SUSTAINABILITY IN THE BUSINESS CURRICULUM AASHE Convention Raleigh, NC November 11, 2008 Jerrell Ross Richer, PhD Associate Professor of Economics Department of Business Goshen College 1

Goshen College’s Core Values Christ-centered Passionate Learners Compassionate Peacemakers Servant Leaders Global Citizens 2

Sustainability and the 3 P’s 1.Planet 2.People 3. Profit 3

Leadership Jim Brenneman President Goshen College 4

Sustainability as “Peacemaking” Goshen College has Mennonite roots One of several historic peace churches 5

Sustainability as Peacemaking 1. Making peace with the planet 6

Sustainability as Peacemaking 2. Making peace with people 7

Sustainability as Peacemaking 3. Making peace with business 8

How can we turn the corner? 9

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BUSINESS DEPARTMENT SENIOR SEMINAR BUS 410 “Management Policy and Social Responsibility” Developed by Delmar Good and first taught at Goshen College in

BUSINESS DEPARTMENT SENIOR SEMINAR BUS 410 “Management Policy and Social Responsibility” Business ethics? Sustainability? 12

Leadership Gordon Moore Vice President McCormick Motors 13

McCormick Motors 1953: Small-town Chevrolet dealer 2007: #1 Chevrolet medium-duty truck dealer in the nation 14

Saving Energy 1.Establish a benchmark 2.Set a goal 3.Identify and rank investments in efficiency –Low cost - High pay off (LCHP) –High cost – High pay off (HCHP) –Low cost – Low pay off (LCLP) –High cost – Low pay off (HCLP) 4.Make investments (Section 179 tax deductibility) 5.Monitor impacts and reassess 15

1. Establish a Benchmark $43,000 annual electricity bill in 1997 (representing 0.25% of sales) 16

2. Set a Goal Reduce electricity consumption as a percent of sales by 50% 17

3. Identify and Rank Investments Climate control of work areas (LCHP) Overhead door seals (LCHP) Timers for outside lighting (LCHP) Timers for shop equipment (LCHP) Ceiling fans for air circulation (LCHP) Waste oil furnaces (HCHP) HE fluorescent lighting (HCHP) Polymer blinds (HCHP) Insulation to walls and roof (HCHP) Replaced door entry points (HCHP) On-demand air compressors (HCHP) Programmable power strips (LCLP) 18

4. Make Investments Waste oil furnaces (HCHP) 19

Fluorescent Lighting (HCHP) 20

Polymer blinds (HCHP) 21

On-demand air compressors (HCHP) 22

5. Monitor Impacts $57,000 electricity bill in 2007 (representing 0.06% of sales – a 75% reduction since 1997) 23

USA Today Recognition McCormick Motors One of four dealerships nationally recognized in 2007 for implementing initiatives to save energy and improve the environment 24

WHAT’S NEXT? Develop an Educational Partnership between McCormick Motors and Goshen College 25

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Objectives of the Senior Seminar Course 1.Understand the Business: Learn about its history, industry, organization, product line, operations, innovations and recent energy saving investments 2.Identify the Opportunities: Consider practical technologies for generating renewable energy 3.Analyze the Options: Develop a benefit-cost framework to choose the appropriate technology 4. Make a Recommendation: Chose the best technology and provide a justification 27

Solar Electricity –Photovoltaic panels convert sunlight directly into electricity 28

Solar Electricity –An inverter transforms direct current into alternating current (AC) –The system is interconnected with the utility grid so no batteries are required 29

30 Luke Gascho, Director

Benefits of Solar Electricity –Clean renewable power –Hedges against future increases in electric rates –Long-term reliability and low maintenance cost –Top-line benefits –Government incentives 31

Costs of Solar Electricity –High initial investment –Electricity output varies with weather –Panel production has environmental costs –Future technology may be superior to current systems 32

Wind Power Wind is a form of solar energy caused by: –Uneven heating of the atmosphere –Irregularities of the earth's surface –Rotation of the earth 33

Wind Power Wind turbines convert this air movement into electricity As with solar, an inverter produces AC and the system is interconnected with the grid 34

Benefits of Wind Power –Clean renewable power –Hedges against future increases in electric rates –Long-term reliability and low maintenance cost –Top-line benefits –Government incentives 35

Costs of Wind Power –High initial investment –Electricity output varies with weather –Turbine production has environmental costs –Future technology may be superior to current systems –Noisy at times –Bird kill is possible 36

Evidence from Merry Lea Wind provides peak generation in the Winter, much lower in the Summer 37

Evidence from Merry Lea Solar provides more power generation throughout the year, especially in the summer 38

Evidence from Merry Lea The technologies are complementary Solar outperformed wind in 2007 (6,212 vs. 4,304 kWh) 39

Adding It All Up Calculator demo… 40

Our Recommendation Apply for an Indiana Alternative Power and Energy grant for a 5kW solar electricity system 41

The Result McCormick Motors was awarded the grant 42

Next Step for our Partnership 43

Fall Semester Research Topics 1. Design economic and environmental metrics to track the actual outcomes of McCormick Motor’s investment in solar electricity 44

45 2. Design a website to highlight best practices in the areas of energy efficiency and renewable power generation for small businesses and nonprofit organizations

46 3. Develop policy recommendations that would enable the U.S. to become energy independent within 10 years

47 Jerrell Ross Richer Associate Professor of Economics Department of Business Goshen College