email protected]
W: www.andrewhoffman.net
T: @HoffmanAndy