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      in Energy

      Will the charging networks arrive in time?

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      For many owners of electric vehicles (EVs), or for prospective EV owners, a thorny problem is where to charge them. Even as legacy automakers increasingly invest in manufacturing more all-electric cars and trucks, there is not a dense network of charging stations serving many types of vehicles, which would make EVs more convenient to use.

      “We’re going to have the ability to produce and deliver millions of EVs,” said MIT Professor Charles Fine at the final session this semester of the MIT Mobility Forum. “It’s not clear we’re going to have the ability to charge them. That’s a huge, huge mismatch.”

      Indeed, making EV charging stations as ubiquitous as gas stations could spur a major transition within the entire U.S. vehicle fleet. While the automaker Tesla has built a network of almost 2,000 charging stations across the U.S., and might make some interoperable with other makes of vehicles, independent companies trying to develop a business out of it are still trying to gain significant traction.

      “They don’t have a business model that works yet,” said Fine, the Chrysler Leaders for Global Operations Professor of Management at the MIT Sloan School of Management, speaking of startup firms. “They haven’t figured out their supply chains. They haven’t figured out the customer value proposition. They haven’t figured out their technology standards. It’s a very, very immature domain.”

      The May 12 event drew nearly 250 people as well as an online audience. The MIT Mobility Forum is a weekly set of talks and discussions during the academic year, ranging widely across the field of transportation and design. It is hosted by the MIT Mobility Initiative, which works to advance sustainable, accessible, and safe forms of transportation.

      Fine is a prominent expert in the areas of operations strategy, entrepreneurship, and supply chain management. He has been at MIT Sloan for over 30 years; from 2015 to 2022, he also served as the founding president, dean, and CEO of the Asia School of Business in Kuala Lumpur, Malaysia, a collaboration between MIT Sloan and Bank Negara Malaysia. Fine is also author of “Faster, Smarter, Greener: The Future of the Car and Urban Mobility” (MIT Press, 2017).

      In Fine’s remarks, he discussed the growth stages of startup companies, highlighting three phases where firms try to “nail it, scale it, and sail it” — that is, figure out the concept and workability of their enterprise, try to expand it, and then operate as a larger company. The charging-business startups are still somewhere within the first of these phases.

      At the same time, the established automakers have announced major investments in EVs — a collective $860 billion over the next decade, Fine noted. Among others, Ford says it will invest $50 billion in EV production by 2026; General Motors plans to spend $35 billion on EVs by 2025; and Toyota has announced it will invest $35 billion in EV manufacturing by 2030.

      With all these vehicles potentially coming to market, Fine suggested, the crux of the issue is a kind of “chicken and egg” problem between EVs and the network needed to support them.

      “If you’re a startup company in the charging business, if there aren’t many EVs out there, you’re not going to be making much money, and that doesn’t give you the capital to continue to invest and grow,” Fine said. “So, they need to wait until they have revenue before they can grow further. On the other hand, why should anybody buy an electric car if they don’t think they’re going to be able to charge it?”

      Those living in single-family homes can install chargers. But many others are not in that situation, Fine noted: “For people who don’t have fixed parking spaces and have to rely on the public network, there is this chicken-and-egg problem. They can’t buy an EV unless they know how they’re going to be able to charge it, and charging companies can’t build out their networks unless they know how they’re going to get their revenue.”

      The event featured a question-and-answer session and audience discussion, with a range of questions, and comments from some industry veterans, including Robin Chase SM ’86, the co-founder and former CEO of Zipcar. She expressed some optimism that startup charging companies will be able to get traction in the nascent market before long.

      “The right companies can learn very fast,” Chase said. “There’s no reason why they can’t correct those scaling problems in short-ish order.”

      In answer to other audience questions, Fine noted some of the challenges that will have to be addressed by independent charging firms, such as unified standards and interoperability among automakers and charging stations.

      “For a driver to have to have six different apps, or [their] car doesn’t fit in the plug here or there, or my software doesn’t talk to my credit card … connectivity, standards, technical issues need to be worked out as well,” Fine said.

      There are also varying regulatory issues, including grid policies and what consumers can be billed for, which have to be worked out on a state-by-state basis, meaning that even modest-size startups will have to have knowledgeable and productive legal departments.

      All of which makes it possible, as Fine suggested, that the large legacy automakers will start investing more heavily in the charging business in the near future. Mercedes, he noted, just announced in January that it is entering into a partnership with charging firms ChargePoint and MN8 Energy to develop about 400 charging stations across North America by 2027. By necessity, others might have to follow suit if they want to protect their massive planned investments in the EV sector.

      “I’m not in the business of telling [automakers] what to do, but I do think they have a lot at risk,” Fine said. “They’re spending billions and billions of dollars to produce these cars, and I don’t think they can afford an epic failure [if] people don’t buy them because there’s no charging infrastructure. If they’re waiting for the startups to build out rapidly, then they may be waiting longer than they hope to wait.” More

    • 75 Shares119 Views

      in Environment

      Engaging enterprises with the climate crisis

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      Almost every large corporation is committed to achieving net zero carbon emissions by 2050 but lacks a roadmap to get there, says John Sterman, professor of management at MIT’s Sloan School of Management, co-director of the MIT Sloan Sustainability Initiative, and leader of its Climate Pathways Project. Sterman and colleagues offer a suite of well-honed strategies to smooth this journey, including a free global climate policy simulator called En-ROADS deployed in workshops that have educated more than 230,000 people, including thousands of senior elected officials and leaders in business and civil society around the world. 

      Running on ordinary laptops, En-ROADS examines how we can reduce carbon emissions to keep global warming under 2 degrees Celsius, Sterman says. Users, expert or not, can easily explore how dozens of policies, such as pricing carbon and electrifying vehicles, can affect hundreds of factors such as temperature, energy prices, and sea level rise. 

      En-ROADs and related work on climate change are just one thread in Sterman’s decades of research to integrate environmental sustainability with business decisions. 

      “There’s a fundamental alignment between a healthy environment, a healthy society, and a healthy economy,” he says. “Destroy the environment and you destroy the economy and society. Likewise, hungry, ill-housed, insecure people, lacking decent jobs and equity in opportunity, will catch the last fish and cut the last tree, destroying the environment and society. Unfortunately, a lot of businesses still see the issue as a trade-off — if we focus on the environment, it will hurt our bottom line; if we improve working conditions, it will raise our labor costs. That turns out not to be true in many, many cases. But how can we help people understand that fundamental alignment? That’s where simulation models can play a big role.”

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      Learning with management flight simulators 

      “My original field is system dynamics, a method for understanding the complex systems in which we’re embedded—whether those are organizations, companies, markets, society as a whole, or the climate system” Sterman says. “You can build these wonderful, complex simulation models that offer important insights and insight into high-leverage policies so that organizations can make significant improvements.” 

      “But those models don’t do any good at all unless the folks in those organizations can learn for themselves about what those high-leverage opportunities are,” he emphasizes. “You can show people the best scientific evidence, the best data, and it’s not necessarily going to change their minds about what they ought to be doing. You’ve got to create a process that helps smart but busy people learn how they can improve their organizations.” 

      Sterman and his colleagues pioneered management flight simulators — which, like aircraft flight simulators, offer an environment in which you can make decisions, seeing what works and what doesn’t, at low cost with no risk. 

      “People learn best from experience and experiment,” he points out. “But in many of the most important settings that we face today, experience comes too late to be useful, and experiments are impossible. In such settings, simulation becomes the only way people can learn for themselves and gain the confidence to change their behavior in the real world.” 

      “You can’t learn to fly a new jetliner by watching someone else; to learn, one must be at the controls,” Sterman emphasizes. “People don’t change deeply embedded beliefs and behaviors just because somebody tells them that what they’re doing is harmful and there are better options. People have to learn for themselves.”

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      Learning the business of sustainability 

      His longstanding “laboratory for sustainable business” course lets MIT Sloan School students learn the state of the art in sustainability challenges — not just climate change but microplastics, water shortages, toxins in our food and air, and other crises. As part of the course, students work in teams with organizations on real sustainability challenges. “We’ve had a very wide range of companies and other organizations participate, and many of them come back year after year,” Sterman says. 

      MIT Sloan also offers executive education in sustainability, in both open enrollment and customized programs. “We’ve had all kinds of folks, from all over the world and every industry” he says. 

      In his opening class for executive MBAs, he polls attendees to ask if sustainability is a material issue for their companies, and how actively those companies are addressing that issue. Almost all of the attendees agree that sustainability is a key issue, but nearly all say their companies are not doing enough, with many saying they “comply with all applicable laws and regulations.” 

      “So there’s a huge disconnect,” Sterman points out. “How do you close that gap? How do you take action? How do you break the idea that if you take action to be more sustainable it will hurt your business, when in fact it’s almost always the other way around? And then how can you make the change happen, so that what you’re doing will get implemented and stick?” 

      Simulating policies for sustainability 

      Management flight simulators that offer active learning can provide crucial guidance. In the case of climate change, En-ROADs presents a straightforward interface that lets users adjust sliders to experiment with actions to try to bring down carbon emissions. “Should we have a price on carbon?” Sterman asks. “Should we promote renewables? Should we work on methane? Stop deforestation? You can try anything you want. You get immediate feedback on the likely consequences of your decisions. Often people are surprised as favorite policies — say, planting trees — have only minor impact on global warming. (In the case of trees, because it takes so long for the trees to grow).”

      One En-ROADS alumnus works for a pharmaceutical company that set a target of zero net emissions by mid-century. But, as often observed, measures proposed at the senior corporate level were often resisted by the operating units. The alumnus attacked the problem by bringing workshops with simulations and other sustainability tools to front-line employees in a manufacturing plant he knew well. He asked these employees how they thought they could reduce carbon emissions and what they needed to do so. 

      “It turns out that they had a long list of opportunities to reduce the emissions from this plant,” Sterman says. “But they didn’t have any support to get it done. He helped their ideas get that support, get the resources, come up with ways to monitor their progress, and ways to look for quick wins. It’s been highly successful.” 

      En-ROADS helps people understand that process improvement activity takes resources; you might need to take some equipment offline temporarily, for example, to upgrade or improve it. “There’s a little bit of a worse-before-better trade-off,” he says. “You need to be prepared. The active learning, the use of the simulators, helps people prepare for that journey and overcome the barriers that they will face.” 

      Interactive workshops with En-ROADS and other sustainability tools also brought change to another large corporation, HSBC Bank U.S.A. Like many other financial institutions, HSBC has committed to significantly cut its emissions, but many employees and executives didn’t understand why or what that would entail. For instance, would the bank give up potential business in carbon-intensive industries? 

      Brought to more than 1,000 employees, the En-ROADS workshops let employees surface concerns they might have about continuing to be successful while addressing climate concerns. “It turns out in many cases, there isn’t that much of a trade-off,” Sterman remarks. “Fossil energy projects, for example, are extremely risky. And there are opportunities to improve margins in other businesses where you can help cut their carbon footprint.” 

      The free version of En-ROADS generally satisfies the needs of most organizations, but Sterman and his partners also can augment the model or develop customized workshops to address specific concerns. 

      People who take the workshops emerge with a greater understanding of climate change and its effects, and a deeper knowledge of the high-leverage opportunities to cut emissions. “Even more importantly, they come out with a greater sense of urgency,” he says. “But they also come out with an understanding that it’s not too late. Time is short, but what we do can still make a difference.”  More

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      in Environment

      Creating the steps to make organizational sustainability work

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      Sustainability is a hot topic. Companies throw around their carbon or recycling initiatives, and competing executives feel the need to follow suit. But aside from the external pressure, there are also bottom-line benefits. Becoming more efficient can save money. Creating a new product might make money; customers care about a company’s practices and will spend their money based on that.

      The work is in getting there, because becoming sustainable can seem simple: Establish a goal for five years down the road, and everything will fall into place — but it’s easy for things to get upended. “There is so much confusion and noise in this space,” says Jason Jay, senior lecturer and director of the Sustainability Initiative at MIT’s Sloan School of Management.

      His work is to help companies break through the confusion and figure out what they want to actually do, not merely what sounds good. It means doing research and listening to science. Mostly, it requires discipline, and because something new — be it a product, process or technology — is being asked for, it also takes ambition. “It’s a tricky dance,” he says, but one that can result in “doing well and doing good at the same time.”

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      It’s about taking steps

      Three steps, to be exact. The first, which is the crux, Jay says, is for a company to focus on a small set of issues that it can take the lead on. It sounds obvious, but it’s often missed. The problem is that companies will do either one of two things. They’ll take an outside-in approach in which they end up listening to too many stakeholders, “get pulled in a million different directions,” and try to solve all of society’s problems, which means solving none of them, he says.

      Or they’ll go inside-out and have one executive in charge of sustainability who will do some internal research and come up with an initiative. It might be a good idea, but it doesn’t take into account how it will affect the facilities, supply chains, and the people who work with them. And without that consideration, “It’s going to be very difficult to get the necessary traction inside the company,” Jay says.

      What’s needed is a combination of the two — outside perspectives coupled with insider knowledge — in order to find an initiative that resonates for that company. It starts with looking at what the company already does. That might show where it’s making a negative impact and, in turn, where it could make a positive one. It also involves the C-suite executives asking themselves, “What do we want this company to stand for?” and then, “What do I want my legacy to be?”

      Still, it can be hard to envision what change can look like or what actions might have an impact. Jay says this is where a simulation tool like En-ROADS, developed by MIT Sloan and Climate Interactive, can help explore scenarios.

      But it’s ultimately about making a commitment and allowing an iterative process to play out. A company then discovers its true focus might be something less flashy. Nike early on, for example, found that a huge source of greenhouse gas emissions was sulfur hexafluoride gas in the Nike Air bladder. When they re-engineered it, they ended up with inert nitrogen and a stronger material that was aesthetically cool and lightweight for the athlete. That didn’t come in one brainstorming meeting. It meant doing research and looking at what the science says is possible. It’s not quick, but it also shouldn’t be, if the goal is to take real, measurable action.

      “Cheap talk leads to cheap things,” Jay says. 

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      The next two

      Deciding what matters is key, but nothing materializes without establishing concrete goals. This is where a company “shows the world you’re serious.” But it’s a place where companies slip up. They either set weak goals, ones they know they can easily reach, so there’s no challenge, no accomplishment, “no stretch,” Jay says. Or they set goals that are too ambitious and/or aren’t backed by science. It could be, “We’re going to be net zero by 2050,” but how exactly is never answered.

      Jay says it’s about finding the sweet spot of having a reasonable amount of goals — like two to four — and then have those goals feel like a reach, yet possible. When that balance is right, it becomes a self-fulfilling prophecy. People stay motivated because they experience progress. But if it’s off, it won’t happen.

      “You need that optimal creative tension,” he says.

      And then there’s the third step. Companies need to find partners to make their sustainability programs succeed. It’s the one part that’s most overlooked because executives continually believe that they can do it alone. But they can’t, because big initiatives require help and expertise outside of a company’s realm.

      Maersk, the global shipping company, has a goal of replacing fossil fuel with green fuels for ocean freight, Jay says. It discovered that green ammonia could make that happen, and it was Yara, a fertilizer company, which best understood ammonia production. But it could also be a startup that’s working on a promising technology. Sometimes, as with moving to electric cars, what’s needed are political partners to enact policy and offer tax breaks and incentives. And it might be that the answer is collaborating with activists who have been pushing a company to change its ways.

      “There are strange bedfellows all around,” Jay says.

      Know how to tap the brake

      All the steps circle back to the essential point that becoming sustainable takes a committed investment of time, money, and patience. Starting small helps, especially in a corporate culture that tends to move slowly. Jay says there’s nothing wrong with going from zero projects to one, even if it’s a small one in a specific department. It allows people to become accustomed to the idea of change. It also lets the company establish a framework, analyze results, and build momentum, making it easier to ramp up.

      The patience part can be hard since there’s a rightful sense of urgency involved. Companies want to show that they’re doing something, and want to affect climate change sooner rather than later. But Jay likens it to building a skyscraper. The desire is to get it up fast, but if the foundation is shaky, everything will crumble.

      “What we’re trying to do is strengthen that foundation so it can reach the height we need,” he says. More

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      in Energy

      Preparing students for the new nuclear

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      As nuclear power has gained greater recognition as a zero-emission energy source, the MIT Leaders for Global Operations (LGO) program has taken notice.

      Two years ago, LGO began a collaboration with MIT’s Department of Nuclear Science and Engineering (NSE) as a way to showcase the vital contribution of both business savvy and scientific rigor that LGO’s dual-degree graduates can offer this growing field.

      “We saw that the future of fission and fusion required business acumen and management acumen,” says Professor Anne White, NSE department head. “People who are going to be leaders in our discipline, and leaders in the nuclear enterprise, are going to need all of the technical pieces of the puzzle that our engineering department can provide in terms of education and training. But they’re also going to need a much broader perspective on how the technology connects with society through the lens of business.”

      The resulting response has been positive: “Companies are seeing the value of nuclear technology for their operations,” White says, and this often happens in unexpected ways.

      For example, graduate student Santiago Andrade recently completed a research project at Caterpillar Inc., a preeminent manufacturer of mining and construction equipment. Caterpillar is one of more than 20 major companies that partner with the LGO program, offering six-month internships to each student. On the surface, it seemed like an improbable pairing; what could Andrade, who was pursuing his master’s in nuclear science and engineering, do for a manufacturing company? However, Caterpillar wanted to understand the technical and commercial feasibility of using nuclear energy to power mining sites and data centers when wind and solar weren’t viable.

      “They are leaving no stone unturned in the search of financially smart solutions that can support the transition to a clean energy dependency,” Andrade says. “My project, along with many others’, is part of this effort.”

      “The research done through the LGO program with Santiago is enabling Caterpillar to understand how alternative technologies, like the nuclear microreactor, could participate in these markets in the future,” says Brian George, product manager for large electric power solutions at Caterpillar. “Our ability to connect our customers with the research will provide for a more accurate understanding of the potential opportunity, and helps provide exposure for our customers to emerging technologies.”

      With looming threats of climate change, White says, “We’re going to require more opportunities for nuclear technologies to step in and be part of those solutions. A cohort of LGO graduates will come through this program with technical expertise — a master’s degree in nuclear engineering — and an MBA. There’s going to be a tremendous talent pool out there to help companies and governments.”

      Andrade, who completed an undergraduate degree in chemical engineering and had a strong background in thermodynamics, applied to LGO unsure of which track to choose, but he knew he wanted to confront the world’s energy challenge. When MIT Admissions suggested that he join LGO’s new nuclear track, he was intrigued by how it could further his career.

      “Since the NSE department offers opportunities ranging from energy to health care and from quantum engineering to regulatory policy, the possibilities of career tracks after graduation are countless,” he says.

      He was also inspired by the fact that, as he says, “Nuclear is one of the less-popular solutions in terms of our energy transition journey. One of the things that attracted me is that it’s not one of the most popular, but it’s one of the most useful.”

      In addition to his work at Caterpillar, Andrade connected deeply with professors. He worked closely with professors Jacopo Buongiorno and John Parsons as a research assistant, helping them develop a business model to successfully support the deployment of nuclear microreactors. After graduation, he plans to work in the clean energy sector with an eye to innovations in the nuclear energy technology space.

      His LGO classmate, Lindsey Kennington, a control systems engineer, echoes his sentiments: This is a revolutionary time for nuclear technology.

      “Before MIT, I worked on a lot of nuclear waste or nuclear weapons-related projects. All of them were fission-related. I got disillusioned because of all the bureaucracy and the regulation,” Kennington says. “However, now there are a lot of new nuclear technologies coming straight out of MIT. Commonwealth Fusion Systems, a fusion startup, represents a prime example of MIT’s close relationship to new nuclear tech. Small modular reactors are another emerging technology being developed by MIT. Exposure to these cutting-edge technologies was the main sell factor for me.”

      Kennington conducted an internship with National Grid, where she used her expertise to evaluate how existing nuclear power plants could generate hydrogen. At MIT, she studied nuclear and energy policy, which offered her additional perspective that traditional engineering classes might not have provided. Because nuclear power has long been a hot-button issue, Kennington was able to gain nuanced insight about the pathways and roadblocks to its implementation.

      “I don’t think that other engineering departments emphasize that focus on policy quite as much. [Those classes] have been one of the most enriching parts of being in the nuclear department,” she says.

      Most of all, she says, it’s a pivotal time to be part of a new, blossoming program at the forefront of clean energy, especially as fusion research grows more prevalent.

      “We’re at an inflection point,” she says. “Whether or not we figure out fusion in the next five, 10, or 20 years, people are going to be working on it — and it’s a really exciting time to not only work on the science but to actually help the funding and business side grow.”

      White puts it simply.

      “This is not your parents’ nuclear,” she says. “It’s something totally different. Our discipline is evolving so rapidly that people who have technical expertise in nuclear will have a huge advantage in this next generation.” More

    • 88 Shares159 Views

      in Environment

      Sustainable supply chains put the customer first

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      When we consider the supply chain, we typically think of factories, ships, trucks, and warehouses. Yet, the customer side is equally important, especially in efforts to make our distribution networks more sustainable. Customers are an untapped resource in building sustainability, says Josué C. Velázquez Martínez, a research scientist at MIT Center for Transportation and Logistics. 

      Velázquez Martínez, who is director of MIT’s Sustainable Supply Chain Lab, investigates how customer-facing supply chains can be made more environmentally and socially sustainable. One way is a Green Button project that explores how to optimize e-commerce delivery schedules to reduce carbon emissions and persuade customers to use less carbon-intensive four- or five-day shipping options instead of one or two days. Velázquez Martínez has also launched the MIT Low Income Firms Transformation (LIFT) Lab that is researching ways to improve micro-retailer supply chains in the developing world to provide owners with the necessary tools for survival.  

      “The definition of sustainable supply chain keeps evolving because things that were sustainable 20 to 30 years ago are not as sustainable now,” says Velázquez Martínez. “Today, there are more companies that are capturing information to build strategies for environmental, economic, and social sustainability. They are investing in alternative energy and other solutions to make the supply chain more environmentally friendly and are tracking their suppliers and identifying key vulnerabilities. A big part of this is an attempt to create fairer conditions for people who work in supply chains or are dependent on them.”

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      The move toward sustainable supply chain is being driven as much by people as by companies, whether they are playing the role of selective consumer or voting citizens. The consumer aspect is often overlooked, says Velázquez Martínez. “Consumers are the ones who move the supply chain. We are looking at how companies can provide transparency to involve customers in their sustainability strategy.” 

      Proposed solutions for sustainability are not always as effective as promised. Some fashion rental schemes fall into this category, says Velázquez Martínez. “There are many new rental companies that are trying to get more use out of clothes to offset the emissions associated with production. We recently researched the environmental impact of monthly subscription models where consumers pay a fee to receive clothes for a month before returning them, as well as peer-to-peer sharing models.” 

      The researchers found that while rental services generally have a lower carbon footprint than retail sales, hidden emissions from logistics played a surprisingly large role. “First, you need to deliver the clothes and pick them up, and there are high return rates,” says Velázquez Martínez. “When you factor in dry cleaning and packaging emissions, the rental models in some cases have a worse carbon footprint than buying new clothes.” Peer-to-peer sharing could be better, he adds, but that depends on how far the consumers travel to meet-up points. 

      Typically, says Velázquez Martínez, garment types that are frequently used are not well suited to rental models. “But for specialty clothes such as wedding dresses or prom dresses, it is better to rent.” 

      Waiting a few days to save the planet 

      Even before the pandemic, online retailing gained a second wind due to low-cost same- and next-day delivery options. While e-commerce may have its drawbacks as a contributor to social isolation and reduced competition, it has proven itself to be far more eco-friendly than brick-and-mortar shopping, not to mention a lot more convenient. Yet rapid deliveries are cutting into online-shopping’s carbon-cutting advantage.

      In 2019, MIT’s Sustainable Supply Chain Lab launched a Green Bottle project to study the rapid delivery phenomenon. The project has been “testing whether consumers would be willing to delay their e-commerce deliveries to reduce the environmental impact of fast shipping,” says Velázquez Martínez. “Many companies such as Walmart and Target have followed Amazon’s 2019 strategy of moving from two-day to same-day delivery. Instead of sending a fully loaded truck to a neighborhood every few days, they now send multiple trucks to that neighborhood every day, and there are more days when trucks are targeting each neighborhood. All this increases carbon emissions and makes it hard for shippers to consolidate. ”  

      Working with Coppel, one of Mexico’s largest retailers, the Green Button project inspired a related Consolidation Ecommerce Project that built a large-scale mathematical model to provide a strategy for consolidation. The model determined what delivery time window each neighborhood demands and then calculated the best day to deliver to each neighborhood to meet the desired window while minimizing carbon emissions. 

      No matter what mixture of delivery times was used, the consolidation model helped retailers schedule deliveries more efficiently. Yet, the biggest cuts in emissions emerged when customers were willing to wait several days.

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      “When we ran a month-long simulation comparing our model for four-to-five-day delivery with Coppel’s existing model for one- or two-day delivery, we saw savings in fuel consumption of over 50 percent on certain routes” says Velázquez Martínez. “This is huge compared to other strategies for squeezing more efficiency from the last-mile supply chain, such as routing optimization, where savings are close to 5 percent. The optimal solution depends on factors such as the capacity for consolidation, the frequency of delivery, the store capacity, and the impact on inbound operations.” 

      The researchers next set out to determine if customers could be persuaded to wait longer for deliveries. Considering that the price differential is low or nonexistent, this was a considerable challenge. Yet, the same day habit is only a few years old, and some consumers have come to realize they don’t always need rapid deliveries. “Some consumers who order by rapid delivery find they are too busy to open the packages right away,” says Velázquez Martínez.  

      Trees beat kilograms of CO2

      The researchers set out to find if consumers would be willing to sacrifice a bit of convenience if they knew they were helping to reduce climate change. The Green Button project tested different public outreach strategies. For one test group, they reported the carbon impact of delivery times in kilograms of carbon dioxide (CO2). Another group received the information expressed in terms of the energy required to recycle a certain amount of garbage. A third group learned about emissions in terms of the number of trees required to trap the carbon. “Explaining the impact in terms of trees led to almost 90 percent willing to wait another day or two,” says Velázquez Martínez. “This is compared to less than 40 percent for the group that received the data in kilograms of CO2.” 

      Another surprise was that there was no difference in response based on income, gender, or age. “Most studies of green consumers suggest they are predominantly high income, female, highly educated, or younger,” says Velázquez Martínez. “However, our results show that the differences were the same between low and high income, women and men, and younger and older people. We have shown that disclosing emissions transparently and making the consumer a part of the strategy can be a new opportunity for more consumer-driven logistics sustainability.” 

      The researchers are now developing similar models for business-to-business (B2B) e-commerce. “We found that B2B supply chain emissions are often high because many shipping companies require strict delivery windows,” says Velázquez Martínez.  

      The B2B models drill down to examine the Corporate Value Chain (Scope 3) emissions of suppliers. “Although some shipping companies are now asking their suppliers to review emissions, it is a challenge to create a transparent supply chain,” says Velázquez Martínez.  “Technological innovations have made it easier, starting with RFID [radio frequency identification], and then real-time GPS mapping and blockchain. But these technologies need to be more accessible and affordable, and we need more companies willing to use them.” 

      Some companies have been hesitant to dig too deeply into their supply chain, fearing they might uncover a scandal that might risk their reputation, says Velázquez Martínez. Other organizations are forced to look at the issue when nongovernmental organizations research sustainability issues such as social injustice in sweat shops and conflict mineral mines. 

      One challenge to building a transparent supply chain is that “in many companies, the sustainability teams are separate from the rest of the company,” says Velázquez Martínez. “Even if the CEOs receive information on sustainability issues, it often doesn’t filter down because the information does not belong to the planners or managers. We are pushing companies to not only account for sustainability factors in supply chain network design but also examine daily operations that affect sustainability. This is a big topic now: How can we translate sustainability information into something that everybody can understand and use?” 

      LIFT Lab lifts micro-retailers  

      In 2016, Velázquez Martínez launched the MIT GeneSys project to gain insights into micro and small enterprises (MSEs) in developing countries. The project released a GeneSys mobile app, which was used by more than 500 students throughout Latin America to collect data on more than 800 microfirms. In 2022, he launched the LIFT Lab, which focuses more specifically on studying and improving the supply chain for MSEs.  

      Worldwide, some 90 percent of companies have fewer than 10 employees. In Latin America and the Caribbean, companies with fewer than 50 employees represent 99 percent of all companies and 47 percent of employment. 

      Although MSEs represent much of the world’s economy, they are poorly understood, notes Velázquez Martínez. “Those tiny businesses are driving a lot of the economy and serve as important customers for the large companies working in developing countries. They range from small businesses down to people trying to get some money to eat by selling cakes or tacos through their windows.”  

      The MIT LIFT Lab researchers investigated whether MSE supply chain issues could help shed light on why many Latin American countries have been limited to marginal increases in gross domestic product. “Large companies from the developed world that are operating in Latin America, such as Unilever, Walmart, and Coca-Cola, have huge growth there, in some cases higher than they have in the developed world,” says Velázquez Martínez. “Yet, the countries are not developing as fast as we would expect.” 

      The LIFT Lab data showed that while the multinationals are thriving in Latin America, the local MSEs are decreasing in productivity. The study also found the trend has worsened with Covid-19.  

      The LIFT Lab’s first big project, which is sponsored by Mexican beverage and retail company FEMSA, is studying supply chains in Mexico. The study spans 200,000 micro-retailers and 300,000 consumers. In a collaboration with Tecnológico de Monterrey, hundreds of students are helping with a field study.  

      “We are looking at supply chain management and business capabilities and identifying the challenges to adoption of technology and digitalization,” says Velázquez Martínez. “We want to find the best ways for micro-firms to work with suppliers and consumers by identifying the consumers who access this market, as well as the products and services that can best help the micro-firms drive growth.” 

      Based on the earlier research by GeneSys, Velázquez Martínez has developed some hypotheses for potential improvements for micro-retailer supply chain, starting with payment terms. “We found that the micro-firms often get the worst purchasing deals. Owners without credit cards and with limited cash often buy in smaller amounts at much higher prices than retailers like Walmart. The big suppliers are squeezing them.” 

      While large retailers usually get 60 to 120 days to pay, micro-retailers “either pay at the moment of the transaction or in advance,” says Velázquez Martínez. “In a study of 500 micro-retailers in five countries in Latin America, we found the average payment time was minus seven days payment in advance. These terms reduce cash availability and often lead to bankruptcy.” 

      LIFT Lab is working with suppliers to persuade them to offer a minimum payment time of two weeks. “We can show the suppliers that the change in terms will let them move more product and increase sales,” says Velázquez Martínez. “Meanwhile, the micro-retailers gain higher profits and become more stable, even if they may pay a bit more.” 

      LIFT Lab is also looking at ways that micro-retailers can leverage smartphones for digitalization and planning. “Some of these companies are keeping records on napkins,” says Velázquez Martínez. “By using a cellphone, they can charge orders to suppliers and communicate with consumers. We are testing different dashboards for mobile apps to help with planning and financial performance. We are also recommending services the stores can provide, such as paying electricity or water bills. The idea is to build more capabilities and knowledge and increase business competencies for the supply chain that are tailored for micro-retailers.” 

      From a financial perspective, micro-retailers are not always the most efficient way to move products. Yet they also play an important role in building social cohesion within neighborhoods. By offering more services, the corner bodega can bring people together in ways that are impossible with e-commerce and big-box stores.  

      Whether the consumers are micro-firms buying from suppliers or e-commerce customers waiting for packages, “transparency is key to building a sustainable supply chain,” says Velázquez Martínez. “To change consumer habits, consumers need to be better educated on the impacts of their behaviors. With consumer-facing logistics, ‘The last shall be first, and the first last.’” More

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      Solar-powered desalination device wins MIT $100K competition

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      The winner of this year’s MIT $100K Entrepreneurship Competition is commercializing a new water desalination technology.

      Nona Desalination says it has developed a device capable of producing enough drinking water for 10 people at half the cost and with 1/10th the power of other water desalination devices. The device is roughly the size and weight of a case of bottled water and is powered by a small solar panel.

      “Our mission is to make portable desalination sustainable and easy,” said Nona CEO and MIT MBA candidate Bruce Crawford in the winning pitch, delivered to an audience in the Kresge Auditorium and online.

      The traditional approach for water desalination relies on a power-intensive process called reverse osmosis. In contrast, Nona uses a technology developed in MIT’s Research Laboratory of Electronics that removes salt and bacteria from seawater using an electrical current.

      “Because we can do all this at super low pressure, we don’t need the high-pressure pump [used in reverse osmosis], so we don’t need a lot of electricity,” says Crawford, who co-founded the company with MIT Research Scientist Junghyo Yoon. “Our device runs on less power than a cell phone charger.”

      The founders cited problems like tropical storms, drought, and infrastructure crises like the one in Flint, Michigan, to underscore that clean water access is not just a problem in developing countries. In Houston, after Hurricane Harvey caused catastrophic flooding in 2017, some residents were advised not to drink their tap water for months.

      The company has already developed a small prototype that produces clean drinking water. With its winnings, Nona will build more prototypes to give to early customers.

      The company plans to sell its first units to sailors before moving into the emergency preparedness space in the U.S., which it estimates to be a $5 billion industry. From there, it hopes to scale globally to help with disaster relief. The technology could also possibly be used for hydrogen production, oil and gas separation, and more.

      The MIT $100K is MIT’s largest entrepreneurship competition. It began in 1989 and is organized by students with support from the Martin Trust Center for MIT Entrepreneurship and the MIT Sloan School of Management. Each team must include at least one current MIT student.

      The second-place $25,000 prize went to Inclusive.ly, a company helping people and organizations create a more inclusive environment.

      The company uses conversational artificial intelligence and natural language processing to detect words and phrases that contain bias, and can measure the level of bias or inclusivity in communication.

      “We’re here to create a world where everyone feels invited to the conversation,” said MBA candidate Yeti Khim, who co-founded the company with fellow MBA candidates Joyce Chen and Priya Bhasin.

      Inclusive.ly can scan a range of communications and make suggestions for improvement. The algorithm can detect discrimination, microaggression, and condescension, and the founders say it analyzes language in a more nuanced way than tools like Grammarly.

      The company is currently developing a plugin for web browsers and is hoping to partner with large enterprise customers later this year. It will work with internal communications like emails as well as external communications like sales and marketing material.

      Inclusive.ly plans to sell to organizations on a subscription model and notes that diversity and inclusion is becoming a higher priority in many companies. Khim cited studies showing that lack of inclusion hinders employee productivity, retention, and recruiting.

      “We could all use a little bit of help to create the most inclusive version of ourselves,” Khim said.

      The third-place prize went to RTMicrofluidics, which is building at-home tests for a range of diseases including strep throat, tuberculosis, and mononucleosis. The test is able to detect a host of bacterial and viral pathogens in saliva and provide accurate test results in less than 30 minutes.

      The audience choice award went to Sparkle, which has developed a molecular dye technology that can illuminate tumors, making them easier to remove during surgery.

      This year’s $100K event was the culmination of a process that began last March, when 60 teams applied for the program. Out of that pool, 20 semifinalists were given additional mentoring and support before eight finalists were selected to pitch.

      The other finalist teams were:

      Astrahl, which is developing high resolution and affordable X-ray systems by integrating nanotechnologies with scintillators;

      Encreto Therapeutics, which is discovering medications to satiate appetite for people with obesity;

      Iridence, which has patented a biomaterial to replace minerals like mica as a way to make the beauty industry more sustainable; and

      Mantel, which is developing a liquid material for more efficient carbon removal that operates at high temperatures. More

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      A better way to separate gases

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      Industrial processes for chemical separations, including natural gas purification and the production of oxygen and nitrogen for medical or industrial uses, are collectively responsible for about 15 percent of the world’s energy use. They also contribute a corresponding amount to the world’s greenhouse gas emissions. Now, researchers at MIT and Stanford University have developed a new kind of membrane for carrying out these separation processes with roughly 1/10 the energy use and emissions.

      Using membranes for separation of chemicals is known to be much more efficient than processes such as distillation or absorption, but there has always been a tradeoff between permeability — how fast gases can penetrate through the material — and selectivity — the ability to let the desired molecules pass through while blocking all others. The new family of membrane materials, based on “hydrocarbon ladder” polymers, overcomes that tradeoff, providing both high permeability and extremely good selectivity, the researchers say.

      The findings are reported today in the journal Science, in a paper by Yan Xia, an associate professor of chemistry at Stanford; Zachary Smith, an assistant professor of chemical engineering at MIT; Ingo Pinnau, a professor at King Abdullah University of Science and Technology, and five others.

      Gas separation is an important and widespread industrial process whose uses include removing impurities and undesired compounds from natural gas or biogas, separating oxygen and nitrogen from air for medical and industrial purposes, separating carbon dioxide from other gases for carbon capture, and producing hydrogen for use as a carbon-free transportation fuel. The new ladder polymer membranes show promise for drastically improving the performance of such separation processes. For example, separating carbon dioxide from methane, these new membranes have five times the selectivity and 100 times the permeability of existing cellulosic membranes for that purpose. Similarly, they are 100 times more permeable and three times as selective for separating hydrogen gas from methane.

      The new type of polymers, developed over the last several years by the Xia lab, are referred to as ladder polymers because they are formed from double strands connected by rung-like bonds, and these linkages provide a high degree of rigidity and stability to the polymer material. These ladder polymers are synthesized via an efficient and selective chemistry the Xia lab developed called CANAL, an acronym for catalytic arene-norbornene annulation, which stitches readily available chemicals into ladder structures with hundreds or even thousands of rungs. The polymers are synthesized in a solution, where they form rigid and kinked ribbon-like strands that can easily be made into a thin sheet with sub-nanometer-scale pores by using industrially available polymer casting processes. The sizes of the resulting pores can be tuned through the choice of the specific hydrocarbon starting compounds. “This chemistry and choice of chemical building blocks allowed us to make very rigid ladder polymers with different configurations,” Xia says.

      To apply the CANAL polymers as selective membranes, the collaboration made use of Xia’s expertise in polymers and Smith’s specialization in membrane research. Holden Lai, a former Stanford doctoral student, carried out much of the development and exploration of how their structures impact gas permeation properties. “It took us eight years from developing the new chemistry to finding the right polymer structures that bestow the high separation performance,” Xia says.

      The Xia lab spent the past several years varying the structures of CANAL polymers to understand how their structures affect their separation performance. Surprisingly, they found that adding additional kinks to their original CANAL polymers significantly improved the mechanical robustness of their membranes and boosted their selectivity  for molecules of similar sizes, such as oxygen and nitrogen gases, without losing permeability of the more permeable gas. The selectivity actually improves as the material ages. The combination of high selectivity and high permeability makes these materials outperform all other polymer materials in many gas separations, the researchers say.

      Today, 15 percent of global energy use goes into chemical separations, and these separation processes are “often based on century-old technologies,” Smith says. “They work well, but they have an enormous carbon footprint and consume massive amounts of energy. The key challenge today is trying to replace these nonsustainable processes.” Most of these processes require high temperatures for boiling and reboiling solutions, and these often are the hardest processes to electrify, he adds.

      For the separation of oxygen and nitrogen from air, the two molecules only differ in size by about 0.18 angstroms (ten-billionths of a meter), he says. To make a filter capable of separating them efficiently “is incredibly difficult to do without decreasing throughput.” But the new ladder polymers, when manufactured into membranes produce tiny pores that achieve high selectivity, he says. In some cases, 10 oxygen molecules permeate for every nitrogen, despite the razor-thin sieve needed to access this type of size selectivity. These new membrane materials have “the highest combination of permeability and selectivity of all known polymeric materials for many applications,” Smith says.

      “Because CANAL polymers are strong and ductile, and because they are soluble in certain solvents, they could be scaled for industrial deployment within a few years,” he adds. An MIT spinoff company called Osmoses, led by authors of this study, recently won the MIT $100K entrepreneurship competition and has been partly funded by The Engine to commercialize the technology.

      There are a variety of potential applications for these materials in the chemical processing industry, Smith says, including the separation of carbon dioxide from other gas mixtures as a form of emissions reduction. Another possibility is the purification of biogas fuel made from agricultural waste products in order to provide carbon-free transportation fuel. Hydrogen separation for producing a fuel or a chemical feedstock, could also be carried out efficiently, helping with the transition to a hydrogen-based economy.

      The close-knit team of researchers is continuing to refine the process to facilitate the development from laboratory to industrial scale, and to better understand the details on how the macromolecular structures and packing result in the ultrahigh selectivity. Smith says he expects this platform technology to play a role in multiple decarbonization pathways, starting with hydrogen separation and carbon capture, because there is such a pressing need for these technologies in order to transition to a carbon-free economy.

      “These are impressive new structures that have outstanding gas separation performance,” says Ryan Lively, am associate professor of chemical and biomolecular engineering at Georgia Tech, who was not involved in this work. “Importantly, this performance is improved during membrane aging and when the membranes are challenged with concentrated gas mixtures. … If they can scale these materials and fabricate membrane modules, there is significant potential practical impact.”

      The research team also included Jun Myun Ahn and Ashley Robinson at Stanford, Francesco Benedetti at MIT, now the chief executive officer at Osmoses, and Yingge Wang at King Abdullah University of Science and Technology in Saudi Arabia. The work was supported by the Stanford Natural Gas Initiative, the Sloan Research Fellowship, the U.S. Department of Energy Office of Basic Energy Sciences, and the National Science Foundation. More

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      in Energy

      Investors awaken to the risks of climate change

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      Poppy Allonby, a senior financial executive and the former managing director of BlackRock, has been analyzing the link between climate change and investing for more than two decades. “For a lot of that, it was quite lonely,” Allonby said during her December address at the MIT Energy Initiative Fall Colloquium. “There weren’t that many other people looking at this field. And over the last three or four years, that’s completely changed.”

      Increasingly, Allonby said, investors are opening their eyes to the long-term risks of climate change — risks that threaten not only the planet, but also their portfolios. And as more institutional investors come to see climate change as a threat to their beneficiaries, they are taking action to fight it. Still, she cautioned that much more work remains to be done.

      “Various investors are at very different stages in considering climate change,” Allonby said. “Once they realize this is something they need to think about … they need to do a risk assessment, then develop a strategy.” 

      “When you look at different institutions,” she said, “some are just at the very beginning of this journey.”

      A changing landscape

      Although there is a compelling moral case to be made for taking steps to mitigate climate change, Allonby noted that institutional investors such as pension funds are bound by a fiduciary duty to their beneficiaries. That is to say, they are obligated to put their client or member interests ahead of their own.

      “I talk about fiduciary duty, because one of the things that has really changed in the investment space is that more and more investors are beginning to see climate change and climate risk as [impacting] their fiduciary duty,” said Allonby. “That has been a shift. In my mind, it makes total sense. If you’re a long-term investor … and you’re thinking about beneficiaries that need assets over the next 10 or 20 years, and thinking about risks that might materialize — and climate change, in particular — then that makes a lot of sense. But that is not where we were five or 10 years ago.”

      Allonby spent more than 20 years at the multinational investment management corporation BlackRock. For 17 of those years, she was a senior portfolio manager responsible for managing multibillion-dollar funds investing globally in companies across the traditional energy sector, and also those involved in sustainable energy and mitigating climate change. Most recently, she was head of the corporation’s Global Product Group on several continents, where she provided oversight for nearly $1 trillion assets and played a critical role in developing BlackRock’s sustainable product strategy.

      “Where I like to think the finance industry is heading is integration,” she said. “This means thinking holistically about pretty much every decision you make as an investor, and thinking about how climate risk is going to impact that investment. That is a sea change in the mentality around how people invest.”

      Divestment versus engagement

      For many years, activists have pushed for institutions — including MIT — to divest from fossil fuel companies. By keeping fossil fuel companies out of their portfolios, these activists argue, institutions and individuals can exert social, political, and economic pressure on these corporations and help to accelerate the shift to renewable energy.

      However, Allonby argued instead for ongoing engagement with fossil fuel companies, reasoning that this better positions investors to push for change. “My personal view with divesting from oil and gas companies is, that’s not very effective,” Allonby said. “I think there might be examples where you have very specific companies which you don’t think will be involved in the transition [to net zero], and [divestment] might make sense. Or if you’ve got an institutional investor where it is imperative that their investment is entirely aligned with their values — so, certain charities — it might make sense. But if you really care about change, I think you need to keep a seat at the table.”

      In a way, Allonby said, divesting from fossil fuel companies lets leaders at those organizations off the hook, reducing the pressure on them to make meaningful changes to their operations. “Imagine a company that is incredibly polluting and not sustainable, and they have shareholders that are not happy, but they don’t do anything, and those shareholders decide to divest,” she said. “What happens as a result of that, potentially, is the company goes, ‘Oh, that was easy! I didn’t have to do anything, and [the activists] have gone away.’ And potentially, those assets end up being owned by people who care less. So that is a risk, when you think about divestment.”

      Challenges and opportunities         

      Allonby outlined several challenges with climate-focused investing, but also noted a number of opportunities — both for investors looking to make money, and those looking to make a change.

      Among the challenges: For one, some investors simply still need to be convinced that climate change is a problem they should be working to solve. Also, Allonby said, there is a lack both of a formalized methodology and of specialized investment products for climate-focused investing, although she noted that both of these areas are improving. Finally, she said, it remains a challenge to encourage investors to direct capital toward clean-energy projects in developing countries. 

      Investors can both set themselves up for financial success and mitigate climate change, Allonby said, through savvy investments in either distressed or underpriced assets. “If you can buy assets that are discounted or cheaper because people have real concerns about their environmental footprint, then you can work with those companies to improve it and therefore reduce the risk and improve the valuation,” she said.

      Allonby, pointing to the high cost of waterfront property in areas that are vulnerable to rising sea levels, also suggested that the long-term risks of climate change have not been fully priced into many assets. “My view is that we haven’t really gotten our arms around that,” she said. “From a purely investment perspective, that’s also an opportunity.”

      Additionally, Allonby noted the recent rise of ESG funds, which invest with environmental, social, and corporate governance guidelines in mind. Some of these funds, she noted, have outperformed the larger market over the past several years.

      “When we talk about climate change, one has a range of emotions,” Allonby said. “Sometimes it can feel like we’re not making enough progress. And one of the nice things about being here at MIT is that whenever I’m here, I always feel hopeful about the future, and quite hopeful about all of the technologies and work that you are doing to transition energy systems and move things forward. When you look at what’s happening in the financial services sector, there’s still a huge amount to do, but it’s also quite a hopeful story.” More