By Raphael Meyer, MBA/MS Intern, Corporate Partnerships Program, EDF
I’ve spent this summer working for EDF’s Corporate Partnerships Program, which I’ve found out is essentially the real-life version of my dual degree graduate program at the University of Michigan’s Erb Institue for Global Sustainable Enterprise. Not surprisingly, the people I work with are just as interesting, the problems we’re trying to solve are just as challenging, and the energy going into it is just as intense as my graduate school experience.
EDF engages big corporations to create environmental innovations and improve environmental performance. It is focused on high-profile, high-impact partnerships – working on everything from greening Walmart’s supply chain, to reducing FedEx’s fleet emissions, to putting top-tier MBA students in big companies for the summer to find practical, actionable energy savings.
In addition to working with Fortune 1000 companies, EDF is looking at other, lighter-touch ways to promote energy efficiency. For example, it has a strong Climate Corps Public Sector program, a rapidly growing effort focusing on energy efficiency initiatives in public organizations like universities and local governments. At the same time, members of EDF’s Energy program are working with the West Oakland Environmental Indicators project to analyze ways to improve energy usage in West Oakland, CA. EDF also recently partnered with the port of Houston to develop an innovative method for providing funding to truck drivers to buy or upgrade to newer, more fuel-efficient trucks.
As for me, I’ve spent the summer looking at opportunities for EDF to engage Minority Businesses Enterprises (also known as MBEs, the official classification for companies with a minimum 51% ownership by one or more minority American citizens) on energy efficiency projects. The problem is daunting and undefined – perfect for a summer internship. The goals and potential benefits for EDF are two-fold:
- As with any CPP project, the project seeks significant GHG reductions. Simply spending money to focus on one or two small MBEs with low energy impacts will not suffice.
- CPP seeks to engage communities that it has not traditionally reached, one of which is the MBE space. Doing so will allow CPP to strengthen its ties with rapidly growing and increasingly influential minority populations while also building on the momentum of its successful lighter-touch partnerships. My project aims to learn more about these MBEs and find the ways that work in partnering with them to reduce their energy usage.
A little background on the MBE space
In 2007, of nearly 5.8 million companies nationwide with at least one employee, about 25% were minority-owned. That’s nearly 1.5 million companies with which to do business, so one would think the possibilities are endless. Unfortunately, it’s not that simple. The MBE space is vast and heterogeneous. MBEs come in the mom & pop variety, the multi-billion dollar variety, and everything in between. Some have already thought long and hard about energy and sustainability, while others know they must eventually adapt to the realities of a resource-depleted world but are just concerned with making it to next month right now.
EDF believes that energy efficiency makes sense from an environmental and economic perspective. Any good business school student knows, however, that a potentially great product or idea is worthless without a proper understanding of the market, relationships with key players, and a sound go-to-market strategy. Figuring out how to bring EDF’s vision of energy efficiency to MBEs is no different. For each group of companies I can think of partnering with, there are countless chambers of commerce, non-profits, and corporate supplier diversity departments already working hard to improve the outlook for MBEs.
Where to start?
At this point, we’ve developed and analyzed a list of ideas for partnering with MBEs. Since small businesses make up the vast majority of the MBE space, we’ve examined devoting our time and resources to partnering primarily with small MBEs. But given that EDF has not historically engaged smaller companies, we would have to make an especially strong case for it. Furthermore, small businesses don’t use a ton of energy, so we would have to work with a large number of them to guarantee that we would see significant impacts. Let’s also not forget that small businesses have several options available today; for example, the Small Business Administration has how-to guides for small businesses pursuing energy retrofits. Utilities such as SDG&E and PG&E provide their customers with options as well. There are also plenty of consultants vying for this business.
Alternatively, we’ve explored pursuing an EDF Climate Corps model, working with some of the bigger MBEs who, like EDF Climate Corps’ current participating companies, own and operate many buildings with high energy usage. We would likely achieve significant potential energy savings, as well as proof that such a model can work not only in the Fortune 1000 world and the public sector, but also in the large MBE space. But how would this address our goal of reaching out to a new business community?
Otherwise, we’ve looked into working with one or two big corporations that maintain diverse supply chains and are committed to reducing their environmental footprints. This would allow EDF to interact with a large number of MBE suppliers, many of which would be small businesses. But this would lead us to add yet another layer to the supplier-purchaser relationship; this relationship is already complex, with purchasers most concerned about the quality of the products they’re purchasing and the reliability of the subsequent service.
Fortunately, every day I get to talk with people working with or for MBEs in a variety of capacities. Each of them is solving a problem of some sort – promoting a diverse supply chain within a big corporation, installing energy efficient lighting in small businesses, running seminars on sustainability. What makes my job fun is figuring out where EDF fits into this. What more could an MBA intern ask for?