Analyzing Global Value Chains for Sustainable and Inclusive Development

Market expansion and client acquisition strategies are typically associated with private sector development in pursuit of new revenue sources and improving profit margins, but how are these strategies applied to nonprofits in the sustainability space? This is precisely the question my teammates and I are addressing as we develop strategies for a nonprofit that finances renewable energy projects for climate-vulnerable populations. 

We have been tasked with identifying industries and companies that would be a good match for our client to partner with on new renewable energy projects and developing a strategy for engaging with potential partner firms to expand renewable energy financing and implementation in vulnerable communities. This work is part of a broader shift in perspective taking place for many corporations and consumers to measure returns on investment and company value in a more comprehensive way where returns and value-creation are inclusive of social and ecological benefits. Consumers, shareholders, regulators and companies have become more conscious of these impacts, beyond traditional measures of efficiency and profit margins. I am hopeful that this trend will continue and that we are witnessing a sea change in economic thought that situates economics, not as a discrete sphere, but within the context of social wellbeing and environmental preservation.

This project exemplifies this shift, as we seek to build nonprofit-private sector partnerships to achieve social and environmental sustainability goals. As we dive into the early stages of our research, I have begun to realize how the tools I’ve developed through prior consulting work with private sector firms can be deployed in the nonprofit space. Expanding into new markets here means identifying energy-scarce and climate-vulnerable communities that would benefit from new renewable energy projects. Client acquisition means pinpointing industries operating in these communities and developing a compelling pitch to bring new corporate partners on-board to finance these projects. Locating the geographic overlap between these two entities, corporate value chains and climate-vulnerable populations, is the initial step in our endeavor to extend the reach of our client’s renewable energy impact. It is exciting to be working in a space redefining the scope of success to be inclusive of impact beyond profit maximization and to be deploying business strategies in pursuit of sustainable development goals.

Moreover, our research thus far reinforces the need for a holistic approach to identifying stakeholders and relevant actors in sustainable investment. Complex supply chains across the globe make the issue of identifying Scope 2 and 3 emissions a challenging task. As we track the environmental footprint of a product from its raw materials to a finished good in the hands of a consumer, this process often takes place across many communities, crossing multiple state borders. One of the fascinating aspects of this project is that we are not only examining the climate impact of the production process, but also emissions after purchase, for example, the energy needed to power electronics. As companies and consumers become more interested in understanding the human and environmental impact of products, it will be essential to continue moving towards a more holistic evaluation of value-chains that includes every stage of the product’s life.

Another topic which has come to the fore in our research is the issue of energy access and equity. As we move towards renewable energy sources, many of the primary components necessary for the development of these technologies are derived from regions that are relatively energy poor. For example, rechargeable batteries play a huge role in the transition from fossil fuels and efforts to procure the raw materials (such as lithium, copper and cobalt) necessary for producing these batteries have accelerated. These minerals and metals are often found in countries with higher rates of energy poverty and reliance on high-pollution energy sources. Part of the mission of the organization we are working with, is to address the injustice of this relationship; where regions endowed with the resources required to create renewable energy, are unable to access renewable energy. By financing energy projects in these regions, the client aims to ensure that those most closely tied to the renewable energy supply chain are not passed over, but instead are able to become beneficiaries of the energy transition. While our work will encompass a wide variety of industries and populations, I am looking forward to contributing to this effort.

Our team is currently in the research stage of this process, which we will later apply to the development of concrete strategies for engaging with new potential partner companies to expand the reach and impact of our client’s projects. More to come in future posts on the analytical and strategic processes for building corporate partnerships and scaling up the geographic range of renewable energy projects. As we delve deeper into these issues, I am looking forward to expanding my professional knowledge in the sustainability space and contributing to an organization that is doing truly impactful work.