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Blog | Tuesday January 17, 2017

Driving Collective Action on Women’s Empowerment

Preview

On January 21, hundreds of thousands of women are expected to descend on Washington, D.C., to march in solidarity for women’s equality and to send a strong message to the new administration that women’s rights are human rights and that discrimination of any kind will not be tolerated.

This activism exemplifies the global movement underway around women’s empowerment, which seeks to illuminate the continued struggles women face fighting for their rights, equality, and safety in the workplace, at home, and with respect to their own bodies. Women fight these battles daily—battles that manifest quietly when a woman hesitates whether to go for that promotion or, more visibly and violently, when women are harassed or violated at work or at home. The march on Washington also exemplifies the collective power women—and men—have when they come together to demand change.

For the business community, there is a lot that can be learned from grassroots movements that start with determined individuals and transform into powerful tidal waves of change. Leaders who are willing to be the first to make a bold commitment, invest in unlikely partnerships, or set wildly ambitious targets are our trailblazers. But they can’t do it alone. The challenges facing business today—and those particularly related to women’s progress—transcend any one company, sector, or even the business community as a whole. 

Last year, my colleagues drew attention to the need for effective and ambitious business action on women’s empowerment. Recognizing that investing in women is a business opportunity as well as imperative from a moral standpoint and to development outcomes, companies have started making significant commitments to advance progress for women. Now is the time to take these commitments to the next level. There is much more the business community can achieve by working together to harness the potential presented by women’s advancement. And the business community can’t act alone. Partnerships across sectors and with stakeholders, including national and local governments and women’s funds and grassroots organizations, are essential for tackling the multidimensional barriers that hold women back, scaling solutions, and creating meaningful impact.

Within this context, BSR—in partnership with Win-Win Strategies and supported by the Dutch Ministry of Foreign Affairs—ask you to join us as we launch Business Action for Women, a collaborative initiative for companies aimed at driving collective action on progress for women.

At the core of this initiative, a business call to action will align companies around an aspirational vision for what companies hope to achieve through their participation in the group. Companies will also contribute to a shared measurement framework that will help them to measure individual and collective progress.

Moving the needle on critical women’s empowerment issues requires focused collaboration and scalable partnerships. Through company workshops and consultations, we’ve determined three broad areas where companies believe they can make the greatest impact given operational footprint, available assets, current programming, and opportunities for influence.

1. Advancing Women in Supply Chains: Companies across sectors struggle with female advancement at middle-management levels across the value chain. A McKinsey study found that fully closing gender gaps at work would add up to US$28 trillion in annual GDP by 2025. Through Business Action for Women, we propose focusing on the supply chain, providing a platform for companies and key stakeholders to come together to address the greatest barriers to women’s advancement.
2. Building Resilience on Raw Materials: Women have a unique role to play as change-makers to address current and future climate-related environmental challenges. However, today women are disproportionately impacted by climate change, with studies showing that women are 14 times more likely to die during a disaster. They are also dramatically underrepresented in the renewable-energy sector, comprising only 20 percent of the workforce. There is untapped potential for women to drive solutions related to adaptation, mitigation, and resilience. Climate solutions also present opportunities for collaboration among sectors such as consumer goods, food and agriculture, technology, and financial services to drive holistic solutions for women’s empowerment.
3. Eliminating Gender-Based Violence: Tackling gender-based violence is crucial to progress on every other women’s empowerment issue. As my colleague Marat Yu pointed out, violence against women is one of the world’s greatest social, economic, and public-health problems. Not only does it violate women’s human rights, but it also negatively affects business. Despite recognizing gender-based violence as a pervasive issue, companies are often uncertain how to take action. Business Action for Women will provide a platform for broad coalition-building to drive advocacy and policy efforts and tackle adverse norms that condone violence.

BSR will partner with group members to further define the focus areas and develop specific action plans for each cluster during the first half of 2017.

Collaboration and partnerships are at the center of this initiative. Under each of the action clusters, we will seek out partners to align our efforts, avoid duplications, and connect to existing solutions wherever possible. Our partnership with Win-Win Strategies will ensure that women’s voices are the center of all of the work we will do. We also plan to leverage our partnership with the Deliver for Good campaign to link our efforts to work being done by leading women’s NGOs and international organizations to advance the Sustainable Development Goals. For companies already taking action on one of the 12 investment areas, we encourage you to sign on to the campaign to show your commitment now.

Business Action for Women is a three-year initiative that launches this month. We hope you will join us and your peers as we do our part to contribute to a global movement to advance equality and progress for women.

To learn more about Business Action for Women, join our webinar on Wednesday January 25 from 8-9 a.m. PST/11 a.m.-noon EST/5-6 p.m. CET or contact Elissa Goldenberg (egoldenberg@bsr.org) for more information.

Blog | Thursday January 12, 2017

Responsive and Responsible Leadership: A Look Ahead at Davos

Preview

The year 2016 will go down in history as the year when elites and powerful institutions were delivered a sharp blow, not least through the Brexit vote and Donald Trump’s ascendance. In this context, what are we to make of 2017’s World Economic Forum annual meeting, kicking off next week in Davos, perceived by many as the ultimate gathering of world elites?

The theme of this year’s Davos is “Responsive and Responsible Leadership.” Responsive leadership requires that we listen to the aspirations and concerns of all our fellow citizens—including understanding and responding to the very real concerns expressed on the streets and in the ballot boxes in 2016. But let us also remember that responsible leadership, the other part of the equation, means defending principles that these same voters appear to have rejected.

The exercise of power in the post-financial-crisis world certainly leaves much to be desired. Income inequality continues to grow; too many people are excluded from power based on their gender, race, or other characteristics; and we continue to see blatantly unethical actions by institutions and leaders from the public and private sectors.

All this culminated in unexpected election results in two critical democracies, which in turn has led to the sudden rediscovery of the communities, needs, and perspectives that asserted themselves at the ballot box with a loud cry for change.

While this is the definition of responsive leadership, there is a huge risk, however, that in doing so, we will forsake crucial principles that should guide us politically, culturally, and economically.

After all, it is not elitist to stand up for human rights.

It is not elitist to defend climate science.

It is not elitist to embrace open societies—and, yes, open borders.

It is not elitist to demand respect for all people, nor to recognize that women, people of color, immigrants, and others have too often been failed by our economic and justice systems.

It is not elitist to defend journalists who seek the truth.

It is not elitist to consider the well-being of people across the globe (while also giving full attention to communities closer to home).

It is not elitist to call out leaders who give license to merchants of hate.

It is not elitist to expect that informal norms of civility and fairness be the guide star for all leaders.

So, as we welcome 2017, let us not only focus on power dynamics or the clarion call for change expressed by voters. The real question we face is whether all of us, as citizens, workers, politicians, or business executives, will defend essential values and principles. This is what responsible leadership demands, now more than ever.

Blog | Monday January 9, 2017

Sustainable Business Leadership in 2017: Game On

Preview

At the start of last year, we were still riding the highs of 2015, which saw important progress on sustainable business. The year just past, 2016, for multiple reasons, was less positive. How will 2017 break the tie?

Let’s start by looking back to where we were a year ago. Here’s the good news: The twin successes of 2015—the Sustainable Development Goals and Paris Agreement—set a powerful long-term agenda for decades of progress. But as the year unfolded, this sense of progress dwindled as we witnessed the Brexit vote, refugee crisis, and terrorist attacks in Europe; the Trump election in the United States; and declining support for civil society around the globe.

And yet, serious though they were, the events of this past year need not represent the new normal. Looking ahead to a new year with new conditions, here is our suggested playbook for how business can lead in this new environment.

Stay true to the values underlying sustainable business: As I wrote in the immediate aftermath of the U.S. election in November, it is essential during times of change to stay true to enduring values and principles. Sustainable business is premised on respect for people and communities, basic fairness in the economy, and preservation of natural resources and the environment to ensure prosperity for future generations. These values continue to guide us at BSR and underpin all our work with member companies and other partners. Indeed, the 2016 U.K. and U.S. election results in many ways reinforce, rather than contradict, the importance of economic fairness, even though the results may not deliver the outcomes many of us want. Our values will continue to serve as a north star throughout 2017.

Increase the commitment to economic fairness: Just as we remain steadfast in our values, we cannot be blind to the anger and resentment expressed by many during the past year. We need to acknowledge the views of many that our economies do not enable all to participate fully. The sustainable business agenda therefore needs to prioritize economic fairness more fully. This means attention to multiple issues, including inclusive economic growth, preserving quality jobs in the age of automation, gender equity, and executive pay. In 2017, BSR will be expanding our efforts in inclusive economy issues, along with new ways of looking at the connection between environmental sustainability and jobs.

Accelerate irreversible changes to the energy system: While the apparent hostility to climate action from the new American administration is highly problematic (and unwise), progress on climate will continue for a number of reasons. First, the cost of renewables is plummeting, and new technologies are improving on a similar pace, creating an unassailable economic argument for continuing the transition to low-carbon models. Second, new business models (such as distributed energy systems) and new products (such as longer range electric vehicles) are coming into the mainstream. Third, many of the highest growth markets—think China—remain steadfast in their commitment to a shift to cleaner energy. Finally, states and regions have no intention of making a U-turn on their shift to low-carbon models, regardless of Washington’s policies or Europe’s dysfunction. For these reasons and more, the vision of the Paris Agreement remains not only intact, but vibrantly alive. BSR will continue to aid companies on their own climate strategies, as well as to work through partnerships like the Renewable Energy Buyers Alliance and We Mean Business to ensure that progress continues.

Promote innovation: The nostalgia for past grandeur that is driving politics in many parts of the world misses the point. New business models, new technologies, and new ways to access products, services, and experiences are changing fast. The pace of change may be distressing for many, but the essential nature of change is on balance positive, and is essential to truly inclusive growth that the past never achieved. As BSR looks to redefine sustainable business in the year ahead, we will explore how to build on new models (such as the inclusive sharing economy), new products and services (such as access to renewable energy), and new partnerships (such as the Global Impact Sourcing Coalition) to advance new solutions to ongoing sustainability challenges.

Raise the voice of business: Finally, in our new political environment, the voice of business needs to remain strong and clear about the importance of sustainability. Business is global, and despite market pressures, smart companies make decisions intended to last well beyond the next election. As we have noted since the success of the Paris climate negotiations in late 2015, the private sector can do itself and wider society a favor by reminding policymakers of the importance of the sustainability agenda. BSR will work with our member companies in the year ahead on climate advocacy, the protection of human rights, and the development of reporting and market frameworks that advance long-term value creation.

All in all, despite the multiple shocks of 2016, we see many reasons for optimism. And yet, optimism unmatched by commitment is an empty wish. With that in mind, let us redouble commitment to building a just and sustainable world, based on core principles, and with strategies that are adapted for changing realities and that address the very human aspirations underlying the turbulence of 2016. In doing so, we will see ongoing progress and reason for renewed optimism at the end of this pivotal year.

Blog | Friday January 6, 2017

Five Ways the Financial Services Industry Can Approach the Sustainable Development Goals

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It is estimated that the Sustainable Development Goals (SDGs), adopted in late 2015, will cost between US$90 trillion and US$120 trillion by 2030. In this light, there is no doubt that the financial services industry has a role to play in funding the objectives. There are many opportunities for investors and banks to fund the SDGs, and in the past year, banks and other companies have explored what these global goals mean to them.

The 17 goals provide a useful reference for banks and other financial services companies to understand and measure how they contribute to sustainable development. Financial services companies, including institutional investors, banks, and credit card companies, should look at how to integrate the SDGs into communications, stakeholder engagement, goal setting, impact measurement, and partnerships.

All 17 of the SDGs require funding. But with 169 targets, the goals are not easy to navigate. To address this, financial services companies can choose to focus commitments on a small number of goals on which they have the most impact. These are the goals closest to their core business—rather than niche business, internal efforts, or philanthropic efforts—and that represent an opportunity, such as funding affordable and clean energy (Goal 7), rather than managing a risk, such as ensuring investments do not harm the oceans (Goal 14). Following a review of what financial services companies are currently focusing on, we found that the most relevant SDGs for the financial services sector are Goal 1 (no poverty), Goal 5 (gender equality), Goal 8 (decent work and economic growth), and Goal 13 (climate action).

In the past year, some financial services companies have used the SDGs to communicate, engage, set new goals, measure impact, and build new partnerships. Financial services companies should think about how to integrate the goals into these five areas:   

1. Communications: The SDGs provide a framework to communicate on how financial services companies contribute to economic development and the creation of jobs. For instance, MasterCard communicates on how its core business supports and advances five specific SDGs. And Credit Suisse published a paper on how it contributes across the SDGs with case studies on four specific goals.
2. Engagement: Banks can use the global goals as a platform to engage stakeholders—including staff, clients, regulators, and NGOs. For example, Standard Chartered launched a campaign to raise awareness among employees and clients about the SDGs. Credit Suisse held workshops in Zurich and Hong Kong with government agencies, development banks, and civil society to identify priorities for action.
3. Goal setting: Some investors and banks are using the SDGs to set new goals. The Dutch Pension funds PGGM and ABP have set ambitious targets to invest €58 billion in investments that support the SDGs by 2020. BNP Paribas tracks the percentage of corporate loans granted to businesses that made a specific contribution to the SDGs and has a goal to maintain this key performance indicator at 15 percent for the next three years.
4. Impact measurement: Additionally, the goals provide a proxy for measuring impact. For instance, when MasterCard sets out to reach 500 million people previously excluded from financial services by 2020, it helps to know that Goal 1 specifies that it hopes to ensure 2 billion unbanked people receive a bank account. Investors should be wary of the risk of “SDG-washing,” if they are too quick to label funds as supporting the goals, without measuring impacts. Investors should have clear common guidelines on what constitutes an SDG investment and should measure the impacts of their investments.  
5. Partnership building: Partnerships are key to the success of the SDGs. The goals can help galvanize a broader community and bring new partners to the table such as governments, multilateral institutions, and clients. For example, a MasterCard partnership with UN Women aims to drive financial inclusion of women. With its pilot in Nigeria, the partnership will provide half a million Nigerian women with identification cards that include electronic payment functionality. Barclays has built longstanding innovative partnerships with clients such as GSK and NGOs such as Care International to support access to healthcare and financial services.

The SDGs represent a strong framework for companies to use in defining sustainable development commitments. Banks and other companies should seize the opportunity to align their business strategies to the goals. This also includes moving beyond the important first step of communicating on what a company is doing to setting new commitments on investing in sustainable development solutions and measuring the impact of these investments. 

Blog | Thursday January 5, 2017

A Conversation with Joel Makower and Mark ‘Puck’ Mykleby at the BSR Conference 2016

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In a plenary session moderated by BSR CEO Aron Cramer at the BSR Conference 2016, Mark "Puck" Mykleby and Joel Makower highlighted bold ideas presented in their book, The New Grand Strategy.

"Ask people what kind of world they want for their kids and they will speak in the language of sustainability," Mykleby said. Mykleby is codirector of the Strategic Innovation Lab at Case Western Reserve University and a retired colonel of the U.S. Marine Corps. Makower is chairman and executive editor of GreenBiz Group Inc.

Watch the full video below:

The BSR Conference 2016, which took place November 1-3 in New York, gathered sustainability leaders from business, government, and civil society to explore the theme of “Be Bold.” Check out the conversation on Twitter at #BSR16 and see all video highlights on BSR’s YouTube channel.

Blog | Monday January 2, 2017

Thinking the Unthinkable with Nik Gowing

Preview

In a plenary address at the BSR Conference 2016, Co-Author of Thinking the Unthinkable, Visiting Professor at King’s College London and Nanyang Technological University, and former BBC news anchor Nik Gowing explored how being bold can help build a better world.

“It’s not really the company, it’s actually the human beings inside,” Gowing said.

Following his address, Gowing joined a conversation with former Natura CEO and BSR Board Chair Alessandro Carlucci and BSR Non-Executive Board Director Karina Litvak and answered live questions from BSR Conference participants and Twitter.

Watch the full video below:

The BSR Conference 2016, which took place November 1-3 in New York, gathered sustainability leaders from business, government, and civil society to explore the theme of “Be Bold.” Check out the conversation on Twitter at #BSR16 and see all video highlights on BSR’s YouTube channel.

Case Studies | Tuesday November 22, 2016

Instituto Avon and Fundo ELAS: Speak Out Without Fear Fund

Preview

This case study was developed by Win-Win Strategies in support of the Investing in Women initiative, a collaboration platform providing companies with opportunities to share, learn, and design effective approaches to women’s empowerment.

Background

The partnership between the Instituto Avon in Brazil (Avon) and Fundo ELAS (ELAS) grew out of a common interest in addressing violence against women. The issue of domestic violence has long been at the center of Avon’s social investment strategy, as it is critical to its largely female employees and customers. ELAS, with its focus on investment in women’s leadership and rights, has supported numerous women’s organizations in Brazil that have worked for many years to address the issue of gender-based violence and create social change.

In 2009, Amalia Fischer, then executive director of ELAS, was invited to speak at Avon about ELAS’ work. Following that meeting, Avon and ELAS began working together to develop a partnership aligned with both organizations’ goals. This partnership led to the development of a fund called Fundo Fale Sem Medo, or the Speak Out Without Fear Fund, which is now in its third year.

Together, Avon and ELAS designed the launch of the fund and completed all supporting communications and strategy. As part of this partnership, ELAS runs a competitive process each year to award grants to projects designed by local women’s organizations that utilize innovative approaches to address the issue of domestic violence.

The program is currently funding 31 organizations, with projects ranging from a rock music festival that highlighted women’s rights and domestic violence prevention, to a program that uses sports as a vehicle to teach girls about their rights and help prevent violence. The program also provides workshops on how to reduce gender-based violence and brings the grantee organizations together for capacity-development and to foster collaborations among them.

The Strategy

The decision to support ELAS was based on Avon’s view that to address an issue like domestic violence, it was important to work with strategic players with credibility and a proven track record. This type of relationship is core to Avon’s approach of working in partnership with other organizations and with NGOs with direct links to the issues of interest to Avon.

Avon and ELAS share the perspective that the most appropriate and effective strategies to end violence against women are those that involve local women’s organizations. In working with ELAS, Avon has a partner with knowledge of these organizations, experience in the community, and the ability to support locally relevant solutions. As Lirio Cipriani, the executive director of the Avon Institute noted: “In order to face this pressing, challenging, and widespread issue, we must cooperate with strategic players in a coordinated manner. Supporting women’s organizations is essential; we recognize that their work has led to important institutional transformations and strengthened the support network that can serve women in violent situations.”

Over three years of funding to ELAS, Avon has supported 77 projects to fight domestic violence in Brazil, and ELAS has received a total of 7 million Brazilian reals (equivalent of more than US$2 million) from Avon to support the selected grantee projects. During the project period, in addition to written progress reports, ELAS and Avon have held regular face-to-face and virtual meetings, working together in a transparent manner to monitor the projects, develop and revise assessment tools, and ensure effective collaboration.

Two key factors were highlighted as contributing to the success of the partnership:

• ELAS and Avon have shared values and a shared interest in social investment to support social transformation and women’s empowerment. In particular, they both believe that empowering and financially supporting local women’s organizations is an important strategy to stop violence against women.
• ELAS and Avon each appreciated each other’s mission and expertise. ELAS reported that Avon understood the experience and knowledge that ELAS brought to the table. ELAS also reported that it knew of the work that Avon was doing to empower women and valued its commitment to end violence against women, reflected in Avon’s other partnerships with the public sector and civil society.

Impact

Both parties are inspired by the work they have been doing together to address the issue of domestic violence in Brazil and have seen positive impacts on women in the organizations reached. Nonetheless, Avon identified measuring impact as a challenging area, as specific measurement indicators were not part of the first and second years of the Speak Out Without Fear Fund. To address this, in the third year of the fund, Avon and ELAS jointly developed a set of behavioral indicators, such as the number of people engaged and affected, and public-policy-related indicators, such as the number of policies initiated or driven by the project.

Lessons Learned

The case study findings highlight the importance of co-creation of indicators and evaluation tools and the challenges in doing so. Because the size and nature of projects varied greatly, it was difficult to measure their impact with common indicators. Furthermore, it was challenging to establish indicators for behavior change, which often occurs slowly over time. By the third edition of the fund, however, the partners realized that they needed to align expectations about what could be measured during a project period, and subsequently developed indicators.

More broadly, the partnership between Avon and ELAS proved to be transformational—not simply a transactional funding relationship—because of the parties’ ability to work together to truly co-create the Speak Out Without Fear Fund. This required open minds, mutual respect, transparency, ongoing communication, and patience on both sides. In addition, because staff has changed at both institutions during the partnership period, it was important to have organizational buy-in for the partnership and ongoing sharing of information internally at Avon about the fund’s activities.

Amalia Fischer of ELAS remarked that the partnership built with Avon now goes much deeper than project funding and has helped ELAS develop new, meaningful relationships and networks. And Lirio Cipriani of Avon noted: “The partnership has enabled Avon to support solutions [to end domestic violence in Brazil] that are appropriate for the local conditions and, as a result, can lead to more profound and lasting transformation.”

Developed in Partnership with:

Reports | Thursday September 1, 2016

Responsible Luxury Initiative: Animal Sourcing Principles

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As companies in the luxury sector, dedicated to excellence in all areas, we are committed to responsible and sustainable business principles and practices, including sustainable sourcing. We work toward upholding such practices and principles throughout our own businesses as well as in our supply chains, by working with supply chain partners who share our values and approach to sustainable and responsible business. Since we may use material from animal origin, such as leather, animal fibers, exotic skins, and fur, in some of our products, we are deeply committed to principles and practices that require animals in our supply chain to be treated with care and respect, and for these species to be sustained, through sustainable trade, species conservation, and protection of ecosystems.

Blog | Tuesday June 14, 2016

Sustainability and CSR: A Word about Terms

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If you came to BSR’s website looking for information on corporate social responsibility or to ask, “What is CSR?”, only to find a lot of talk about sustainability, you may be wondering why this is so and whether you’ve come to the right place (you have!).

So why does BSR focus on sustainability vs. CSR? And what’s the difference, anyway?

First, a quick qualifier: As a global nonprofit business network and consultancy, we take a flexible approach to the use of terms in our project work, reflecting the diverse needs and understanding of our members and partners in different parts of the world. In our experience, CSR, sustainability, sustainable business, corporate citizenship, and the like are all generally used to describe the same thing, and so we are happy to use whatever terms resonate most in a given place and context.

For purposes of our own branding and thought leadership, however, we see value in consistency and have made some clear choices based on what we are trying to achieve—and we recommend that our members do the same. In our case, the language of sustainability wins out over CSR for a number of reasons.

Sustainability conveys greater ambition because it focuses on what we need to achieve, rather than where we are today. The original definition of sustainable development, from the first Rio Earth Summit in 1992, focused on “meeting the needs of the present without compromising the ability of future generations to meet their own needs."

The language and tools of CSR, at least in its early forms, tended to focus on meeting—or balancing—the needs of stakeholders today. Additionally, the term is often confused with philanthropy. As BSR and the broader field have come to focus more on long-term systemic issues, such as climate change and the inclusive economy, we felt that the ambition conveyed by sustainability better captures the objectives of our work.

Sustainability emphasizes a common agenda for all sectors of society, while the “C” in CSR calls out corporate practices more exclusively. BSR’s above-mentioned focus on critical systemic issues has come with a greater commitment to multistakeholder collaborative initiatives, in which business, government, and civil society all have critical roles to play.

Sustainability is a holistic concept that encompasses the full range of environmental, social, and economic issues addressed by our work. While the same is true of a good CSR strategy or program, the “S” in CSR is too-often construed to mean a narrower focus on social issues. That is also why we now go by “BSR” instead of our original moniker, “Business for Social Responsibility.”

Sustainability represents a concept that, in our experience, is more easily integrated into the core purpose of business than “responsibility,” which is often perceived as a check or counter-balance to business-as-usual activity. As the field has evolved from an exclusive focus on risk management and avoidance of harm to also encompass innovation and value creation, sustainability provides a more attractive and inspiring framing.

In short, “sustainability” reflects the ambition, reach, and inspiration required to achieve BSR’s mission of working with business to create a just and sustainable world. And although some may argue it’s just semantics, to us, sustainability—and what comes with it—is core to everything we do. 

Case Studies | Wednesday March 30, 2016

Measuring the Net Positive Value of ICT in Online Education

Preview

This case study, published by BSR’s Center for Technology and Sustainability, examines the the net positive impact of ICT in online education, using as the case study Arizona State University’s current ASU Online education program for undergraduate degrees.

Summary

As online education has evolved in the American undergraduate education system, the use of information and communications technology (ICT) has skyrocketed. Online-class delivery systems are becoming the norm, even in face-to-face classes, as have online course-management and advising systems.

This report focuses on the net positive impact of ICT in online education, using as the case study Arizona State University’s current ASU Online education program for undergraduate degrees.

The ASU Online study indicates that there are both environmental and socioeconomic benefits to the use of ICT in online education.

Online education makes high-quality degrees accessible to a larger and more diverse group of people, many of whom would not otherwise earn a degree. Because these degrees are more accessible and affordable, they create positive socioeconomic impacts through increased incomes, greater productivity, and improved social conditions; we conservatively estimate the total socioeconomic impact to be US$545,000 per undergraduate degree. Positive environmental impacts result primarily from reduced student and faculty travel as well as avoided classroom construction, equaling an estimated carbon savings of 33.2 metric tons for that same undergraduate degree.

The ASU Online study suggests that ICT also enables innovation in education that can be scaled nationally and globally, satisfying the overwhelming need for access to education in developed, emerging, and developing countries.

Measuring the Environmental Benefits of ICT and Online Education

ASU Online was established to provide improved access to its educational offerings while also providing a new revenue stream for the university at a time when it faced reduced state and federal funding. However, the ASU Online campus has evolved to be a critical component of ASU’s sustainability plan: It plays a key role within ASU’s broader sustainability strategy, which includes climate neutrality, zero waste, zero wastewater, and low hazardous-material goals. The university continues to aggressively pursue these goals, including net zero energy by 2030, so ASU has made measuring environmental benefits a requirement across the university.

The Assessment Process

This report was prepared by ASU sustainability scientists from the university-wide Julie Ann Wrigley Global Institute of Sustainability, including the W.P. Carey School of Business, the Ira A. Fulton Schools of Engineering, and the Global Sustainability Solutions Services of the Walton Sustainability Solutions Initiatives, with both intellectual and financial support from Dell.

In order to assess the net positive impact of ICT at ASU Online, the research team developed high-level models of variables and populated them through structured interviews of key stakeholders and ICT platform experts across the education landscape, with a focus on Arizona State University and ASU Online. In addition, we conducted a literature review of published studies in areas relevant to net positive assessment of online education. We used delivery and completion of undergraduate degrees as the unit of analysis.

Because net positive is a relatively new concept, it was difficult to find any studies during our literature review that explicitly studied online education from this point of view. Instead, we focused our search terms on the various aspects of online education that create value or positive impacts to society.

The Net Benefits Model

Study Scope

For the purposes of this study, ASU means the entire ASU enterprise, consisting of 18 schools and colleges, five physical campuses, and the ASU Online virtual campus. ASU Immersive is used to describe the historic campus-based ASU, while ASU Online describes the unit that manages ASU degree programs through the ASU Online platform.

For the purposes of this case study, we view this greater ASU enterprise as a system that takes in enrollees, uses energy and other resources as inputs, and then produces outputs such as graduates and negative environmental impacts. Graduates, in turn, create positive socioeconomic impacts and outcomes. Increasing the number of graduates while reducing resource consumption enhances ASU’s overall net positive sustainability goal. ASU Online plays a critical role in achieving ASU’s overall sustainability goals.

Models and Metrics

Interviews and literature review provided the content for the development of two models and two key areas for output metrics: the holistic value proposition and the dynamic view of ASU Online through 2030.

Holistic Value Proposition

Any business model results in a specific set of benefits to stakeholders. This bundle of benefits—the value proposition—can be characterized for all stakeholders in the value network. This distribution of value capture is referred to as the Holistic Value Proposition (HVP) (O’Neill et al., 2006). The HVP for this study included 20 interviews of internal and external experts from the following stakeholder groups: broader society, online students, academic institutions offering online education, faculty, employers, and experts from the ICT industry.

A Dynamic View: ASU/ASU Online 2015-2025

Education innovation and its impact on the sustainability of higher education at ASU, which we measure in this section, is scalable both nationally and globally. In the ASU case, the net positive position of ICT in online education is primarily due to avoided carbon plus the positive socioeconomic impact of education access and affordability. Many more people will attain a degree through ASU than would have without online access.

Using a somewhat idealized best-case scenario of the ASU complex if it meets its growth and operational sustainability goals, the study determined that by 2025 ASU will be educating 100,000 students through immersive courses and 100,000 online, with nearly 75 percent of the total student body taking some portion of their classes online. This will have the net effect of producing more graduates for a much lower environmental footprint than today, and the use of ICT will be a key driver.

The big impacts at a national level are the economic and social returns of a degree, which we document in the next section of this report. The longer-term net positive story is one of innovation in a dynamic global market with its overwhelming need to educate students in developed, emerging, and developing countries. Online education may be the only hope for 9.5 billion people to get a high quality education in the coming decades. 

Socioeconomic System-Wide Effects

Access to and completion of an online undergraduate degree program offers a number of social and economic benefits.

A key finding of this study, supported by the interviews, is that many ASU Online students would not get a degree at all if an online degree were not available. Access to education is one of the biggest contributions of ASU Online. Hout (2012) argues that the societal gain increases when more people are educated. If education boosts collective as well as personal productivity, then increased educational attainment for a population might be a key causal factor in overall economic growth—in fact, estimated social returns due to education might exceed individual returns. Lange and Topel (2006) observed this trend in metropolitan cities.

Ellwood & Jencks (2004) found that college graduates are less likely to go through divorces than those who have no degree. A number of studies have suggested that college education improves a person’s general health (Mirowski & Ross, 2003). Although causality is difficult to prove, a general argument made by many studies is that formal education improves a person’s understanding of the qualities and habits that promote good health.

Although there have been no attempts to establish causal linkages between education and happiness, Yang (2008) showed that people with a college degree are happier than those without a college degree.

The ASU Online Handprint and Footprint Model

In developing this report, the research team used the Global e-Sustainability Initiative (GeSI) methodological framework as a guide to develop the carbon-focused environmental aspects, or footprint, of the net positive statement. We also considered using the framework to express the socioeconomic benefits, or its handprint. The research team will provide the report data in GeSI, along with observations on its applicability to this type of net positive analysis, in the near future.

When it comes to assessing the net positive impact of ASU Online, key factors included in the scope of the model are the net ICT footprint of ASU Online and the potential social and economic handprint of students that online access enables to complete a degree.

The model quantifies handprint by including the expected additional average lifetime economic earnings after attaining a bachelor’s degree, adjusted for a shorter remaining career span, and potential higher net worth at retirement. Potential benefits are based on reported research findings regarding the lifetime value of completing an undergraduate degree compared to not completing the degree. We consider broader social returns largely in terms of avoiding and/or contributing social services. We conservatively estimate the net positive socioeconomic impact per degree to be US$545,000. The model also identifies the overall system-wide social impacts of attaining a college degree.

For the footprint, the model focuses on quantifying carbon dioxide equivalent (CO2e) emissions. Other environmental impact categories such as paper reduction, water use, and building construction were only briefly considered during this study and we made no attempt to formally quantify them. The factors we used to calculate the footprint in this study include increases in direct ICT emissions, net new data center construction and ICT equipment, telecommuting savings, and reduced construction and use of campus facilities. The net positive impact on emissions is conservatively calculated to be 28.3 metric tons of CO2e per degree produced.

The ratio of the positive benefits of producing a college graduate to the resources required to do so, including emissions, is growing larger quickly due to the maturation of online education and the dedication of higher-education institutions to making it so. ICT plays a central and critical role.

Limitations and Gaps, Future Research

During this research, we identified six significant limitations of the ASU Online study, and suggest next steps for future research.

The increased investment in ICT systems to accommodate online study and the increase in greenhouse gas (GHG) production from added ICT systems for online study are not thoroughly identified in this study. Next steps in a follow-up research project would include gathering and analyzing appropriate samples of use data.

The quantification of GHG savings from reduced campus infrastructure needs makes an assumption about the annual operating savings as a percentage of the reported GHG impact of the campus and a very high-level estimate of the net benefits from classroom construction avoidance. Steps in a follow-up research project would include validating the assumptions stated above for both operational and construction scenarios.

Initial findings on enabling the completion of a degree are based on a limited sample of cohorts that started the ASU Online undergraduate degree and interview information gleaned from ASU experts. A follow-up study might use a survey or structured interviews to gather more complete information about the demographics and perceptions of the student base in the ASU Online degree programs. Additional and larger cohorts could also be added.

Initial suggestions about lifetime income and lifetime social impacts are based solely on the many continuing studies of the impact of completing a college degree compared to only having some college courses completed. Although existing sources of data for these handprint economic and social factors may prove to be adequate, a follow-up study would explore these sources in greater depth.

This is a single case study. It will be hard to generalize to a broader base at a national level without conducting some additional case studies and/or gathering a limited set of data for a larger sample of universities. This should be done in a follow-up study.

Other environmental factors briefly discussed during this study and then excluded from it include water use on campus, solid waste disposal from campus to landfill, water runoff and sewage waste from campus, and food supply chain issues.

Conclusion

The contribution of ICT and ASU Online to the net positive position of the ASU complex is substantial and based almost entirely on increased access to and affordability of undergraduate degrees. At the same time, it is lowering the environmental footprint required to produce those degrees.

The important point is that ICT is enabling innovation in education in general and in online education specifically. The ratio of the positive benefits of producing a college graduate to the resources required to do so, including emissions, is growing larger quickly due to the maturation of online education and the dedication of higher-education institutions to making it so. ICT plays a central and critical role.

For complete data analysis and access to report appendices, download the report or view the ASU Online "how it works" page.