Performance evaluations for industry

New Web site offers revealing environmental industrial picture

By Colleen Walsh

Harvard News Office

Surfing the Web to look at industrial facilities emitting toxic chemicals is all in a day’s work for two Harvard Business School (HBS) scholars. Now, they hope you’ll do it, too.

On Nov. 28, Mike Toffel, HBS assistant professor of business, along with Andrew King, associate professor at Dartmouth’s Tuck School of Business and current Marvin Bower Fellow at HBS, and Michael Lenox, associate professor of strategy at Duke’s Fuqua School of Business and faculty director and founder of Duke’s new Corporate Sustainability Initiative, unveiled a project that Mother Earth would be proud of.

MapEcos.org is a Web site that offers balanced environmental performance information on more than 20,000 industries across the United States. The goal, its creators say, is to provide easily accessible, fair information to a variety of stakeholders including facility managers, environmental regulators, and the general public. In addition, they plan to use the site to study how companies disclose their environmental information.

“I am of the belief that information transparency and having a vehicle where information is transparent is almost always a social good, and it will improve both firm performance and social welfare,” said King.

On the site, facilities are presented on a map of the United States and color-coded with markers according to their emissions level. Blue corresponds with low and red with high. A green ring around the marker indicates environmental management information has been provided by that facility. Users can click on a series of data for each facility, including graphs and charts that show the hazard levels of the chemical(s) emitted, and how the facility’s emissions compare with others in its industry by state, county, or even nationwide.

Much of the data is available online, from the Environmental Protection Agency’s (EPA) Toxic Release Inventory, which measures the release of 612 different toxic chemicals from various industries and federal facilities across the country. But MapEcos.org is the first Web site to combine the comprehensive EPA information with an interactive, user-friendly Google Maps interface. The program gives visitors a broad, visual reference with the nationwide map that charts the facilities, but it also allows them to zoom in on the chemical plant in their neighborhood, using detailed satellite imagery.

Additionally, the site lets companies on the map list the measures they have taken to improve their environmental performance. The information is compiled through a survey that asks a variety of “good news type questions,” said Toffel.

“Environmental managers at these companies feel they are underrepresented, that what these organizations are doing [for the environment] is actually not getting out into their communities,” said Toffel. The site, he explained, gives companies the chance to tell their side of the story.

The idea took shape almost three years ago on a flight back from Vietnam, where King was working with businesses on the decisions they made with respect to the environment. He realized he’d hit his breaking point when one company’s practices threatened the survival of two endangered species.

“I thought, ‘I have to do something about this, I can’t just be an academic anymore,’” he said. “Getting geographic information to the decision maker has got to be done.”

With money from King’s own pocket, as well as the help of a dedicated group of talented undergraduate programmers at Dartmouth College, King and company began work on the site last summer. Later, King enlisted the support of his longtime colleagues and friends Toffel and Lenox.

But the perpetual struggle for academics who want to make a difference, explained Toffel, is the conflict between advocacy and good-quality research.

You want to elicit change but “proper empirical designs require that you not be a protagonist in the study,” he said.

The three colleagues discussed the idea in February at HBS at the annual Institutional Foundations for Industry Self-Regulation Conference, which they helped found. Together, they devised a solution. The Web site, they said, is a type of “natural experiment” that offers both a social benefit in the ability for users to see who the polluters are and learn more about what is happening in their communities and industries, and an academic opportunity to study the information the companies choose to disclose.

“The ‘end-around’ that the three of us discovered was, ‘Wait, maybe we can make a natural experiment that has the social good piece to it and then study [the results] objectively,’” said King.

The research aspect of the project is a critical component, said Toffel, who hopes they will better understand when and why firms volunteer environmental performance information by studying which firms disclose such data, what they disclose, and if they do so truthfully. The results could help determine things like trends within industries, or even whether the economic, social, or ethnic profile of a community influences such disclosures, he said.

While some might argue that wealthy, more politically connected communities have stronger demands on facilities and would see more transparency from them, the research could prove otherwise, said Toffel.

“It may go the other way, that the pressures of social justice now have created a stronger implied suspicion of facilities in poor and more ethnically diverse communities, and in response to that … those facilities are more likely to disclose information.”

Usage has been rising daily, and the work is generating interest from some important players in the industry.

Recently, King participated in a conference run by the Council on Environmental Cooperation, a group formed after the creation of the North American Free Trade Agreement to address environmental issues affecting the United States, Canada, and Mexico that is looking at ways of distributing similar information. In the coming months, Toffel, King, and others involved in the project also plan to meet with the EPA to discuss MapEcos.org.

Down the road, King said he could envision the site expanding to address broader environmental issues, like runoff from farmland or habitat change, some of the hardest problems to solve.

“I would love it,” he said, “if we could build a site that could be gathering [good and bad] data about those changes.”

colleen_walsh@harvard.edu