Environmental stewardship was part of REI’s culture since the company was founded, and integral to its corporate purpose. In 2005, REI began carefully measuring its environmental impact, establishing aggressive sustainability goals, and implementing programs to achieve these goals. The corporate social responsibility group, which oversaw the environmental sustainability program, took the approach that social and financial objectives should not be viewed as tradeoffs. For instance, growth objectives (increasing the number of stores and sales per store) should not come at the expense of energy consumption objectives for flat or decreasing corporate energy usage. Insisting that both objectives be met would lead to creating thinking and innovative solutions.
Case No: SM196
In 2010, Recreational Equipment, Inc. (REI) considered adding photovoltaic solar panels to the roofs of some of its facilities. This was driven by both financial and environmental considerations. In 2008, the company had added solar panels to 11 buildings in a project (“Phase 1”) that was justified largely as a learning exercise. The new project (“Phase 2”) would have to meet both financial and environmental objectives. The case describes the company’s experience with solar power generation as well as providing representative assumptions for parameters in the financial analysis.
Case No: BE17
This case details the strategic decisions that went into Nissan’s development of the LEAF, the first mass- produced all-electric car. Carlos Ghosn, president and CEO of the Renault-Nissan Alliance, was making a $5 billion bet that electric cars would be the wave of the future. The Alliance was building capacity for 500,000 zero-emission vehicles in Japan, the United States and Europe.
The case covers the inception and launch of the LEAF; Nissan’s marketing strategy for the car; the building of charging stations; and Nissan’s electric car strategy in the context of the Renault-Nissan Alliance. It also discusses the challenges caused by the high cost of electric vehicle batteries, as well as the advantages of Nissan’s joint venture with Japanese battery maker NEC. To handle battery reuse and recycling, Nissan created a separate company called 4R Energy Corporation.
The case also provides an overview of the electric car industry and the different economic, psychological and political forces that could either advance or impede the success of the electric car. It discusses Nissan’s competitors, including: General Motors, which came out with its plug-in hybrid vehicle the Volt at the same time the LEAF was launched; Tesla; China-based BYD; and the upcoming electric cars promised by Ford, Volkswagen and Toyota.
Case No: SM189