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      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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      in Energy

      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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      in Energy

      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

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      in Environment

      Reducing food waste to increase access to affordable foods

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      About a third of the world’s food supply never gets eaten. That means the water, labor, energy, and fertilizer that went into growing, processing, and distributing the food is wasted.

      On the other end of the supply chain are cash-strapped consumers, who have been further distressed in recent years by factors like the Covid-19 pandemic and inflation.

      Spoiler Alert, a company founded by two MIT alumni, is helping companies bridge the gap between food waste and food insecurity with a platform connecting major food and beverage brands with discount grocers, retailers, and nonprofits. The platform helps brands discount or donate excess and short-dated inventory days, weeks, and months before it expires.

      “There is a tremendous amount of underutilized data that exists in the manufacturing and distribution space that results in good food going to waste,” says Ricky Ashenfelter MBA ’15, who co-founded the company with Emily Malina MBA ’15.

      Spoiler Alert helps brands manage distressed inventory data, create offers for potential buyers, and review and accept bids. The platform is designed to work with companies’ existing inventory and fulfillment systems, using automation and pricing intelligence to further streamline sales.

      “At a high level, we’re a waste-prevention software built for sales and supply-chain teams,” Ashenfelter says. “You can think of it as a private [business-to-business] eBay of sorts.”

      Spoiler Alert is working with global companies like Nestle, Kraft Heinz, and Danone, as well as discount grocers like the United Grocery Outlet and Misfits Market. Those brands are already using the platform to reduce food waste and get more food on people’s tables.

      “Project Drawdown [a nonprofit working on climate solutions] has identified food waste as the number one priority to address the global climate crisis, so these types of corporate initiatives can be really powerful from an environmental standpoint,” Ashenfelter says, noting the nonprofit estimates food waste accounts for 8 percent of global greenhouse gas emissions. “Contrast that with growing levels of food insecurity and folks not being able to access affordable nutrition, and you start to see how tackling supply-chain inefficiency can have a dramatic impact from both an environmental and a social lens. That’s what motivates us.”

      Untapped data for change

      Ashenfelter came to MIT’s Sloan School of Management after several years in sustainability software and management consulting within the retail and consumer products industries.

      “I was really attracted to transitioning into something much more entrepreneurial, and to leverage not only Sloan’s focus on entrepreneurship, but also the broader MIT ecosystem’s focus on technology, entrepreneurship, clean tech innovation, and other themes along that front,” he says.

      Ashenfelter met Malina at one of Sloan’s admitted students events in 2013, and the founders soon set out to use data to decrease food waste.

      “For us, the idea was clear: How do we better leverage data to manage excess and short-dated inventory?” Ashenfelter says. “How we go about that has evolved over the last six years, but it’s all rooted in solving an enormous climate problem, solving a major food insecurity problem, and from a capitalistic standpoint, helping businesses cut costs and generate revenue from otherwise wasted products.”

      The founders spent many hours in the Martin Trust Center for MIT Entrepreneurship with support from the Sloan Sustainability Initiative, and used Spoiler Alert as a case study in nearly every class they took, thinking through product development, sales, marketing, pricing, and more through their coursework.

      “We brought our idea into just about every action learning class that we could at Sloan and MIT,” Ashenfelter says.

      They also participated in the MIT $100K Entrepreneurship Competition and received support from the Venture Mentoring Service and the IDEAS Global Challenge program.

      Upon graduation, the founders initially began building a platform to facilitate donations of excess inventory, but soon learned big companies’ processes for discounting that inventory were also highly manual. Today, more than 90 percent of Spoiler Alert’s transaction volume is discounted, with the remainder donated.

      Different teams within an organization can upload excess inventory reports to Spoiler Alert’s system, eliminating the need to manually aggregate datasets and preparing what the industry refers to as “blowout lists” to sell. Spoiler Alert uses machine-learning-based tools to help both parties with pricing and negotiations to close deals more quickly.

      “Companies are taking pretty manual and slow approaches to deciding [what to do with excess inventory],” Ashenfelter says. “And when you have slow decision-making, you’re losing days or even weeks of shelf life on that product. That can be the difference between selling product versus donating, and donating versus dumping.”

      Once a deal has been made, Spoiler Alert automatically generates the forms and workflows needed by fulfillment teams to get the product out the door. The relationships companies build on the platform are also a major driver for cutting down waste.

      “We’re providing suppliers with the ability to control where their discounted and donated product ends up,” Ashenfelter says. “That’s really powerful because it allows these CPG brands to ensure that this product is, in many cases, getting to affordable nutrition outlets in underserved communities.”

      Ashenfelter says the majority of inventory goes to regional and national discount grocers, supplemented with extensive purchasing from local and nonprofit grocery chains.

      “Everything we do is oriented around helping sell as much product as possible to a reputable set of buyers at the most fair, equitable prices possible,” Ashenfelter says.

      Scaling for impact

      The pandemic has disrupted many aspects of the food supply chains. But Ashenfelter says it has also accelerated the adoption of digital solutions that can better manage such volatility.

      When Campbell began using Spoiler Alert’s system in 2019, for instance, it achieved a 36 percent increase in discount sales and a 27 percent increase in donations over the first five months.

      Ashenfelter says the results have proven that companies’ sustainability targets can go hand in hand with initiatives that boost their bottom lines. In fact, because Spoiler Alert focuses so much on the untapped revenue associated with food waste, many customers don’t even realize Spoiler Alert is a sustainability company until after they’ve signed on.

      “What’s neat about this program is that it becomes an incredibly powerful case study internally for how sustainability and operational outcomes aren’t in conflict and can drive both business results as well as overall environmental impact,” Ashenfelter says.

      Going forward, Spoiler Alert will continue building out algorithmic solutions that could further cut down on waste internationally and across a wider array of products.

      “At every step in our process, we’re collecting a tremendous amount of data in terms of what is and isn’t selling, at what price point, to which buyers, out of which geographies, and with how much remaining shelf life,” Ashenfelter explains. “We are only starting to scratch the surface in terms of bringing our recommendations engine to life for our suppliers and buyers. Ultimately our goal is to power the waste-free economy, and rooted in that is making better decisions faster, in collaboration with a growing ecosystem of supply chain partners, and with as little manual intervention as possible.” More

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      MIT Energy Night 2021: Connecting global innovators to local talent

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      On Oct. 29, leading clean technology innovators from around the world convened virtually and in-person on the MIT campus for the MIT Energy and Climate (MITEC) Club’s Energy Night 2021.

      The event featured an array of participants and attendees — from MIT students and faculty to investors, engineers, and established and early-stage companies — all committed to developing cutting-edge technologies to address climate and energy challenges.   

      The event began with a series of virtual presentations and panels that featured speakers from premier players in the climate and technology spheres. Those presenting included policymakers and market enablers, such as ARPA-E and Actuate, investors and accelerators, like TDK Ventures and Prime Coalition, along with numerous startups, including Commonwealth Fusion Systems and Infinite Cooling. The goal was to discuss how nascent technologies could crystalize into viable solutions.

      “A lot of project ideas have the potential to be commercialized,” explains Anne Liu, a research assistant at the MIT Materials Systems Lab and the event’s co-managing director. “So, the goal of our virtual session was to explore the business side of the energy ecosystem by inviting leaders to discuss how to turn ideas into successful companies.”

      While the virtual session explored commercialization, the poster session presented early-stage innovation. It featured more than 70 posters by scientists, startups, and engineers from across the MIT community and far beyond.

      “The poster session is one of the most exciting parts of Energy Night,” says Naomi Lutz, a fourth-year undergraduate in the Department of Mechanical Engineering. “It provides a great opportunity to step back and learn more about what others are doing in specific areas of energy.”

      The work featured spanned the climate and energy sphere, ranging from nuclear fusion to carbon capture — and even included a proposal for solar smokestacks.

      “There are so many topics in energy and climate. And, yet it’s common to only connect with those in your specific track,” says Alexandra Steckmest, one of the event’s organizers and an MBA candidate at MIT Sloan School of Management. “So, we designed the poster session as a platform for people to connect with those from different realms of the energy sector.”

      To the MITEC team, presenting this broader spectrum of research isn’t just exciting — it’s necessary.

      “This is such a rapidly changing industry,” says Steckmest. “So, it’s important to have so many industry experts share information about the changes that are going on in it.”

      The event’s hybrid format, therefore, responded to more than just the Covid-19 pandemic: it also catered to the global, collaborative, and continuously evolving nature of the energy and cleantech industries.

      “After some discussion, we decided on this hybrid format,” explains Liu. “We wanted to ensure that we could have the interactivity of an in-person event while also reaching the much broader audience we had cultivated during last year’s entirely remote format.”

      The new hybrid format helped the team cast a wide net. In total, 400 people attended the in-person poster session while nearly an additional 400 people attended virtually from around the world.

      Yet, despite an increasingly global scope, Energy Night still retained a distinctly local composition. Numerous companies present at the virtual session hailed from across Greater Boston, and, quite often, near MIT: Commonwealth Fusion Systems and Infinite Cooling retain offices within Somerville or Cambridge, and each spawned from MIT.

      “There are so many companies coming out of [MIT] that go on to establish themselves in Boston and Cambridge,” notes Steckmest. “That makes [Energy Night] well-positioned to build connections and generate value for local accelerators.”

      MITEC continues to cultivate these local connections while also contributing to Boston’s unique cleantech culture.

      “What sets Boston apart is its emphasis on long-term solutions that are not always easily achievable through conventional venture capital,” says Liu.

      When planning Energy Night, she and her team sought to invite both short- and long-term solutions to showcase Boston’s aspirational culture while also offering a venue for established investors to seek new, more readily deployable technologies.

      Perhaps the greatest testament to Energy Night’s ongoing success is its tendency to come full circle.

      “Over the past few years, we’ve featured serial presenters from MIT that have gone on to found their own companies,” explains Liu. “So, for a lot of projects, we see a transition from an idea to a successful business.”

      Form Energy, for instance, is an MIT spinoff founded in 2017 with the mission of creating low-cost, long-term energy storage. Its stature grew greatly following its presence at Energy Night in 2019, after which it attracted $40 million in venture capital funding.

      “Whether you’re a first-year undergraduate or a long-time member of the energy and cleantech industries, we want Energy Night to generate these driving connections that lead to professional growth, as well as successful partnerships,” says Steckmest. More

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      Push to make supply chains more sustainable continues to gain momentum

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      Much of the effort to make businesses sustainable centers on their supply chains, which were severely disrupted during the Covid-19 pandemic. Yet, according to new research from the MIT Center for Transportation and Logistics (CTL), supply chain sustainability (SCS) investments hardly slowed, even as the pandemic raged.

      The finding, contained in the 2021 State of Supply Chain Sustainability report, puts companies on notice that they ignore the sustainability of their supply chains at their peril. This is particularly the case for enterprises with a low or moderate commitment to SCS, such as organizations classed as “Low Effort” and “Dreamer” in the new SCS Firm Typology that appears in the report for the first time. 

      The research also highlights the increasing pressure companies are under to devote resources to SCS. This pressure came from various stakeholders last year and suggests that sustainability in supply chains is a business trend, and not a fad.

      CTL publishes the 2021 State of Supply Chain Sustainability report in collaboration with the Council of Supply Chain Management Professionals (CSCMP), a leading professional membership association. This year’s report is sponsored by BlueYonder, C.H. Robinson, KPMG, Intel, and Sam’s Club.

      Sustainability efforts undaunted by Covid-19

      “We believe cooperation between sectors is vital to thoroughly understand the complexity and evolution of sustainability efforts more broadly,” says David Correll, CTL research scientist. “Our work with CSCMP and our sponsors helps us to embed this essential research and its findings within the context of the real-life practice of supply chain management.”

      The research included a large-scale international survey of supply chain professionals with over 2,400 respondents — more than double the number received for the previous report. The survey was conducted in late 2020. In addition, 21 in-depth executive interviews were completed, and relevant news items, social media content, and reports were analyzed for the report.

      More than 80 percent of survey respondents claimed the pandemic had no impact or increased their firms’ commitments to SCS: Eighty-three percent of the executives interviewed said that Covid-19 had either accelerated SCS activity or, at the very least, increased awareness and brought urgency to this growing field.

      The pressure to support sustainability in supply chains came from multiple sources, both internal and external, but increased the most among investors and industry associations. Internally, company executives were standout champions of SCS.

      Although there are many approaches to investing in SCS, interest in human rights protection and worker welfare, along with energy savings and renewable energy, increased significantly last year. Supplier development was the most common mechanism used by firms to deliver on their SCS promises.

      Increasing investment, some speed bumps

      Given the momentum behind SCS, the future will likely bring more investment in this increasingly important area of supply chain management. And practitioners — who bring deep domain expertise and well-rounded views of enterprises to the table — will become more influential as sustainability advocates.

      But there are some formidable obstacles to overcome, too. For example, it is notable that most of the momentum behind SCS appeared to come from large (1,000-plus employees) and very large (10,000-plus employees) companies covered by the research. Small- to medium-sized enterprises were far less committed, and more work is needed to bring them into the fold through a better understanding of the barriers they face.

      A broader concern is that more attention from stakeholders — notably consumers, investors, and regulators — will bring more scrutiny of firms’ SCS track records, and less tolerance of token efforts to make supply chains sustainable. Improved supply chain transparency and disclosure are critical to firms’ responses, the report suggests.

      Some high-profile issues, such as combating social injustices and climate change mitigation, will continue to stoke the pressure on companies to invest in meaningful SCS initiatives. It follows that the connection between companies’ SCS performance and their profitability is likely to strengthen over the next few years.

      Will companies follow through?

      As companies grapple with these issues, they will face some difficult decisions. For example, the chief operating officer of a consumer goods company interviewed for the report described operating through pandemic constraints as a “moral calculus” where some sustainability commitments had to be temporarily sacrificed to achieve others. Such a calculus will likely challenge many companies as they juggle their responses to SCS demands. A key question is to ascertain the degree to which companies’ recent net-zero commitments will translate into effective SCS actions over the next few years.

      The CTL and CSCMP research teams are laying the groundwork for the 2022 State of Supply Chain Sustainability report. This annual status report aims to help practitioners and the industry to make more effective and informed sustainability decisions. The questionnaire for next year’s report will open in September. More