Green bonds are bond issues, used to finance new or existing projects, whose proceeds are exclusively applied to financing projects or businesses that will promote progress on environmentally sustainable activities. The green bond market has increased exponentially in the last decade, from approximately $7 billion in 2010 to over $250 billion in 2019, with growth fueled by the increasing environmental awareness of corporate stakeholders (e.g., investors, customers). This note includes a working definition of the green bond market, its financial scope, and examples of successful implementation. The note also addresses the challenges to further growth and acceptance-including a lack of consistent global standards on green project definitions as well as reporting and disclosure around the environmental impact of green bonds.
The chief executive officer of Zoomcar, an Indian car-rental company, had recognized that the costs of vehicle ownership were high for many individuals who needed vehicles only sporadically. The venture capital-funded, entrepreneur-driven business had launched in 2013, gone through three changes in its business model between 2016 and 2019, and identified a gap in the market with adequate demand to be fulfilled. Having adjusted its business model twice to circumvent the issue of supply, in 2020 it believed that it had identified the perfect product-market fit that would solve consumers' concerns over owning versus hiring vehicles. The business's shared-mobility model would allow customers to reduce the total cost of vehicle ownership by offering their vehicles for short-term hires to other users on the Zoomcar platform. Now, it needed to resolve three issues: First, how could it get more cars on the platform? Second, even if it had the cars, how could it get people to adapt to a shared-mobility ecosystem? Third, how could it manage all of this while maintaining viable unit economics and ensuring long-term profitability?
In 2018, the founder of Swift Mobility in Nakuru, Kenya, Africa was considering her options for the future of her company, which was a Safaricom Plc dealership. The founder was reflecting on how much her business had progressed in the past ten years and wondering if this was the right time to expand or invest in the company's future. She had just spoken with the property owner of a potential new store in Mombasa, Kenya, but was also considering other options. In addition to potentially expanding to a new location, the founder could choose to invest further to grow her current operation, or sell the business and exit the highly competitive telecommunications industry in favour of a more moderate lifestyle. Which option would be her best path forward?
In November 2020, infrastructure investment and development company InfraCo Asia Pte Ltd, investment management firm Gemcorp Capital, and Finnish development financier Finnfund's OP Finnfund Global Impact Fund I jointly financed the Indonesia Rural Wireless Broadband (IRWB) project through a senior debt facility of US$75 million. The IRWB project is expected to expand the fixed wireless broadband network of borrower Net1 Indonesia by installing 1,500 base transceiver stations (BTS) across the country, up almost five times from the existing figure of 357 BTS before the expansion commenced. The project would cover several provinces, including nine that are considered the least developed in Indonesia. It is estimated that 300,000 households, particularly those that fell between the fourth and last (i.e., poorest) quintile of the population, would benefit from the project. In deciding whether to proceed with financing the project, InfraCo Asia, which is funded by the foreign ministries of the UK, the Netherlands, Switzerland, and Australia, had to take into consideration several factors: risk management, commercial viability, technology, due diligence, business model, and development impact (DI). The case examines how InfraCo Asia ensured that the decision to finance the IRWB project is a well-considered one, such that the project has a fair chance of being commercially viable while also achieving considerable DI.
This article explores the role that technology plays in creating and fostering transparency in global supply chains. Transparency is deemed vital in the creation of sustainable and resilient supply chains and overall effective corporate governance. There are two distinct orientations toward the use of technology by multinational corporations (MNCs) in creating sustainability transparency within their global supply chains: control and relational. A control orientation views technology as a tool to gather the ever-increasing levels of sustainability data on supplier practices in an efficient, secure, and progressively automated manner. A relational orientation adopts a view where technology is a tool to help build social relations and improve dialogue and collaboration on sustainability throughout the supply chain. A key difference in the two orientations lies in the mindset of the MNC manager toward the development of supply chain sustainability transparency. The article illustrates the effective application of both approaches and offers advice to managers on the design choices they need to consider in choosing technologies.
Many organizations are eager to develop a digital platform. Yet, it is not clear how to realize this ambition, especially for large companies with complex existing structures. This study demonstrates how the growing trend of "Inner Source" (adopting internal open- source/crowdsourcing practices within large organizations) can help companies become more platform-based. This article studies three large organizations - Zalando, Philips Healthcare, and PayPal - and identifies a four-stage model that explains how Inner Source helped them develop their internal and external platforms. It details six recommendations for large organizations wishing to follow a strategy of Inner Source-driven platformization.
Telepass, until very recently the sole processor of electronic toll payments on Italy's highways, has ambitions beyond tolling. Since the mid-2010s, the company has been expanding into adjacent services. In 2017, Telepass launched TelepassPay-a mobile payment application (app) that allows subscribers to pay for dozens of mobility-related services and products from their smartphones. In 2019, Telepass launched a car insurance brokerage service. Using Telepass data, the brokerage service offers tailored insurance products to existing customers on behalf of insurance companies for a commission on converted leads. Now, in September 2020, Telepass's senior leaders are considering a new, insurance-related growth opportunity: moving beyond the brokerage model to become the primary insurance seller. It is unclear, however, whether Telepass's data provides sufficient insights into individual drivers' risk profiles to build competitive, customized insurance products. Alternatively, Telepass could continue to improve the brokerage model and focus its resources on adding new mobility services to TelepassPay. This case is paired with a supplementary dataset (courseware no. 622-701), which provides a data analysis opportunity for students.
Muhammad Alagil was a second-generation leader in the well-known Alagil Family Group of businesses in Saudi Arabia and co-founder and chairman of its family office, Jarir Company for Commercial Investments (Jarir Investments). The case opens in 2021 with Alagil pondering whether or not to allow family members of the next generations aged 35 and over to spin off their pieces of the trust and set out on their own. This change would have been a massive departure from the state of mind he and his four brothers shared for the past decades: Why would anyone leave and shrink the pie? He was confident that none of the third generation (G3) would leave but he knew there was no guarantee they would stay either. He also knew that, when their time came, a portion of G4 members (the eldest of whom was 12 years old) would likely exercise that right and leave. With the sustainability of the family office in mind, would it be disastrous if some members left? The case discusses whether it was the G2 members' responsibility to entice future generations to stay and, if so, how? If not, should they at least come up with a mechanism to ensure that future generations would survive on their own?
Droom Technology Private Limited (Droom), a used-automobile marketplace platform based in India, had identified a big-ticket item with an average selling price of ₹200,000-₹600,000 and harnessed its innovative technology to build an online ecosystem. In doing so, it had stayed clear of inventory management by following a marketplace model like that used by Flipkart Internet Private Ltd. and Amazon.com, Inc. in India, bringing all participants-including used-vehicle dealers, individual buyers and sellers, and financiers-into the online marketplace. Subsequently, Droom created functional, monetary, time, and psychic values for its customers through its various automobile inspection, valuation, records search, insurance, and other services. Droom went from having a single revenue source to having six independent revenue sources through its subsidiaries, which each offered a unique combination of values and collectively created a tough barrier for competitors to penetrate. By April 2020, the start-up had enjoyed some success, but looking to increase its growth, it faced some questions: Was it offering too much for too little? Was its pricing justified by the value offered? Were its performance metrics commensurate with the value provided? Finally, what strategy would successfully shift Droom from a hybrid to a completely online model ready for listing on the Nasdaq exchange?
Rappi Inc. (Rappi) was an on-demand delivery mobile application (app) that allowed users in Latin America to shop online for groceries, meals, and other products and have these delivered to them. It also provided various other services, such as cash withdrawals and dog walking. Rappi was founded in 2015, and in less than five years, it had evolved from operating in improvised headquarters in a parking lot in Bogotá to becoming a member of an exclusive club of technological start-ups valued at more than US$3.5 billion. In 2021, although the situation was highly favourable for Rappi, it still faced major challenges to consolidate as a technology firm that would make life easier for its users. The question for Rappi now was how to continue its growth path in order to become the leading super app for Latin America.
Entering a new product category or new geographic area may mean adding one or more new competitors with names similar to that of the now-extended brand names those competitors have trademarked or can claim by common law as first users. A company extending its brand therefore may be unable to use its own trademark legally unless it can show the brand extension as a natural expansion. Most such lawsuits settle, but this study uses legal research methods to examine 12 that went to trial. Results show a brand extender most often prevailing in court if and only if (1) its extension into a new product category is seen as similar to its current offerings or (2) its geographic expansion is seen as simply moving into an area in which it already has market presence. By contrast, a firm may lose out to a company already using a similar name for a diverse set of reasons: products differing from their current offerings, differing trademarks, weak marks, or if buyers seem unlikely to encounter both users of the name in question. But no bright line divides winners from losers.
Corporate corruption has become a pervasive problem in our society as scandals erupt with disheartening regularity. These unethical business practices result not only in financial disaster but also in the disillusionment and loss of trust on the part of consumers and shareholders alike. Unethical behavior often originates with top management. However, these bad actors cannot act alone. They must have the complicit support of others within the organization. In this installment of Business Law & Ethics Corner, we examine the pressures and motives of people deep within the corporation; the ordinary people who, by just going about their everyday jobs, enable these scandals to take place. Administrative evil is an explanatory framework to understand the tendency toward dehumanization and the rationalization of unethical behaviors. Using the Wells Fargo account scandal as an illustration, we integrate administrative evil with theories from organizational psychology which strive to understand group pressure for social conformity. We conclude with recommendations to prevent unethical attitudes and behaviors from permeating the organization.
Generation Z, or Gen Z, represents 24% of the U.S. population and is very different from earlier generations. A higher proportion of Gen Zers are earning college degrees, and they are now moving to the next phase in which they will constitute the predominant majority of the incoming workforce. Gen Z faced an unusual set of technology-driven circumstances while growing up and thus bring a distinct set of characteristics into the workplace. We offer a new research-based framework, DITTO, which encapsulates specific recommendations for organizations on diversity, individualism and teamwork, technology, and organizational supports. DITTO serves as a useful mnemonic to help managers recall specific ways to support Gen Zers and leverage the strengths of Gen Zers to benefit the organization and the workforce. Research shows that Gen Zers are more open to diversity and more individualistic and technology-driven than other generations. To the extent that companies use the DITTO framework, the more attractive they should be to Gen Z workers; but the principles of this framework also extend beyond Gen Zers to existing workforce with similar efficacy.
In this article, we argue that the occurrence, trajectory, and impact of consumer activism are in large part driven by the political environment in which firms operate, particularly by their country's level of polarization and the political makeup of their core customer base. In environments characterized by low levels of political polarization, companies are embroiled in a relatively small number of political controversies, and as a result are rarely the target of consumer activism. Conversely, in highly polarized environments, people's political sensibilities are easily offended, which leads to a relatively large number of political controversies. These controversies tend to arise along party lines, meaning they elicit a consumer boycott exclusively from one side of the political spectrum. Such partisan boycotts lead people on the other side of the political spectrum to rally around the company at the center of the controversy and to purchase more of its products. Whether a company's sales end up decreasing or increasing depends on the nature of the issue at the heart of the controversy as well as on the political beliefs of its core customer base. We conclude by describing how companies can successfully navigate this complex interplay between political polarization, consumer activism, and customers' political preferences.
The potential benefits of augmented reality (AR) to consumers include high levels of interactivity, exposure to an extensive virtual inventory tailored to their needs, high-quality customer support, and better integration between web and store-based shopping experiences. The anticipated benefits of a successful AR strategy to a brand or retailer include higher inventory turnover, increased average sales, reduced sales costs, lower customer returns, higher levels of related-item selling, and better customer support outcomes. Despite these revenue- and loyalty-enhancing benefits, few companies use AR, develop a highly integrated AR plan, or incorporate AR into their marketing programs. This article focuses on the successful planning and implementation of AR through a six-step process: (1) Determine how AR can help achieve marketing objectives; (2) choose appropriate products, channels, and target markets for AR; (3) select among AR application types; (4) design AR apps; (5) evaluate alternative AR organizational formats; and (6) measure the success of AR programs.
The subscription box e-commerce industry has experienced tremendous growth over the last 5 years. Given the growing size of the industry, this business model warrants the close attention of firms currently offering subscription services as well as companies considering entering this industry. This article presents a detailed overview of the subscription box industry and proposes a framework - the four Cs - for understanding subscription offerings. It identifies challenges and opportunities facing this industry, and it provides managers with guidance in the form of five tenets on how to navigate the subscription box economy.
The COVID-19 pandemic has changed how salespeople interact with customers and with business-to-business (B2B) organizations. Organizations must confront the shifts in how their salespeople operate. Recent research recommends firms develop an adaptive sales force to address disruptions like a pandemic and be prepared to meet such challenges in the future. Based on interviews with marketing and sales executives, we explore how firms have responded to these interconnected changes during the COVID-19 pandemic and offer insight into best practices deployed across industries.
As organizations accelerate digital transformation with mobile devices, cloud services, social media, and Internet of Things services, cybersecurity has become a key priority in enterprise risk management. While improving cybersecurity leads to higher levels of customer trust and increased revenue opportunities, rapidly evolving data protection and privacy regulations have complicated cybersecurity management. Against the backdrop of rapidly rising cyberbreaches and the emergence of novel cybersecurity technologies such as machine learning and artificial intelligence, this article introduces a cyber risk management framework, discusses a cyber risk assessment process, and illustrates a continuous improvement of cybersecurity performance and cyberinvestment cost analysis with a real-world cybersecurity example.
Blockchain has the potential to fundamentally transform the healthcare ecosystem, impacting all healthcare participants. In this article, we study the potential impact of blockchains on patient-centered care delivery by looking at the ecosystem of blockchain-based solutions being developed for key stakeholders: patients, pharmaceutical firms, hospital systems, and insurance providers. Building from our interviews with senior managers, our actual experience in the healthcare industry, and our academic research, we outline how blockchain will transform healthcare, and we provide guidance as to how those in healthcare need to start thinking about engaging with blockchain technology.