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Although biofuels had been used for many years (from 1980 to mid-2007, an estimated 2 trillion miles were driven on ethanol-blended fuels in the United States), it was not until the late 20th and early 21st centuries, with dwindling oil supplies, the threat of global warming, and unrest in the oil-rich Middle East that people began thinking of them seriously as alternatives to petroleum-based fuel. Biofuels were also considered better for the environment than gasoline because they produced far less carbon monoxide, carbon dioxide, sulfur dioxide, and particulate matter, and fewer toxic contaminants, hydrocarbons, and volatile organic compounds. This note describes biofuel production and the many effects its increasing use had on the energy supply, agriculture, and the environment. The use of biofuels was not without controversy, and this note is a good starting point for students who can be asked to research further and identify and discuss the issues presented by biofuel use.

In 2007, corporate governance became a well-discussed topic in the business press. Newspapers produced detailed accounts of corporate fraud, accounting scandals, excessive compensation, and other perceived organizational failures-many of which culminated in lawsuits, resignations, and bankruptcy. Central to these stories was the assumption that somehow corporate governance was to blame. That is, there was a functional failure in the system of checks and balances established to prevent abuse by executives. This case explores the various corporate governance systems that have been adopted in the United States and in various countries in Europe and Asia. The issues of control, director independence, auditor independence, dual-board versus unitary-board structure, comply-or-explain, and legislative versus market-driven solutions are explored. Readers are asked to evaluate what governance systems or elements they consider to be most effective. Plentiful examples--including Johnson & Johnson, BMW Group, Michelin, Heineken, Toyota, Samsung, Posco, PetroChina, Infosys, and many others--are used throughout as illustration.

Research over 35 years shows only a weak link between socially responsible corporate behavior and good financial performance. However, there's no evidence of risk in doing good, only in being exposed for misdeeds.

This is an MIT Sloan Management Review article. As the war for talent intensifies, there is growing evidence that a company's corporate social responsibility activities comprise a legitimate and compelling way to attract and retain good employees. To burnish their social responsibility credentials and thereby attract and retain talent, CEOs of companies such as Home Depot, Delta Air Lines and SAP recently pledged to deploy millions of employee volunteers on various community projects. Indeed, many companies big and small, including Cisco Systems, General Electric and IBM, view employee engagement in CSR as a "strategic imperative." But few organizations have figured out how to use CSR properly as part of their employee engagement efforts. They fall short of communicating their CSR intentions and initiatives to their employees and tend to keep CSR decisions in the hands of senior managers. At the same time, they fail to understand which CSR initiatives work best to excite which groups of employees. All in all, they fail to capture CSR's considerable potential to help them fight the war for talent. When used properly, CSR can strengthen employees' engagement by creating the feeling that they are part of a larger corporate mission and that the company shares their values, and by helping them enhance their own social connections. This article draws on recent studies to confirm that CSR can yield substantial returns for both employees and the company. The research demonstrates that CSR initiatives can fulfill employees' needs and motivate them to identify strongly with their employers, as is very much the case at The Timberland Co. Using frequent verbatims from study participants, the article portrays the challenges that companies face in making the most of their CSR strategies internally. The authors then recommend five practical steps that can help business leaders increase CSR's effectiveness as a lever for talent management, acquisition, and retention.

This is an MIT Sloan Management Review article.

The case illustrates the challenges of growing sustainably by tracking the 30-year journey of a quintessentially Canadian chef, environmental champion, and strong advocate of slow food, seasonality, local sourcing and artisan food production. Set in mid May 2007, the case decision has Toronto-based Jamie Kennedy pondering several expansion options for Jamie Kennedy Kitchens, a corporation with three main ventures. Jamie Kennedy Kitchens' annual revenues were more than $7 million and earnings before taxes of 6.7 per cent in an industry typically averaging 3.2 per cent were testimony of the growing appeal of organic food and wine pairings. With influential cook-books, global accolades, rave reviews by acclaimed food critics, and a fast growing base of satisfied customers, Jamie Kennedy was well positioned for growth. Yet Jamie Kennedy grappled with the implications of growth for the core pillars of his business. The case explores the trade-offs between financially profitable growth and Jamie Kennedy's determination to stay true to local sourcing and cooking with seasonal ingredients and his environmental values. The case asks students to anticipate growth alternatives and articulate their points of leverage or disconnect with Jamie Kennedy Kitchens current business model, as well as Jamie Kennedy's cuisine and personal values.

Asociacion Civil Labor is a private non-profit organization founded in 1981 in llo, a city located in an important mining and fishing region in southern Peru. Its original mission was to defend labor rights and promote leadership among workers in the mining industry, but during its first decade of operation this evolved into the defense of sustainable community development and the rights of communities affected by extractive activities. The labor case is particularly relevant for the analysis of some of the typical challenges faced by organizations whose institutional performance e is oriented toward advocacy and the defense of basic citizen rights. Over the years, Labor consolidated itself as an institution and had an important impact on the defense of the environment, the creation of greater awareness of the impact of the extractive activities, and the generation of public policy toward this sector in Peru. This case is particularly interesting because of the close relationship that the NGO maintained with the municipal government, which generated favorable results for the population of llo but also produced dilemmas with regard to the identity, mission, and autonomy of Labor. These dilemmas reached a critical point in 1997, when the proposal to build a new coal-fueled energy plant in an area zoned for tourism and recreation generated contrary opinions among the municipal authorities and the NGO staff, and divided the local population. The decisions that Labor made on this issue would have long term repercussions for the organization, which would have to redefine its relationship with a significant part of the population of llo as well as with municipal authorities and the NGO donors.

Control Data Corporation is considering its response to the assassination of renowned civil rights activist Martin Luther King. Four months prior, William Norris, president of the Minneapolis-based computer firm had already committed to building a plant in a low-income area of Minneapolis, but with pressure rising on businesses to respond to inner-city needs and increase minority hiring, Norris urges the company to consider building yet another inner-city plant, this time in Washington, D.C.

In 2006, David Zucker, chief executive officer of Midway Games, came under fire for selling a significant amount of Midway stock just weeks before a precipitous decline in the company's share price. One year later, Angelo Mozilo, chairman and chief executive officer of Countrywide Financial, also increased the pace of his stock sales in the months before troubles in the U.S. mortgage lending market led to a similar drop off in Countrywide's share price. Both executives placed their trades through prearranged programs known as 10b5-1 plans. 10b5-1 plans, named after the Securities and Exchange Commission rule which led to their creation, provided a systematic method for corporate executives who were routinely in the possession of material nonpublic information to engage in the sale of company stock. When implemented appropriately, 10b5-1 plans provided a safe haven that shielded these individuals from liability under insider trading laws by demonstrating that certain safeguard conditions were in place at the time the trades were executed. However, the circumstances under which both executives carried out their programs led to an outcry from shareholders that the programs were being abused. Regulators and shareholders were left to decide whether the two men executed their 10b5-1 plans in good faith as required or whether their actions amounted to a sophisticated form of illegal insider trading.

Yinguangxia ("YGX"), a joint stock listed company in China, has captured much media attention since the mid-1990s for its contribution to China's eco-agricultural industrialisation and modernisation of traditional Chinese medicine. The astonishing leap of its share prices, about 440% in 2000, caused journalists at Caijing, a local reputable financial magazine, to be suspicious and they set off to investigate YGX. On 2 August 2001, Caijin published an article alleging YGX's misrepresentation of export activities, which involved its Tianjin subsidiary's sale of biologically extracted products to a German company, Fidelity Trading GMBH. A profit overstatement of US$93 million from 1998 to 2001 was eventually revealed by China Securities Regulatory Commission, and four of the company's senior officials, including the former CEO and CFO of YGX and Tianjin Guangxia, were sent to jail for forging documents and fraudulent misrepresentation of information. The operating licence of the company's external auditors, Zhongtianqin, was revoked and the professional certificates of its two certified public accountants were repealed. The scandal also resulted in the investors' crusading pursuit of private indemnification against their investment loss; the legal protection of private shareholders in China remained an issue of great concern in the country. Having been a top performer on the Chinese stock market, YGX's fallout has revealed the deficiencies of the corporate governance system in China. It also brings to light the problems involved in auditing practices in China.

This case is designed to examine the issue of corporate social responsibility in a small firm. The key issue is how a small organization can maintain its strong social responsibility philosophy when (a) the organization is growing, (b) the environment in which the organization exists is extremely competitive, and (c) the entrepreneurial visionary who started the firm is getting ready to step down. The case describes the dilemma the owner of White Dog Cafe has regarding the transition of current management to the new management team and the development of the White Dog Cafe's social responsibility philosophy, the challenges that other socially responsible organizations have had as they have grown, and the strategies that the company has used to successfully keep its philosophies and goals at the forefront of its business operations.

Climate change will affect everything businesses do, as government efforts to mitigate carbon emissions cause their prices to rise steeply. This special edition of Forethought takes a hard-nosed look at the risks and opportunities of climate change. Michael E. Porter and Forest L. Reinhardt argue that the effects of climate change on companies' operations are now so tangible and certain that the issue is best addressed with the tools of the strategist, not the philanthropist. Reinhardt also posits, in another article, that success in a carbon-constrained world will be determined by innovation and acumen, requiring companies to make bold moves. Peter Schwartz explains that firms that do business in vulnerable regions can advance their interests if they help those areas adapt to global warming. Daniel C. Esty notes increasing pressure on corporations to reduce emissions, predicting that companies that fail to do so will face grave consequences. Andrew J. Hoffman says that corporations need to know what regulatory issues are at stake--and where. Alyson Slater of Global Reporting Initiative discusses the challenges and benefits of voluntary disclosure. Auden Schendler cautions companies buying up renewable energy certificates that they could end up tarnishing their green credentials. Theodore Roosevelt IV and John Llewellyn explain that virtually any firm in any sector can reap the benefits of investors' surging demand for green business ideas. Vicki Bakhshi and Alexis Krajeski show how climate change will affect businesses in the midterm. Maria Emilia Correa describes a key plank of the strategy at Masisa, a company in Chile, that is engaging B2B customers in efforts to become greener. Mark Way and Britta Rendlen explain why insurer Swiss Re is persuading employees to reduce their carbon footprints. HBR also provides a forecast of the extreme climate phenomena likely to occur in the future, and their expected repercussions on industry, agriculture, and settlements.

When new CEO Cheryl Tobin arrives at Hammond Aerospace, she picks up a faint scent of corruption. But if her predecessor broke the rules, her executive team isn't talking. Cautious about damaging reputations over nothing, she hesitates to make her concerns public. Is a private investigation warranted? Four experts comment on this fictional case study written by Joseph Finder, a best-selling author of corporate thrillers. Harry Brandon, an international business-intelligence specialist, helps firms get to the bottom of affairs like this one. Meticulous evaluation of documents and tactful tapping of insiders are crucial, he says, for determining whether laws have been violated. In a quarter of cases, there's no fire behind the smoke; in the rest, he finds flames. Christopher E. Kubasik and James B. Comey, of Lockheed Martin, offer Cheryl advice from the real-world aerospace industry: Go first to the vice president of ethics or, absent one, the folks who run the internal audit organization. Wherever that leads her, Cheryl's top goal should be to send a clear message that hints of wrongdoing will not be ignored. Eric A. Klein, a lawyer at Katten Muchin Rosenman who advises corporations and their boards, has a cardinal rule: Manage the process, not the crisis. He says Cheryl should find out how previous matters of ethics were handled at Hammond. She must also assess her legal responsibilities, weighing the potential costs and benefits of an inquiry. William J. Teuber, Jr., of EMC, says Cheryl should tap the wisdom of the board chairman, who has just recruited her. If an investigation is warranted, Teuber argues that external lawyers are best equipped for the job and that Cheryl should not keep digging for dirt on her own.

When new CEO Cheryl Tobin arrives at Hammond Aerospace, she picks up a faint scent of corruption. But if her predecessor broke the rules, her executive team isn't talking. Cautious about damaging reputations over nothing, she hesitates to make her concerns public. Is a private investigation warranted? Four experts comment on this fictional case study written by Joseph Finder, a best-selling author of corporate thrillers. Harry Brandon, an international business-intelligence specialist, helps firms get to the bottom of affairs like this one. Meticulous evaluation of documents and tactful tapping of insiders are crucial, he says, for determining whether laws have been violated. In a quarter of cases, there's no fire behind the smoke; in the rest, he finds flames. Christopher E. Kubasik and James B. Comey, of Lockheed Martin, offer Cheryl advice from the real-world aerospace industry: Go first to the vice president of ethics or, absent one, the folks who run the internal audit organization. Wherever that leads her, Cheryl's top goal should be to send a clear message that hints of wrongdoing will not be ignored. Eric A. Klein, a lawyer at Katten Muchin Rosenman who advises corporations and their boards, has a cardinal rule: Manage the process, not the crisis. He says Cheryl should find out how previous matters of ethics were handled at Hammond. She must also assess her legal responsibilities, weighing the potential costs and benefits of an inquiry. William J. Teuber, Jr., of EMC, says Cheryl should tap the wisdom of the board chairman, who has just recruited her. If an investigation is warranted, Teuber argues that external lawyers are best equipped for the job and that Cheryl should not keep digging for dirt on her own.

When new CEO Cheryl Tobin arrives at Hammond Aerospace, she picks up a faint scent of corruption. But if her predecessor broke the rules, her executive team isn't talking. Cautious about damaging reputations over nothing, she hesitates to make her concerns public. Is a private investigation warranted? Four experts comment on this fictional case study written by Joseph Finder, a best-selling author of corporate thrillers. Harry Brandon, an international business-intelligence specialist, helps firms get to the bottom of affairs like this one. Meticulous evaluation of documents and tactful tapping of insiders are crucial, he says, for determining whether laws have been violated. In a quarter of cases, there's no fire behind the smoke; in the rest, he finds flames. Christopher E. Kubasik and James B. Comey, of Lockheed Martin, offer Cheryl advice from the real-world aerospace industry: Go first to the vice president of ethics or, absent one, the folks who run the internal audit organization. Wherever that leads her, Cheryl's top goal should be to send a clear message that hints of wrongdoing will not be ignored. Eric A. Klein, a lawyer at Katten Muchin Rosenman who advises corporations and their boards, has a cardinal rule: Manage the process, not the crisis. He says Cheryl should find out how previous matters of ethics were handled at Hammond. She must also assess her legal responsibilities, weighing the potential costs and benefits of an inquiry. William J. Teuber, Jr., of EMC, says Cheryl should tap the wisdom of the board chairman, who has just recruited her. If an investigation is warranted, Teuber argues that external lawyers are best equipped for the job and that Cheryl should not keep digging for dirt on her own.

An entrepreneur and chief executive officer (CEO) of Sensible Life Products has developed a revolutionary botanical disinfectant called Benefect, the flagship product of his company. This new product is unique among disinfectant products in that it is non-toxic, unlike the majority of conventional disinfectants containing harmful chemicals, such as ammonia, alcohol and chlorine. As a result of the unique properties of the product, the CEO has received numerous offers to purchase or license the technology and is faced with the decision regarding which offer, if any, he should accept. The purpose of this case is to expose students to entrepreneurial exit situations as well as social entrepreneurship issues associated with disruptive technologies. A follow-up supplemental case, Sensible Life Products (B), product #907M58, introduces a fifth opportunity to the students in the form of a joint venture with a major product development firm. The deal involves Sensible Life Products cooperating in further developing the Benefect product into a consumer focused hand sanitizer product.

This supplement to Sensible Life Products (A), product #907M57, introduces a fifth opportunity in the form of a joint venture with a major product development firm. The deal involves Sensible Life Products cooperating in further developing the Benefect product into a consumer focused hand sanitizer product.

PlaNet Finance was a French NGO providing technical support and training services to microfinance institutions (i.e., institutions providing financial services to the poor) and other microfinance actors, rating of microfinance institutions and management, and advisory services to microfinance investors and investment funds. Furthermore, it was creating a network of microfinance banks through a microfinance holding company. However, in a context of rapid change and explosive growth of the microfinance sector, Jacques Attali, the founder and president, wondered whether PlaNet Finance's scope was sufficiently broad to fulfill its mission or, on the contrary, whether it needed to be narrowed in order to eliminate organizational challenges and external perceptions of conflicts of interest.

In 2006, AARP was one of the largest, most well known nonprofit organizations in the United States. Its membership base exceeded 38 million individuals, by far the largest nonprofit membership base in the country. In recent years, it had influenced major federal legislation on issues including Medicare, Social Security, and pension reform through a coordinated effort of professional lobbyists and grassroots volunteers numbering close to one million. In addition, AARP Services Inc, the organization's wholly owned, taxable (earned income activities) subsidiary, managed relationships with AARP-endorsed businesses that generated over $500 million in royalties from health insurance, life insurance, mutual funds, and other products--making it one of the largest social enterprises in the country. With activities in the commercial, charitable, and political arenas, AARP had adopted a truly cross-sector approach to achieving its mission to "enhance the quality of life for all as we age." Despite its size, influence, and visibility, AARP felt the public did not fully appreciate or understand the organization. In the face of growing public interest and media fascination with the application of business practices and market principles in the social sector--under the rubric of social entrepreneurship--AARP received relatively little attention from journalists, thought leaders, and academics for its enterprising approach. The organization also faced a public relations challenge over the fundamental principles of its cross-sector model. Left unchecked, AARP knew that such allegations, regardless of their validity, could undermine its ability to achieve its long-term goals. The organization also faced competitive challenges and the problem of increasing internal cooperation and synergy across the entire organization in order to improve its competitiveness and execute its social impact and member value agendas.

Describes two social ventures' experience of collaborating with each other through a replication project funded by Lemelson and the Schwab Foundations. Each venture served different purposes: IDEAAS installed and operated alternative solar energy equipment in locations without access to Brazil's electricity grid, and Saude & Alegria educated populations in the Brazilian Amazon jungle on matters of health, environment conservation, and self-sustainable wealth generation. The replication project entailed having Saude & Alegria help IDEAAS expand its service offering from the south of Brazil into the Amazon region. After describing the organizations, the replication project, and its results, highlights the core success factors that possibly led to the project's ultimate outcomes, allowing students to take positions and debate the critical success factors enabling the successful collaboration between social ventures.