Preparing Young Leaders to Solve the World’s Energy Challenges: Insights From Nine Business Case Studies Highlight Paths to a Sustainable Future
As we move further into 2023, it can take a lot of energy to think about energy. The world has a daunting task in front of us if we hope to limit global warming to the 1.5°C threshold (above pre-industrial levels) stipulated in the Paris Agreement. To achieve the Agreement’s goal of net-zero emissions globally by 2050, we must significantly boost energy efficiency and greatly accelerate the global transition away from fossil fuels, and toward new fuels such as green hydrogen and renewables such as wind, solar and thermal.
But many countries are struggling to achieve even modest reductions in carbon emissions, as reliance on fossil fuels in sectors like transportation, domestic heating, construction and other industrial processes remains high. And even if the leading countries that currently have net zero commitments do manage to achieve their goals, a 1.7°C temperature increase is still expected by 2100 as other countries transition at a slower pace, according to a McKinsey report.
Frankly, confronting the vast scope of the world’s energy challenges — and the dwindling time remaining to solve them — can leave one feeling less than energetic. So what should we do?
One thing that’s important to keep in mind is that things aren’t as bleak as they may seem. According to the International Renewable Energy Agency’s World Energy Transitions Outlook 2022, there has been key progress in recent years in moving away from fossil fuels and toward more renewables-based electricity. And if the rollout of renewables doesn’t happen fast enough to moderate global warming, carbon capture, utilization and storage can offer another solution. Meanwhile, experimentation with technologies like low-carbon hydrogen is beginning to show promise. And the recent resurgence of nuclear energy in the developed world reminds us that reliable, efficient, low-carbon power options already exist — though the nuclear power industry will require new, innovative technologies if it hopes to gain a foothold in the developing world.
But perhaps the most important reason for optimism about the global energy outlook is one that many people overlook: the emergence of a new generation of leaders and innovators who have the necessary skills, knowledge and dedication to solve the greatest challenge of our time. These young people have grown up under the shadow of climate change, and they rightly view it as a threat to their future. This has inspired many of them to choose career paths that will prepare them to tackle this threat head-on.
I believe most of our lasting energy and sustainability solutions will be crafted and managed by these future leaders — many of whom are currently pursuing degrees in higher education — including business school students who will eventually become the executives of a wide variety of public and private sector companies and organizations focused on reducing the effects of climate change. One of the most important teaching tools for these students are business case studies, because they allow them to develop the key skills of problem solving, quantitative and qualitative analytical thinking, decision-making, and coping with ambiguity — skills that will serve them well in designing the energy solutions of the future.
For over a decade, WDI Publishing, a division of the William Davidson Institute at the University of Michigan, has been publishing and disseminating business case studies to institutions around the world. Our collection of over 600 case studies put students in a variety of situations where they must solve an urgent dilemma experienced by an organization or company. Many of them address the obstacles faced by real companies in their quest to develop technology, products and services aimed at reducing emissions, combating climate change and achieving environmental sustainability.
I’ve selected nine energy-focused case studies from WDI Publishing’s collection, which are summarized below. They highlight some of the challenges of advancing sustainable solutions — while also running a profitable business. These case studies are available for purchase at 50% off their regular price through March 31, 2023, using the discount code ENERGETIC. (Note: You will need to create an account before you can purchase.) Most of these cases can be taught within multiple business disciplines such as leadership, strategic management, supply chains and marketing, to name a few — making them useful tools not only for emerging entrepreneurs themselves, but for the educators who are training them.
But to prepare our future leaders, we also need a constant pipeline of new cases that address energy innovations, especially in low- and middle-income countries. That’s why the William Davidson Institute is sponsoring the Energy Innovation in Low- and Middle-Income Countries Global Case Writing Competition, which aims to increase the number of academic business cases available about this very important topic. The winners of the competition will receive cash prizes ranging from $1,000 to $3,000. We invite you to submit your own cases (and teaching notes) by March 31, 2023: You can view the submission requirements here, and any questions can be sent to firstname.lastname@example.org
Volkswagen’s Clean Diesel Dilemma (Published 3.1.2016)
On September 18, 2015, the U.S. Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen (VW) Group, after it was found that the company had intentionally programmed turbocharged direct injection diesel engines to activate certain emissions controls only during laboratory emissions testing — not during actual use by consumers — using a “defeat device.” It turned out that the company had installed the device in 11 million cars worldwide, including 500,000 in the U.S., during model years 2009-2015, which meant these vehicles’ emissions were far greater than advertised.
This case explores how the company’s culture and corporate governance structure may have contributed to this crisis. In retrospect, how should the VW CEO have reacted to the news from the EPA? Were the sustainability measures and corporate social responsibility offices at VW simply engaged in greenwashing?
Tesla’s Battery Supply Chain: A Growing Concern (Published 4.22.2022)
In its 2020 impact report, Tesla said, “None of our scrapped lithium-ion batteries (LIBs) go to landfills and 100% are recycled.” Unfortunately, global recycling capacity for LIBs is in its infancy. Since large-scale production of Tesla vehicles only started in 2013, most of these vehicles are still on the road. But many expect that within the next few years demand for LIB disposal will rise sharply, and by 2030, 1.2 million tons of batteries will need disposal.
With environmental, social and governance reporting gaining momentum, how can Tesla remain a leader in sustainable enterprise, especially since its battery packs contained both toxic and rare earth metals? This case provides a history of electric vehicles (EVs), discussing the components of EV batteries, the EV battery supply chain and the process for EV battery recycling.
The University of Michigan Endowment Fund: Divesting from Fossil Fuels (Published 9.9.2020)
In September 2019, there were climate change strikes at the University of Michigan. Protesters demanded action on climate change, and among their concerns were the approximately $1 billion of fossil fuel investments in the university’s endowment fund portfolio. The university had previously formed the President’s Commission on Carbon Neutrality, whose task was to develop a set of recommendations on whether U-M should make a commitment to go carbon neutral. One of its goals was to reduce emissions to 25% below 2006 levels by 2025.
This case explores the thorny issue of whether entities like large, public universities can shift to more socially responsible investments, while still delivering the desired revenue.
Marathon Petroleum and Southwest Detroit: The Intersection of Community and Environment (Published 3.15.2022)
Over 25% of Marathon Petroleum’s 13 refineries are located in majority-minority communities, and its Detroit refinery is located in the ZIP code 48217, where around 80% of residents are Black, 12% are Hispanic and over 34% are considered to be in poverty. These residents also have higher rates of asthma, heart diseases and lung cancer than the residents of most other ZIP codes in Michigan.
To address concerns about its impact on 48217’s air quality and residents, Marathon Petroleum announced a Property Purchase Program that began in February 2021. This case explores the issue of environmental racism and who shares responsibility: Is it the oil company, the oil industry in general, the real estate market, zoning laws or other stakeholders?
SkySpecs: A New Horizon for Wind Energy (Published 7.15.2021)
SkySpecs is a company that helps the wind energy industry optimize the performance of wind farms, to improve productivity and efficiency and minimize downtime. It uses a proprietary drone system to automate the task of inspecting wind turbine blades and providing related analytics.
This case provides insights to entrepreneurs in nascent and growing industries who are grappling with how to grow their business, exploring the importance of strategy and value propositions, and the growth opportunities in expanding across different industries.
Interface: The Journey toward Carbon Negative (Published 3.23.2022)
Interface has been a leader in the carpet industry since the 1970s, and it is globally known for green innovations. In 2020, the company announced the launch of the first-ever carbon negative carpet tile. By combining observations of natural carbon cycles with principles of material science, Interface was able to create a carpet backing that doubled as a carbon storage material. This was possible because of the company’s use of bio-composites made from plant cells and other organic matter.
However, there are questions about whether the launch of this new product was the right decision for Interface. This case discusses the various factors that play a role in a corporation’s decision to go carbon negative, and how strong leadership can help push product innovation to reach this goal. It also explores the reporting dynamics of carbon accounting, and the motivations for companies to pursue environmental objectives such as carbon neutrality and negativity.
Mandalay Homes: Building Sustainable Innovation in Residential Construction (Published 7.7.2022)
Mandalay Homes, a home builder based in northern Arizona, is a market leader in energy efficiency-based construction. But it is at a crossroads as it develops a strategy for the future, as it is approaching the limit of the improvements it can make to sustainable homebuilding within its current paradigm.
Meeting the demand for residential and commercial buildings has a large impact on the environment due to land use changes, material consumption, operational energy consumption and water usage, and waste generation during the use phase of buildings. In 2021, the International Energy Agency found that, globally, the operation of buildings accounted for 30% of global final energy use, and 27% of total energy sector emissions.
This case explores how Mandalay’s future sustainability-focused strategy could take many paths, as the company grapples with the fact that it is pushing sustainability improvements without changing the actual behavioral aspects of how the U.S. housing market typically works.
Dell: Upcycling Ocean Plastics through Supply Chain Innovation (Published 6.18.2018)
Dell’s Ocean Plastics initiative was created as a result of research it conducted that proved that incorporating ocean plastics into its product packaging was not only feasible, but could also deliver meaningful cost savings over conventional sources of plastic — while diverting a substantial amount of waste from the oceans.
This case tracks Dell’s efforts to develop an open-source, scalable and cost-effective supply chain capable of delivering ocean plastics waste to its production facilities, and potentially to those of partnering companies through a consortium. It also explores several challenges to these efforts, allowing readers to understand the details of operationalizing an innovative supply chain.
Stripe: Encouraging Customers to Invest in Carbon Removal (Published 4.15.2021)
Should Stripe, a financial and Software as a Service company, get involved in carbon removal? The company is exploring innovative approaches to mitigating climate change, and when this case was written, it had recently launched a first-of-its-kind product, Stripe Climate, to enable business customers to individually divert a percentage of their credit card revenue to fund carbon removal technologies, with no additional fee paid to Stripe.
This case invites debate around the role of the private sector in advancing global climate change solutions. Although Stripe Climate does not (at least initially) generate revenue for the company, the case explores other compelling reasons for it to continue offering this new product.
Note: NextBillion is an initiative of WDI.
Photo courtesy of UNESCO-UNEVOC.