Lots of $, Not Enough Opportunities

International Development is sexy. No doubt about it. It smells like a campfire, wears Toms shoes, carries a Nalgene, listens to indie music, looks like a celebrity special envoy for the UN, and feels good. And oh, by the way, it will make you rich if you play it right. Perhaps this allure is why there is so much money flowing into emerging markets despite a relative paucity in funding opportunities.

Our panelists - Leslie Barcus of Microfinance Management Institute (MFMI), Chinesom Ejisa of Overseas Private Investment Corporation (OPIC), and Jesse Fripp of Shorebank International (SBI) - have seen the financial side of international development up close and remain enthusiastic about its future. The growth of emerging markets will continue to attract capital, and the innovative spirit within these markets has been awoken. That said, our panelists emphasized the need for new metrics to measure not just the financial success of investments, but also the environmental and societal impacts of development projects. They also remain concerned about the gluts created by foreign aid, which only hampers the impact of private investments in emerging markets.

As for the future, our panelists seemed to think that governments will need to play less and less of a role in encouraging the attraction of capital to international development projects. Hopefully, such a shift would also lessen the bureaucratic hurdles that still hamper much of the efficacy of private investments into these growing economies. The other major shift in development projects is a growth in small/medium enterprise funding (SME) rather than micofinance loans. These loans are larger and look to fill the "missing middle" through more sustainable investments.

Finally, if you're looking to get into international development careers, it is important to brush up on your technical skills - financial analysis, market entry strategy, etc. - while also identifying specific passions for geographies and industries. It's not an easy sector to break into, so be persistent and be innovative.

It’s a dirty job, but somebody’s got to do it…

Well, not “dirty” in the “we promote fossil fuels” kind of way – this was the Renewable Energy panel, after all. Think “dirty” more along the lines of “difficult and demanding,” or something that requires incredible amounts of ingenuity, persistence, and grit.

All of our panel participants showcased those characteristics on Wednesday afternoon. Experts in their respective fields of renewable energy – solar, wind, and biomass – they spoke about the ups and downs of a burgeoning, but bumpy, business. Their titles and companies are listed below:

• Mike Lenox, Associate Dean and Executive Director of the Batten Institute (Moderator)
• Matthew Markee, President, Recast Energy
• Thomas Meth, Executive VP, Enviva Sustainable Biomass Resources
• Eamon Perrel, Director of Business Development, Apex Wind Energy
• Danny Van Clief, VP Business Development, HelioSage

A consistent theme during the discussion was that renewable energy companies, especially smaller start-ups, face unique challenges in the post-recession economy. Specifically, Matthew Markee said that the cost and time for project financing was onerous due to the restricted risk appetite of investors. Additionally, Thomas Meth mentioned that cheap electricity prices have hampered the return on projects, making it even more difficult to raise capital. To that point, Danny Van Clief emphasized how important it was to engage in a great deal of marketing to appeal to “patient capital,” and convince investors of a company’s credibility in the industry.

Despite this challenging environment, the panelists were tremendously optimistic about opportunities for growth. When asked about what cost efficiencies the industry could realize moving forward, each of them was quick to respond: Danny Van Clief thought that manufacturing costs for solar would decline substantially in the future; Eamon Perrel argued that technology would get cheaper and that there would be greater efficiencies of scale, rendering wind energy more competitive; Thomas Meth cited the learning curve as the main opportunity for biomass; and Matthew Markee mentioned that changing the mindset of biomass suppliers would lead to higher performance in the industry.

In sum, the panel was a fitting conclusion to a terrific conference. Thanks again to all of those who participated and attended – we look forward to continuing our discussion of these issues!

Renewable Energy Financing Panel Lively and Informative

Darden Professor Yiorgos Allayannis moderated a lively, exciting, and incredibly informative panel discussion on the topic of renewable energy financing. The panel featured five speakers ranging the spectrum in this area, from financers, to developers, to technology providers. The all Darden alumni panel included:

• Blake Clifton, Abundant Power
• Terri Denning, Suzlon Wind Energy
• Matt Dixon, EnXco
• Matt Fedors, Leaf Clean Energy
• Fabricio Soares, Ashoka

Much of the discussion focused on key policy areas that are either facing the industry now or may be on the horizon. Of particular interest to this crowd was the topic of government support for project financing, including the renewal of the 1603 cash grant as well as the differences between investment and production tax credits. It was loud and clear that government policy, and the various methods to financially incentivize renewable energy project development, is a key driver for the future growth of the industry.

Additional topics touched upon included how to assess financial risk for both technology as well as valuations and financial projections. The audience was engaged and excited, with the only disappointment being that we did not have two more hours to answer more questions.

CSR: Fluffy Ain't So Fluffy After All

"CSR is in the eye of the beholder."

Given the different definitions of 'corporate social responsibility' and 'sustainability', this panel had the difficult task of tackling issues ranging from green packaging to the global financial crisis. The fluffiness of this topic added excitement about how large corporations could impact society but also burdened the audience with the responsibility to make CSR initiatives more relevant to all stakeholders.

The encore appearance of John Reid (VP of CSR for Coca-Cola) as our moderator kicked off this panel with hard questions posed to his fellow panelists - Adam Cooper (Accenture Sustainability Services) and Chrissa Pagitsas (Fannie Mae).

Reid first pushed Cooper and Pagitsas to address the need for improved metrics to measure the value that CSR initiatives have on people, planet, and profit. The challenges of this task became very clear as Cooper explained the problems in measuring avoided cost (e.g. the avoidance of a recall) as a result of CSR/sustainability initiatives. Indeed, Pagitsas confirmed that metrics need to be more tailored towards particular purposes while also standardizing them to facilitate comparison. There were even some suggestions that the non-profit community might have best practice models of metrics that could be copied by corporate entities.

Reid then took the conversation a step further as he spoke of the need of CSR/sustainability initiatives to address 'well-being' of all stakeholders. This cutting edge concept is meant to capture a corporation's contribution to the human flourishing of its employees, customers, investors, and supply chain. Reid focused on three key components of 'well-being': personal, social, and natural. He also referenced the work that Gallup has undertaken to create a well-being index.

Finally, all three panelists offered sage wisdom for those looking to get involved in CSR/sustainability careers following graduation from Darden:

1. Gain a technical expertise even as you gather a general manager's understanding of business.

2. Don't lose your passion and make CSR your own.

As CSR evolves, there was general consensus that sustainability initiatives will continue to become a part of mainstream business strategy no matter what industry you may end up in.

Larry Schweiger, President and CEO of the National Wildlife Federation

Larry Schweiger centered his talk around his recent book - "Last Chance: Preserving Life on Earth." As the CEO and President of the National Wildlife Federation, Mr. Schweiger has dedicated his career to the preservation of our plant.

After highlighting the dramatic impact global warming will have on our plant, Mr. Schweiger addressed the need for a paradigm shift in the energy industry to combat the consequences of global warming. He addressed the need for increased spending to address the problem and stated: "We can either spend 1% of the global GDP on mitigating global warming or face a 5-20% decrease in GDP as a result of its effects."

A few of Mr. Schweiger's suggestions:

• a realistic price for carbon emissions


• an end to imported oil


• off-shore wind production


• more efficient cars


• increased innovation


• CO2 sequestration technologies


• development of 2nd generation feedstocks for ethanol


• smart electricity grids

Mr. Schweiger noted that other countries, specifically China, are surpassing America in their development and adoption of clean-technologies. He urged our country to match their pace.

John Reid, Coke's VP of Corporate Social Responsibility, gives Keynote

"I think what you're getting when you get me is eclectic."

Indeed, eclectic is the right word to describe John Reid's career. Before becoming the Vice President of Corporate Social Responsibility for The Coca-Cola Company he was involved in many areas of the business: marketing, operations, supply chain management, and strategy. Outside of Coke, he served as the Chief Administrative Officer of the City of Atlanta, Assistant Secretary for Education of New York State, and Deputy Director of State Operations of New York State. To top it all off, Mr. Reid has helped launch five start-up businesses, three in education.

With this impressive background, Mr. Reid was in the right position to give us some career advice, greatly welcome at a time when most of us wonder how we can get a job in his field.

He talked about collaboration and of aligning your personal goals with those of your team in order to achieve great goals. (Sounds like he took LO back in the day!) To the more qualitative-driven students in the audience (like me!), he stressed the importance of developing analytical skills. He talked about the value of immersing oneself not just in one's job, but in the system as a whole - in his case, having a solid understanding of Coke's business, the bottlers' and of all the steps in the supply chain. Finally, he talked about taking a "left turn."

"But I don't even know how to spell the word environment!"

This was Mr. Reid's initial reaction when his boss asked him to be the head of Corporate Social Responsibility for Coke. His linear career path took an unexpected turn. He took on the challenge. He took the left turn. Now he focuses most of his time on making sure Coke is responsibly and sustainably managing three areas: water, climate (carbon emissions), and packaging.

It's certainly hard to wrap one's head around the impact that Mr. Reid's decisions have on sustainability efforts around the globe. Coke produces 22 products in 206 countries and sells over 500 brands around the world. If I were interviewing for consulting, and knew anything about case interviews, I could probably tell you exactly how many pounds of plastic, glass, and aluminum bear Coke's label on an annual basis. I could also probably tell you how much water is required to make a year's worth of coke products and how much gas you need to transport them. All i can say is that it's a whole lot!

The Q&A session that followed Mr. Reid's address tried to get a bit deeper into Coke's sustainability initiatives. For better or worse, Mr. Reid continued to suggest we find answers in Coke's recently published 2009/2010 sustainability report.

The Power of Public Private Partnerships

Somewhere on the King’s Highway in South Africa is a woman struggling with AIDS, and somewhere in Harlem, another woman looking for help with HIV. While the two will likely never meet, they are united in their quest for survival. The women are also connected by a growing group of leaders in the public, private, and civic sectors who are tackling important global challenges with public private partnerships to reach individuals like them.

Several experts in public private partnerships gathered at the Darden Net Impact Conference yesterday to discuss the topic. Moderated by Darden’s own Mary Margaret Frank, panelists included the following:

• Mary Ann Leeper, Darden professor
• John Newsome, Global Business Connection on HIV/AIDS, Tuberculosis, and Malaria
• Rob Schneider, United States Agency for International Development
• Kevin Yocum, Brink’s Company

Speakers described public private partnerships as alliances of organizations with shared common goals. Historically such partnerships focused primarily on business synergies. Today they have become increasingly sophisticated in their ability to unite diverse actors and communities and to leverage the unique expertise each of those partners. Public private partnerships are addressing increasingly diverse and complex challenges, from the distribution of female condoms in Washington, DC to access to drugs to fight HIV/AIDs.

The panel highlighted many characteristics of successful public private partnerships. To succeed, such alliances should:

• Identify and measure key important challenges
• Develop relationships with people and organizations with relevant expertise
• Convince key stakeholders of the power of a public private partnership
• Utilize the relevant skills of every partner to find and implement innovative solutions
• Employ rigorous analytics to measure their impact

The power of these partnerships is profound, and in closing, Mary Margaret Frank challenged each of us to use the powerful skill set we are building as MBAs to make an impact. We all have the opportunity to act as bridgers to unite the government, corporations, and non-profits and to reach women like those in South Africa and Harlem.