Faculty Corner: Insights and views on sustainability

Kellogg faculty, through their dedication to cutting-edge research across the business landscape, deliver timely, relevant insights on the most important business topics.  

In recent years, sustainability has been a growing area of focus within the business world. While it is a broadly used term, addressing the many facets of sustainability, such as environmental, social and governance (ESG) has become a corporate imperative among business leaders to help create better communities and markets. Explore some of our faculty’s research and insights on sustainability and ESG including responding to climate change, the intersectionality of environmentalism and why engagement — across all social groups — matters.  

On communicating and addressing climate change through business strategies 

Associate professor Meghan Busse’s recent work in the area of energy and environmental economics investigates how the effectiveness of environmental and climate policy is determined, not only by the design of the policy itself, but also by the strategies and competitive interactions of the firms to whom the policy is applied.  She teaches the core strategy course and an elective course on the economics of energy markets and the environment. 

In a webinar for Kellogg Insight, Busse addresses head-on the question of how long we have to stop climate change and what businesses must do to curtail climate change. “This can be a frightening and depressing topic that people aren’t quite sure how to engage with,” says Busse. But for her, the answer — and the science — is quite clear. Businesses need to develop a new system that can dramatically reduce carbon emissions. Learn more about the actions necessary to reach a zero-carbon future and help curtail climate change. 

On seeing sustainability as a multidimensional business framework

Professor Klaus Weber serves as faculty director for Sustainability and Social Impact at Kellogg. His research focuses on the dynamics of organizational and institutional sustainability transitions; the interactions between social movements, corporations, and markets; and economic globalization.  

Organizations have largely dealt with climate change in an ad hoc, piecemeal fashion focusing on reputation management rather than innovation. But Weber cautions against business-as-usual, noting if they want to avoid falling behind, then they need to adopt a holistic sustainability view. Weber says in Kellogg Insight, “Companies have to move beyond seeing climate change as an external relations issue and instead begin viewing it as part of the business environment.” Where can they start? He advises businesses to integrate the reality of climate change into their processes and decisions from product development to hiring to strategy. 

Professor Brayden King’s research focuses on how social movement activists influence corporate social responsibility, organizational change and legislative policymaking. He is an international research fellow at the Oxford University Centre for Corporate Reputation. 

Some of his recent studies examine the change processes leading to improved corporate environmental and social sustainability, including how activism has inspired roles like “sustainability manager” to emerge and evolve. His research looked at how social movements can birth new occupations and the role activists play in defining the new roles. “With these social movements, organizations are asked to make a change,” King says. “And with these new roles, activists can come in and have a say over some issue that they care deeply about, and organizations are often better for it.” 

Assistant professor Ivuoma Ngozi Onyeador examines how dominant and non-dominant group members reason about group-based discrimination and disparities. Through her research program, she aims to increase people’s understanding of and willingness to address inequality. Her work has been featured in leading journals and media publications including Psychological Science, The New York Times and The Atlantic. 

While environmental issues affect everyone, they don’t affect everyone equally. In a collaborative research project, Onyeador and peers explore what building ethnically and economically diverse environmental coalitions can do to alleviate the differences amongst diverse groups when experiencing environmental policies. “Companies need to think about broadening the suite of environmental organizations that they’re supporting to include environmental-justice organizations,” explains Onyeador. One example of this would be instead of simply planting a tree for every item sold, an organization could focus on creating green spaces in neighborhoods that lack them. 

On understanding and engaging people to create impact  

Assistant professor Aaron Yoon explores how firms can account for ESG efforts and integrate the information into their portfolio decision-making process. His work on ESG has been cited in publications including the Financial Times, which noted it as a turning point — and tipping point for action — for how investors viewed and integrated ESG information. 

A recent study by Yoon and George Washington University professor Kyle Welch found that ESG investments, when paired with high ability firm managers who are better able to manage employees, can help boost stock performance. Their findings show that these high ability firm managers who can manage their employees will choose ESG projects that can create shareholder value, which their compensations are often tied to. The study suggests that there is “synergy between ESG and employee satisfaction,” says Yoon. “In my view, it’s likely that ESG motivates employees and makes them more productive. And it makes a lot of sense: you need hard-working employees who buy into the firm’s vision in order to grow.” 

Aparna Labroo is a consumer psychologist and marketing professor with expertise in judgment and decision-making including the role emotions play in consumer choices, health-regulation, self-control, pro-social action and creativity. Her research designs psychological interventions to nudge consumers into taking actions beneficial to them as well as society and has been featured in New York Times, Time, MSN, Forbes, Financial Times and Business Week. 

A joint research effort between Labroo and Kelly Goldsmith, a professor of marketing at Vanderbilt University, sheds light on how the average person can make a more positive impact on the world. “Making a difference means making a trade-off: understanding that every action by a consumer or donor comes with a cost. And what is the cost; what is the benefit?” says Labroo. So, while you can’t do everything — you can do something. Not sure where to start? Check out their three-step guide that can be used as a framework to more thoughtfully reflect on your own efforts to do good. 

 
Read next: Take 5: What Good Does It Do a Company to Do Good?