Academia and Private Sector Team Up for Sustainability

In September 2013, Mexico experienced the direct effects of global warming when tropical storms Manuel and Ingrid made landfall simultaneously on respectively the Pacific and the Gulf of Mexico, affecting 22 states. According to the Mexican Association of Insurance Institutions (AMIS), the monetary cost of this natural disaster amounted to MX$75 billion (US$5.6 billion), making it the most expensive weather phenomenon in Mexican history. One of the most important issues that arose from this natural disaster was the incapability of the government to face climate change challenges on its own. As part of its 2015 vision, the Monterrey Institute of Technology and Higher Education (ITESM) – one of the most important networks of private universities in Mexico – in an alliance with Arizona State University, created the Global Institute for Sustainability (IGS) in 2011. Its director and founder, Dr. Isabel Studer, explains IGS’ main objective is to work with the private sector to see sustainability included in the business models of Mexican companies.

Another important project is the Agreement for a Sustainable Mexico which has been signed by 50 companies – such as Nissan, P&G, Banamex and GE. Studer stresses this agreement includes specific commitments in terms of energy efficiency, water conservation and consumption, renewable energy implementation, and waste management. “It seeks to boost a public policy agenda from the academic and private sectors that inevitably will have an impact in the states and federal governments.” However, it is not only private companies that have signed the agreement, since other universities outside the ITESM network, as well as SEMARNAT, are participating. Studer says the agreement has enabled the institute to articulate a relationship with companies, but most importantly, transform commitments into actions, while creating a collaboration network to supply needed human talent and developing knowledge about green projects.

There are about 4 million companies in the country, but only 1% of them are responsible for 60% of the manufacturing GDP. “It is also a fact that 99% of industrial facilities in Mexico are small and medium-sized companies,” Studer says. In order to reach these companies, IGS is working with small and medium-sized companies that are providers for AAA companies in sustainability training courses. She emphasizes the importance of working across the complete value chain to truly establish sustainable practices in the manufacturing sector.

In this project, the institute is currently working with 3,000 small and mid-sized companies that are FEMSA and Walmart providers. “Working with FEMSA and Walmart has enabled us to approach these companies and collaborate with them; this partnership has been a gateway for us,” Studer says. She explains that working with these companies would otherwise have been very difficult, but that it has not been challenge free. “There are great training differences between the owners and workers of the different companies. It is difficult to gain their interest to create a sustainable training process, especially in relation to an issue which might not be essential for their competitiveness,” Studer says. “For FEMSA and Walmart, it is obvious that if they want to make a significant contribution to the Mexican economy, they need to work with small companies, because they represent the majority of Mexican companies.” Another issue is the green economy, a broad new concept that is essential to foster public policies and business strategies that include sustainability. Studer quotes the many studies and reports published by KPMG, PwC, and McKinsey about the cost of natural capital degradation, which stands at about 10-11% of the global GDP. “The numbers and expenses have sounded the alarms of many companies, who are realizing that the lack of government actions will have a direct impact on their finances. For example, Federal Express is calculating the impact of flooding due to climate change on the logistics business in many countries,” she says. In Studer’s perspective, there are many tangible problems that are the result of climate change and natural capital degradation. Thus, it is the perfect time for IGS to seek to make significant contributions to addressing these problems. This is where the institute’s partnership with the State University of Arizona plays a significant role since it has about 300 researchers working on sustainability issues.

Even though it has a great collaborative relationship with SEMARNAT, the institute is not interested in working directly with politicians because, as its founder stresses, it is very complicated to directly influence public policy. “Our strategy is to work hand in hand with private companies to influence public policies through coordinated and collective efforts that will gain traction. I believe this is more effective,” Studer adds. It is from the private sector’s trench that the institute will continue working to foster the adoption of sustainability practices in Mexico as one of the main axes to boost economic competitiveness and protect the country from the effects of climate change.