On the first day of class in January, Professor Bradford S. Gentry told his students that they would focus “not only on pressures on business because of environmental and sustainability issues, but also look for opportunities presented.”
The students he addressed weren’t sitting in front of him. Instead, more than 50 students were spread across 15 time zones. The course, Natural Capital: Risks and Opportunities in Global Resource Systems, is the third of the Global Network for Advanced Management’s distinctive small network online courses. The so-called SNOCs use technology to connect students across the world for class sessions and team-based project work but, unlike the MOOCs—massive open online courses— offered by other schools, are open only to students in Global Network member schools. The first Global Network Courses launched in September 2013 at Yale SOM; several other schools are planning future courses, the next of which, Technion-Israel Institute of Technology’s New Product Development, begins in February.
Natural Capital has two objectives: to examine the environmental, economic, and social impact of businesses’ natural resource usage, and to analyze the risks, choices, and liabilities companies may face while using those resources. Students analyze problems that companies including Alcoa, Coca-Cola, and General Electric are grappling with and design potential solutions. The issues discussed range from the environmental impact of palm oil plantations in Indonesia to the effects of climate change on the micro-insurance market in Africa.
These are global issues that are expressed in local contexts: bio-physical contexts, social contexts, political contexts, economic contexts.
The solutions, for businesses and in the students’ own analyses, are not clear-cut, since the scenarios are live and ongoing, Gentry says. “These are real dilemmas facing real companies across the planet.”
Gentry is a professor in the practice at Yale SOM and the Yale School of Forestry & Environmental Studies, and serves as faculty director at the Yale Center for Business and the Environment. He says that businesses are looking for leaders who understand how natural resource systems can create new opportunities for investment. “They’re trying to figure out not only how we make businesses more sustainable but how we train the next generation of business leaders to manage these intensifying risks and capture even more of the opportunities presented,” he says.
Students are divided into teams and use an online platform including a chat client, video conferences, and forums to discuss their work on each of the problems. Interacting with their classmates provides students with cross-cultural perspectives and illuminates the fact that there are multiple approaches to each scenario, Gentry says.
“These are global issues that are expressed in local contexts: bio-physical contexts, social contexts, political contexts, economic contexts,” he says. “If you’re within this broader system, it’s no longer sufficient to innovate within your walls. You have to think about who you are dependent on and what you are dependent on.”
In a recent class, students listened to an Alcoa representative discuss the company’s efforts to increases its stake in the automotive market. Recently, he pointed out, Ford announced that it would switch to an aluminum frame for the 2015 model of the F-150 truck, cutting nearly 700 pounds from the vehicle and increasing fuel efficiency. Students later made their own proposals for increasing aluminum’s role in the automotive industry.
Randall Scheps, marketing director for Alcoa’s automotive sheet business, told students that sustainability has increasingly become a selling point for the company’s products. In addition to increasing fuel economy because of its lower weight, aluminum can easily be melted down for reuse once a car reaches the end of its functional life and repurposed for future vehicles. That’s a winning model for both the industry and the consumer, he said. “Every year, sustainability moves higher and higher on our decision priority scale.”
Maria Nerissa C. Leonardo, an MBA student at National University of Singapore, says that the class gives students a "sneak peek" at the kind of sustainability issues that businesses are facing at the moment, and illustrates the fact there isn’t a one-size-fits-all approach. “Sustainability of our natural capital is a highly relevant, urgent issue that isn't insurmountable,” Leonardo says. “Businesses, schools, and public bodies are actively working on solutions.”
Watch a session of the Natural Capital course focusing on Alcoa’s efforts to enter the automotive market.