Applying classroom knowledge to solve real-world problems

Through the S-Lab class, students apply knowledge from the classroom to solve real-world problems and see firsthand how businesses are tackling the massive challenges of sustainability. In the process they develop and refine decision making tools that advance the sustainability field.

The analyses of the S-Lab teams help host organizations take action to improve social, environmental, and economic outcomes in the long-term. For a closer look at the 2016 S-Lab projects and their results, please check out this sampling.

Driving business value through sustainability at Allagash

The client: Allagash, the privately owned craft brewery located in Portland, Maine that distributed over 82,000 barrels of beer in 2015.

The challenge: The brewery is interested in benchmarking its current sustainability activities against industry standards and wishes to explore how to use sustainability as a value driver, as opposed to a cost center.

Our task: Create a framework for the company’s overall sustainability strategy that captures the company’s efforts, assigns priorities, and evaluates progress; analyze and map two of Allagash’s past energy efficiency initiatives; develop a framework to quantify impact and evaluate future opportunities.

Our approach:

  •  Interviewed a wide-cross section of Allagash employees, including its Green Team, to understand the company’s current sustainability efforts and initiatives.
  • Benchmarked Allagash against its competitors, and conducted research on sustainability within the alcoholic beverage industry to learn about the sector’s best practices around energy and water use and packaging lifecycle management.
  • Analyzed the company’s supply chain and sourcing efforts; evaluated its production and distribution system to identify opportunities for improvement.
  • Assessed the performance of the company’s new Freeaire refrigeration system in terms of its effect on total electricity consumption.

Key insights: Allagash has successfully embedded sustainability into its business model—but almost inadvertently. The challenge now is for Alllagash to provide clearer guidance in terms of its sustainability-oriented strategy, goals, and priorities, and to incorporate those more explicitly in its policies and materials. We recommend the company:

  • Conduct a materiality assessment so that efforts and initiatives can be ranked according to priority; pursue ‘low hanging fruit’ projects that deliver the most value per dollar invested in the short-term.
  • Research environmentally friendly packaging opportunities, such as thinner glass bottles, less cardboard, and eco-friendly inks.
  • Communicate sustainability values as part of brand communication to customers and employees.
  • Consider becoming certified as a B Corp, which allows companies to explicitly make business decisions with the wider community in mind.
 

Identifying a Brand Message for Socially Minded Clothier Alta Gracia

The client: Founded in 2010 in the Dominican Republic, Alta Gracia is the only apparel company in the developing world that has received an independent certification for paying its factory workers a true “living wage.”

The challenge: Alta Gracia wishes to gain a deeper understanding of how its target customers respond to its socially minded value proposition.

Our task: Determine the effectiveness of Alta Gracia’s strategy of differentiating itself on labor rights; discover new ways the company can leverage its value proposition to influence customers; recommend specific types of marketing messages that will motivate and engage apparel customers.

Our approach:

  • Developed a series of sustainability-related advertising slogans and messages to test on target customers in collaboration with Alta Gracia’s marketing team.
  • Identified the optimal means to test consumer attraction to these messages based on our ability to get a sufficient sample size, clear indication of interest, and measure and compare results with granularity. These criteria led us to run a Facebook ad campaign.
  • Aligned on the metrics necessary to evaluate message success. We selected click through rates (CTRs), which allowed us to differentiate the impact each ad achieved relative to the others.

Key insights: Our findings indicate that potential customers are concerned about labor rights for apparel. This is positive news for Alta Gracia—a company invests heavily in its employees, but has not yet gained a significant customer following. To capitalize on these results, we suggest the company:

  • Anchor its marketing communication around sustainability rather than generic brand claims.
  • Consider running additional ad campaigns on Facebook to drive awareness of the Alta Gracia brand and relative value proposition.
  • Continue to refine Facebook ad testing to help highlight the specific messages that would be most effective, as well as the target populations for each.
  • Run a purchase conversion experiment—either in store or through the forthcoming Alta Gracia ready­to­buy website—to help clarify whether interest translates into actual purchases.
 

Targeting Potential Landfill Wet Waste Markets for Advantek

The client: Advantek Waste Management Services, the oilfield waste management company that offers a portfolio of services, including recycling and treatment, disposal, and day-to-day monitoring of injection sites

The challenge: Advantek seeks to identify and target potential landfill wet waste (leachate) markets to apply its proprietary slurry injection technique, a waste management process that has lower costs and fewer short-term environmental risks.

Our task: Develop a framework for Advantek to systematically evaluate new markets; determine the best go-to-market strategies for the company from both a feasibility and profitability standpoint.

Our approach:

  • Conducted primary and secondary research on topics related to leachate markets, Advantek competitors, wet waste disposal technologies, and the environmental and regulatory landscape of the waste management industry.
  • Built a framework for decision-making that evaluates criteria including a potential site’s business and economic indicators, its regulatory requirements, and social and environmental considerations.
  • Created a scaled scoring system that ranks each site’s attractiveness and favorability for market entry based on the above metrics.

Key insights: Our framework provides a list of factors that Advantek ought to consider when selecting new markets to enter. As the company embarks on these critical business decisions, we suggest it:

  • Work to mitigate environmental and social risks related to slurry injection by developing a robust program that incorporates monitoring injection sites and all surrounding groundwater wells and preventing migration of slurry solids and chemical constituents into the local 
environment.
  • Continue to refine the framework’s regulatory criteria by determining appropriate weights for each category and making case-by-case decisions on whether Advantek ought to prioritize monetary gains, regulatory ease of entry, or environmental/social harm mitigation.
  • Consider expanding the scope of our framework to emphasize sustainability and other benefits provided by Advantek’s technology compared with competitors
  • Use this framework when considering new waste management revenue streams beyond landfills.
 

Seeking ESG strategies in Corporate Fixed Income with Breckinridge Capital

The client: Breckinridge Capital Advisors, an investment advisory firm in Boston, MA with approximately $24 billion in assets under management invested in primarily investment grade fixed income.

The challenge: At a time when institutional investors show increased concern over Environmental, Social, & Governance (ESG) risks in public markets, Breckinridge seeks to understand the potential for both risk mitigation and outperformance in fixed income portfolios based on sustainability-related criteria.

Our task: Leverage both quantitative and qualitative research methods to investigate alpha-generating ESG strategies in fixed income markets; make recommendations for managers of fixed income portfolios on how to identify smart, sustainable investment opportunities.

Our approach:

  • Conducted research on the relationship between financial returns and sustainability.
  • Embarked on a series of quantitative analyses to evaluate the relationship between ESG ratings and corporate bond spreads for investment-grade bonds.
  • Developed case studies on Harley Davidson and Peabody Energy that illustrate specific examples of the relationships uncovered through our data analysis.

Key insights: We found significant quantitative evidence that ESG scores are positively correlated with small stable spreads in corporate debt markets. This relationship also applies to other financial metrics such as Return on Assets (ROA) and leverage ratios. Furthermore, these relationships appear to strengthen during periods of market turmoil and persist throughout market recoveries. We recommend that fixed income managers:

  • Use ESG scores as high-level indicators of sustainability, as well as high-level indicators of reduced risk among corporate debt securities.
  • Take caution in applying correlations between ESG scores and credit spreads— there may be other idiosyncratic variables that outweigh the impact of ESG on credit risk. Mismatches between ESG scores and sustainability actions are observed in Peabody Energy case.
  • Continue to monitor and refine ESG criteria. We expect it will become increasingly relevant in the market’s determination of credit quality as ESG methods develop and the pressure for sustainability increases. 
 

Embedding Sustainability into B2W’s Corporate Strategy

The client: B2W Digital, the leading e-commerce company in Latin America with a portfolio that includes brands such as Americanas, Submarino, Shoptime, SouBarato, Digital Finance, Submarino Finance, and B2W Services

The challenge: B2W established its sustainability department in 2007 in an effort to reduce the environmental impact of its operations. Today, amidst financial and operational pressures, the company wishes to make sustainability an integral part of its business, and communicate its commitment to customers.

Our task: Provide B2W with concrete tools to pursue aggressive sustainability goals that have measureable positive strategic benefits; provide actionable recommendations on how the company can ensure those benefits are visible both internally and externally.

Our approach:

  • Undertook a benchmarking exercise of global firms that have successfully integrated sustainability into their broader company operations while simultaneously reducing costs.
  • Interviewed key stakeholders to assess the current state of B2W’s business, concerns, and interests; explored potential sustainability measures within the “cost-risk-revenue framework’ to understand the value each initiative.
  • Researched materiality assessment processes and mapping tools; identified material issues for B2W and contextualized them into possible corporate strategies.
  • Developed a case study on B2W’s packaging division.

Key insights: B2W has already had a great deal of success implementing sustainable initiatives that have led to substantial cost reductions. The company’s sustainability division ought to use these “wins” to tout the benefits of B2W’s sustainability both inside the organization and to customers. We suggest the company:

  • Incentivize department heads to review their internal processes and determine possible sustainability initiatives that can help reduce costs. For example, there is an opportunity to push for a zero waste strategy.
  • Encourage B2W managers to be more vocal about the progress made towards important sustainability goals and help employees set new objectives and create new projects that promote sustainability.
  • Engage company directors on sustainability measures that are key to investors’ and stakeholders’ interests; make the case that sustainability should be part of B2W’s corporate objectives and executive rewards.
 

Mitigating Climate Change Risks to the Mint Supply for Colgate-Palmolive 

The client: Colgate-Palmolive, the multinational consumer products company that sells soaps, detergents, and oral hygiene products, including toothpaste and toothbrushes. In 2015, the company had net sales of more than $16 billion

The challenge: Colagate wishes to gain a deeper understanding of the ways in which climate change threatens to disrupt the supply of mint—a key ingredient in many of its products—and determine how to mitigate that risk.

Our task: Assess how climate change may affect Colgate’s North American mint and Indian menthol supply chains in both the near-term and long-term; provide recommendations that help Colgate prepare for these potential climate-related impacts.

Our approach:

  • Developed a baseline understanding of Colgate’s mint and menthol supply chain through interviews with key company stakeholders and industry experts.
  • Conducted a review of climate research and tools related to future agricultural production and water availability.
  • Analyzed water risk projections specific to the Northern American and Indian regions where mint is grown and created a risk map for the mint and menthol supply chain.
  • Conducted benchmarking research on the supply chain risk mitigation strategies and initiatives of companies that, like Colgate, rely heavily on agricultural inputs to make their products.

Key insights: Climate change will undoubtedly affect global temperature, water availability, and crop yields within the next five to twenty years. While the specific impact climate change will have on mint is unclear, Colgate is wise to take action to protect its supply chain. We suggest the company’s procurement team:

  • Review the most updated climate data on an annual basis and overlay this with the work it is already doing tracking yields and crop competition.
  • Add long-term data on climate change into its risk mitigation strategy in order to create a robust, long-term plan to protect Colgate’s mint supply chain in the future.
  • Use this information to make long-term decisions about where to invest more heavily in order to ensure supply chain resiliency and continue to meet demand for Colgate products at reasonable costs.
 

Addressing Overfished Oceans with the Environmental Defense Fund

The client: The Environmental Defense Fund (EDF), one of the world’s largest environmental organizations

The challenge: To combat overfishing, EDF advocates the use of rights-based catch management systems, which provide fishers with incentives to promote the long-term viability of the fisheries in which they operate. EDF wants to expand these fishing programs to countries within Europe, Latin America, and Asia Pacific, but the group is unfamiliar with the political, economic, and social characteristics of those markets.

Our task: Devise a method for analyzing the socio-economic market forces that influence the proposed countries and regions; determine how to develop customized, market-based solutions for expansion; provide guidance on ways to improve current projects in the field by evaluating their efficiency and identifying gaps in performance.

Our approach:

  • Employed Michael Porter’s Five Forces framework to analyze the economic forces of each region’s fishing industry in order to determine their competitive intensity and attractiveness.
  • Undertook stakeholder analysis to understand stakeholder incentives and interactions, and to translate those needs within the context of architecting catch shares programs.
  • Created a dashboard analysis tool that evaluates and scores proposed fisheries across six dimensions, including stakeholder alignment, potential for investment, market readiness, among other things.
  • Developed a case study for Belize to both test the performance of our portfolio of tools and verify EDF’s current evaluation of the country

Key insights: With EDF’s support and technical assistance, rights-based catch management systems have been implemented in the US to broadly encouraging effect. While these systems could promote sustainable fishing practices in each of the world’s major fisheries, there are persistent challenges to implementation. We recommend EDF:

  • Form partnerships with NGOs in target countries to assist with the analysis and development of tools and research.
  • Test the catch shares model on Belize because fisheries there tend to be relatively more open to market changes that could increase the long-term sustainability of their industry.
  • Consider alternative solutions to catch share systems for regions that have poor institutional integrity and have weak legal and political frameworks
 

Assessing Opportunities for Recycled Cotton at Gap

The client: Gap, the clothing retailer that sells a range of products under the Gap, Banana Republic, Old Navy, Athleta, and Intermix brand names, that had net sales of approximately $15.8bn in 2015

The challenge: In an effort to reduce the energy and water use associated with cotton growing and clothing manufacturing, Gap wants to understand the potential opportunities and risks around using recycled cotton in its clothing.

Our task: Determine the extent of the challenges around recycled cotton, including its cost, quality, availability, and environmental impact; evaluate the viability of incorporating recycled cotton into Gap clothing; investigate the potential supply of recycled materials and the best available recycling technologies.

Our approach:

  • Carried out a series of interviews with Gap employees and external stakeholders to gain insight into the company’s supply chain, manufacturing processes, and the state of the textile industry as it relates to recycled cotton.
  • Conducted market research on how competitors incorporate recycling into their supply chains and how they price recycled garments; researched various cotton recycling techniques, including the Lyocell Method, a novel chemical method that dissolves cotton fibers.
  • Analyzed the challenges of implementing recycled cotton into Gap’s clothing collection, including the additional logistical complexities to its
 supply chain.

Key insights: Recycled cotton allows Gap to create quality products that enhance brand reputation and reduce the environmental impact of the textile manufacturing process. However, the use of recycled cotton will likely cause short-term costs to rise, reduce profit margins, and add organizational complexity. Prior to a full implementation, we recommend Gap:

  • Undertake research to understand customer attitudes with regard to recycled cotton, specifically whether they are willing to pay more for these garments.
  • Analyze the risks and opportunities associated with collecting used consumer apparel at Gap stores for the recycled cotton—while reversing the supply chain is expensive and complicated, it could offset the use of virgin cotton and reduce the impact of the manufacturing process.
  • Form strategic relationships with high-quality mills and recycling vendors that have the ability to scale to meet Gap’s large market base. 
 

Evaluating the Viability of Hydroponic Farms for Hannaford 

The client: Hannaford, the supermarket chain owned by Delhaize America that operates more than 180 stores in the Northeast and employs more than 27,000 associates

The challenge: In an effort to offer more locally grown fresh produce to its customers, Hannaford wants to launch a pilot self-contained hydroponic farm using the Leafy Green Machine (LGM) provided by Freight Farms.

Our task: Assess the financial viability of hydroponic projects for Hannaford; evaluate potential crop selection; determine whether the adoption of hydroponics is a sound long-term business strategy.

Our approach:

  • Performed financial and sensitivity analyses to evaluate the yield and harvest schedule of each hydroponics-grown crop in order to maximize cost savings.
  • Conducted field research and analyzed LGM data to establish the technical suitability of an organization-wide hydroponics system.
  • Analyzed the impact of introducing hydroponic products into the Hannaford value chain using the Sustainability Oriented Innovation (SOI) Evaluation framework.

Key insights: Sustainable, hydroponically grown produce holds a great deal of promise for Hannaford and other food retailers. However, integrating a hydroponic farm into an existing business model requires various system level considerations both internally (in terms of core capabilities) and externally (in terms of suppliers, communities, and customers). We recommend Hannaford:

  • Undertake further research on the repercussions of selling hydroponics-based produce both to understand the limitations of the technology and to reduce risk and unintended consequence related to the ecosystem of local farmers.
  • Embark on a detailed study to evaluate customer knowledge, behavior, and “willingness to pay” for hydroponically grown fruits and vegetables; analyze geographic information as customer trends vary from location to location.
  • Use the LGM to grow lettuce—especially romaine—as its lower cost and higher sales volumes act as a stress test for the pilot investment.
 

Engaging Companies in Sustainable Reporting with HIP Investor

The client: HIP Investor, a money management firm that manages investments to maximize both human impact and profits (HIP).

The challenge: Only about 10% of the 44,000 equities listed on global stock exchanges publish environmental, social, and governance (ESG) metrics; HIP investor seeks ways to incentivize small and mid cap companies in the US and Europe to begin reporting that kind of information.

Our task: Understand what motivates companies to report their ESG metrics; determine how to use that information to get the non-reporting companies to begin reporting, thereby widening the market for sustainable investments.

Our approach:

  • Developed a survey tool to gather information around both what causes companies to report ESG metrics, as well as why other companies choose not to report.
  • Analyzed results to understand the main incentives for reporting ESG information and identified opportunities to incentivize further reporting.
  • Generated a roadmap for how to further develop our pilot program and take the project to the next level.

Key insights: Until there is a better understanding of what ESG data signifies, companies will be reluctant to collect and disclose this information. Likewise, without a large number of companies reporting these metrics to create a set of standards, challenges to interpreting the ESG data remain. A two-pronged approach is necessary to address these key problems. We recommend HIP Investor:

  • Simplify the survey for non-reporting companies to ensure accurate information and data collection.
  • Build a web platform to collect survey information. This will make it easier to share the results and will inspire learning across companies.
  • Consult with the Global Reporting Initiative (GRI) in an effort to get more companies to report through the tool; the tool could even be further developed as a “pilot” for the GRI.
 

Reducing Carbon Emissions at JFK Airport with JetBlue

The client: JetBlue, the Fortune 500 airline headquartered in New York that offers an average of 900 daily flights. The company reported net income of $677 million in 2015.

The challenge: Since 2013, JetBlue has participated in the New York City Mayor’s Office of Sustainability Carbon Challenge—a voluntary program in which the city’s companies, universities, and hospitals commit to reduce their building emissions and collaborate to share best practices. This year, JetBlue wants to create a strategy for reducing CO2 emissions at its operations at JFK Airport Terminal 5 (T5).

Our task: Develop a specific target for CO2 emission reduction at JFK that JetBlue can formally submit to the Mayor’s Carbon Challenge; identify recommendations to meet this target; review the company’s existing practices and efforts in other airports.

Our approach:

  • Reviewed literature on building efficiency, on-site electricity generation, and strategies for reducing carbon emissions at airports.
  • Interviewed stakeholders and experts for insight into how to estimate current inventory of greenhouse gas emissions and how to estimate a reduction target.
  • Evaluated several options including: installing solar panels at JFK T5, purchasing electricity in the open market to procure renewable energy credits to offset local emissions, improving building efficiency, and purchasing ground equipment powered by alternative fuel vehicles.
  • Calculated cost and results for each of the potential solutions.

Key insights: Based on our findings, JetBlue has a potential to reduce its emissions related to the operations in JFK T5 by 26% in the next five years. To accomplish this, we recommend the company embark on several big changes. In particular, we suggest JetBlue:

  • Consider installing a solar panel system, which could generate roughly $600,000 of energy value per year, at the current price 10 cents per kWh.
  • Evaluate the wide range of intelligent building energy management systems to improve the operation and maintenance of its heating, ventilation, and air conditioning (HVAC) system.
  • Use light sensors to dim or turn off the lights during bright days in areas where natural lighting is available. We estimate that the potential energy savings for this solution will be around 2% of the current energy consumed in lighting.
  • Consider updating and/or converting current ground equipment to alternative fuel 
 

Measuring the Social Benefits of Green Design with P&A

The client: Payette is a 150-person architecture and design firm located in Boston that specializes in laboratory facilities and buildings; Arup is a multinational engineering firm specializing in engineering, sustainability, and structural design. Together as P&A, the company collaborates on lab projects that incorporate sustainability

The challenge: P&A has quantified the economic and environmental advantages associated with energy efficiency and environmental sustainability in buildings. Now it wants to understand the potential impact that sustainable lab buildings may have on occupant wellness, community resilience, and employee engagement

Our task: Expand the business case for sustainably designed labs by measuring the effect of green design on employee productivity, health, morale, and absenteeism.

Our approach:

  • Collected data from P&A to create a baseline 
for analysis; completed a literature review to extract best practices and recommendations.
  • Developed and conducted targeted surveys with 38 researchers who work in labs to 
understand behaviors and concerns.
  • Interviewed stakeholders familiar with green technology 
and occupant wellness measures.
  • Conducted subject matter expert interviews to gain perspective about occupant wellness in sustainable labs.

Key insights: Our findings indicate that the human benefits of green labs—which include proper daylight, thermal comfort, and fresh air—can increase employee productivity and morale. Quantifying the precise social advantages of sustainable design strategies is a challenge, but it is essential for calculating the return on investment. We recommend P&A undertake additional research to establish the benefits of these intangibles. In particular, the company should:

  • Introduce a system to measure employee satisfaction with their built environment—especially environmental aspects such as access to natural lighting and thermal comfort. Clear success metrics can help labs could determine whether they are designed correctly and have the appropriate feedback loop in place.
  • Conduct surveys to consider the factors that are most important to the people utilizing lab buildings.
  • Partner with a university or large biomedical pharmaceutical company to study this issue further. 
 

Helping Rare, the NGO, Enter the Impact Investment Industry

The client: Rare, an international conservation NGO based in Arlington, Virginia, that works to promote sustainable behaviors in rural communities. To date, the organization has worked on more than 350 projects focused on fisheries, freshwater, and agriculture in 57 countries around the world.

The challenge: Rare has grown to become a leading NGO through grant funds. It now wishes to scale the impact of its activities by entering the impact investment industry and needs assistance determining how best to structure its fund.

Our task: Create a decision-making framework for Rare to determine ideal fund formation taking into account its goals, resources, and culture; propose ways investors would access the fund as well as how Rare would market the fund.

Our approach:

  • Interviewed officials at leading nonprofits and impact investment firms to gain insight into strategic decisions around structure, investor access, and marketing.
  • Conducted research on impact investing to develop an understanding of current opportunities, challenges, and best practices.
  • Developed four categories of impact investing structures: off balance sheet, on balance sheet-integrated, on balance sheet-separate, and facilitator.
  • Evaluated options for Rare by considering tradeoffs across capacity, efficacy, and alignment.

Key insights: There is no one fund structure for all impact investors, but rather a series of considerations and tradeoffs that must be addressed over time as operations develop and capabilities change. Understanding these tradeoffs is key to success and may have a substantial influence on investment returns and/or the viability of the fund. In light of this, we recommend non-profits seeking to enter the space consider their biggest obstacles when evaluating fund structure and select the approach that best manages their acute potential shortcomings or uncertainty. We suggest they:

  • Consider using a facilitator model—which involves originating and organizing individual investments rather than raising an investment fund—to reduce the initial challenges of deal sourcing.
  • Consider using the on-balance sheet structure—which eliminates legal or functional walls between the funds and non-profit activities—for ventures concerned first and foremost with best vehicles for impact.
  • Consider using the off-balance sheet structure if most concerned about managing more than $30m in capital. 
 

Leveraging Sustainability as a Driver of Innovation

The client: Fortune 100 manufacturing company

The challenge: The company wanted to leverage sustainability as a driver for innovation by aligning its customers’ sustainability-related interests with its current capabilities in account management and product development.

Our task: Design a methodology to help B2B companies like it realize latent sustainability opportunities in key customer accounts; provide actionable recommendations on how to prioritize potential partnerships and collaborations.

Our approach:

  • Researched sustainability trends across relevant industries related to important customer accounts; determined a set of metrics that indicates the level of opportunity within each account.
  • Conducted primary and secondary research on customers with a goal of assessing each customer against the chosen criteria and creating “scorecards” and “sustainability profiles” that measure customers based on selected metrics.
  • Developed a process document in close collaboration with the company to determine how to best use the scorecards to effectively prioritize opportunities within the profiled universe of customers.

Key insights: For a company to use sustainability as a driver for growth, it must have a clear understanding of the dynamic sustainability priorities and challenges facing customer accounts. In addition, the company must have a consistent method for assessing the sustainability landscape and identifying and prioritizing potential partnerships. We recommend the company:

  • Explore possible opportunities for customer collaborations by looking for gaps between a customer’s sustainability performance vs. its stated goal; seek value creation opportunities by looking for alignment between a customer’s sustainability goals and company’s targeted area of revenue.
  • Be vigilant about reevaluating scoring criteria to help shape more robust metrics over time; carefully document this process to assist and encourage continued assessments.
  • Use our methodology to create a similar system to better understand and measure the sustainability interests of a range of stakeholders, including suppliers, partner organizations, funders, and others.
 

Identifying Opportunities for Lockheed Martin’s Flow Battery

The client: Lockheed Martin, the world’s largest defense contracting company that employs over 112,000 people around the globe

The challenge: Lockheed Martin wants to grow its presence in the energy storage market with its flow battery technology. (Flow batteries operate at low temperatures, have nearly infinite charge and discharge lifetimes, and excellent economies of scale; however, they are structurally complex and have relatively high upfront cost.)

Our task: Evaluate potential market opportunities for LM Energy’s flow battery technology; develop the “sustainability case” for flow batteries; create a framework for LM Energy to evaluate potential acquisitions.

Our approach:

  • Interviewed stakeholders and experts in the field to gather insight on LM Energy’s current position and its competitors.
  • Researched the role energy storage plays in environmental sustainability.
  • Conducted a comparative analysis of flow battery applications and other battery technologies in the market; investigated potential customer relationships and partnerships for LM Energy to continue its growth.
  • Explored ways LM Energy can complement its current technology and expand market share in the clean energy sector by developing a set of priority criteria for strategic acquisitions.

Key insights: LM Energy has the reputation and the positioning to build a strong customer base in the energy storage market with its flow battery technology. We recommend LM Energy:

  • Pursue opportunities in some international markets—we see select European markets as particularly compelling; however, we do not recommend emerging markets where the electric power infrastructure is not sufficiently developed.
  • Assess potential acquisitions using our four-pronged framework that evaluates targets based on their Technology Readiness Level (TRL), ability to complement Lockheed’s existing customer base, finances, and values related to Lockheed’s priorities.
  • Monitor proposed policy in U.S. states to raise the greenhouse gas emissions factor for technologies seeking to benefit from policies such as Self-Generation Incentive Program (SGIP). If passed, these types of laws present a significant opportunity for the continued growth of the energy storage market. 
 

Reducing Carbon Emissions at JFK Airport with JetBlue

The client: JetBlue, the Fortune 500 airline headquartered in New York that offers an average of 900 daily flights. The company reported net income of $677 million in 2015.

The challenge: Since 2013, JetBlue has participated in the New York City Mayor’s Office of Sustainability Carbon Challenge—a voluntary program in which the city’s companies, universities, and hospitals commit to reduce their building emissions and collaborate to share best practices. This year, JetBlue wants to create a strategy for reducing CO2 emissions at its operations at JFK Airport Terminal 5 (T5).

Our task: Develop a specific target for CO2 emission reduction at JFK that JetBlue can formally submit to the Mayor’s Carbon Challenge; identify recommendations to meet this target; review the company’s existing practices and efforts in other airports.

Our approach:

  • Reviewed literature on building efficiency, on-site electricity generation, and strategies for reducing carbon emissions at airports.
  • Interviewed stakeholders and experts for insight into how to estimate current inventory of greenhouse gas emissions and how to estimate a reduction target.
  • Evaluated several options including: installing solar panels at JFK T5, purchasing electricity in the open market to procure renewable energy credits to offset local emissions, improving building efficiency, and purchasing ground equipment powered by alternative fuel vehicles.
  • Calculated cost and results for each of the potential solutions.

Key insights: Based on our findings, JetBlue has a potential to reduce its emissions related to the operations in JFK T5 by 26% in the next five years. To accomplish this, we recommend the company embark on several big changes. In particular, we suggest JetBlue:

  • Consider installing a solar panel system, which could generate roughly $600,000 of energy value per year, at the current price 10 cents per kWh.
  • Evaluate the wide range of intelligent building energy management systems to improve the operation and maintenance of its heating, ventilation, and air conditioning (HVAC) system.
  • Use light sensors to dim or turn off the lights during bright days in areas where natural lighting is available. We estimate that the potential energy savings for this solution will be around 2% of the current energy consumed in lighting.
  • Consider updating and/or converting current ground equipment to alternative fuel