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Companies are now aiming to decarbonize their supply chains by tackling scope 3 emissions (indirect emissions along the value chain). Scope 3 emissions are difficult for companies to manage because they reside outside the companies’ direct control, and for this reason, they always require partnerships. However, partnerships are not easy, and it is difficult to determine exactly which partnership will best achieve the desired sustainability objectives. This case study focuses on the sustainability partnership portfolio of ZUCCA, a fictitious company in the food and agriculture sector that is looking to dramatically reduce its scope 3 emissions. ZUCCA’s new chief sustainability officer (CSO) is considering the future of the company’s sustainability partnerships portfolio and evaluating which partnership will best help the company dramatically reduce scope 3 emissions. The CSO considers partnering with three different NGOs: the World Business Council for Sustainable Development (WBCSD); World Wide Fund for Nature (WWF); and the World Economic Forum (WEF).

Better Cotton was founded in 2005 to set standards for cotton production, with a goal of facilitating ethical, environmental and development-friendly agricultural practices. As multiple players come under increasing pressure to address social and environmental issues across their supply chains, Better Cotton aims to engage all actors to work together. The Better Cotton Standard System was developed as a holistic approach to sustainable cotton production that addresses the three pillars of sustainability: environmental, social and economic. The organization works to build capacity by working with local partners to train cotton farmers worldwide in more sustainable farming practices that improve their livelihoods and protect and restore the environment. Its assurance model aims to balance scalability with cost effectiveness. Its Chain of Custody system matches supply and demand by tracing transactions throughout the supply chain. Better Cotton subscribes to a multi-stakeholder governance model, bringing stakeholders together to participate in dialogue, decision making and implementation of responses to joint problems. By seeking input from multiple types of actors involved in a question, the eventual consensual decision gains greater legitimacy, and it can be more effectively implemented than a response by any single actor. Multi-stakeholder governance requires balancing representation with the need for efficiency and effectiveness in developing and implementing strategy. The case allows for a discussion on the extent to which the BetterCotton governance model is aligned with its strategy and mission, and more broadly, how to design governance for multi-stakeholder organizations.

CCI was The Coca-Cola Company’s local partner operating in Turkey and Central Asia. By the mid-2000s, CCI had grown from a single-country bottler to a multinational enterprise. Burak Başarır, CEO since 2014, had been the main driver in the transformation. Early in 2020, Başarır had just completed a successful investor tour when governments worldwide began to announce Covid-related lockdowns. CCI’s investors wanted Başarır to continue delivering increased performance and the international growth strategy, while doing more for environmental, social, and corporate governance (ESG). Başarır wondered whether he should focus on keeping employees safe, ESG or delivering the company’s financial and strategic objectives. He opted to do all three and the case follows him on this journey. Because this is a multifaced case, it can be used to teach strategy, leadership, and/or ESG.

In the wake of the Paris Agreement and commitments by the EU, many nations committed to reducing their carbon emissions to zero by 2050 as a response to climate change. In this environment, pressure on the shipping industry, a significant contributor to greenhouse gases (up to 4%), was mounting. In December 2018, Maersk, the world’s largest container operator with a market share of over 20%, pledged to have net-zero carbon ships by 2030 and net-zero carbon operations by 2050, driving innovation in new fuels and technologies. Furthermore, in February 2021 Maersk led the way by announcing its plan to launch a container ship capable of running on e-methanol or bio-methanol by 2023. Would other industry players follow suit? How would they address the decarbonization agenda for the shipping industry? After general discussion, participants adopt the roles of competitors – described in the five accompanying short cases – to identify which key strategies they should take to decarbonize shipping: 1. Reduce the cost gap between new green fuels and marine fuel oil by involving both governments and associations (carbon tax, carbon credits or subsidies). 2. Decide which fuel(s)/scrubber technology/propulsion method to proceed with for future builds and existing fleets. 3. Determine how to rally the industry around their choices through competitor and value chain alliances.

In the wake of the Paris Agreement and commitments by the EU, many nations committed to reducing their carbon emissions to zero by 2050 as a response to climate change. In this environment, pressure on the shipping industry, a significant contributor to greenhouse gases (up to 4%), was mounting. In December 2018, Maersk, the world’s largest container operator with a market share of over 20%, pledged to have net-zero carbon ships by 2030 and net-zero carbon operations by 2050, driving innovation in new fuels and technologies. Furthermore, in February 2021 Maersk led the way by announcing its plan to launch a container ship capable of running on e-methanol or bio-methanol by 2023. Would other industry players follow suit? How would they address the decarbonization agenda for the shipping industry? After general discussion, participants adopt the roles of competitors – described in the five accompanying short cases – to identify which key strategies they should take to decarbonize shipping: 1. Reduce the cost gap between new green fuels and marine fuel oil by involving both governments and associations (carbon tax, carbon credits or subsidies). 2. Decide which fuel(s)/scrubber technology/propulsion method to proceed with for future builds and existing fleets. 3. Determine how to rally the industry around their choices through competitor and value chain alliances.

In the wake of the Paris Agreement and commitments by the EU, many nations committed to reducing their carbon emissions to zero by 2050 as a response to climate change. In this environment, pressure on the shipping industry, a significant contributor to greenhouse gases (up to 4%), was mounting. In December 2018, Maersk, the world’s largest container operator with a market share of over 20%, pledged to have net-zero carbon ships by 2030 and net-zero carbon operations by 2050, driving innovation in new fuels and technologies. Furthermore, in February 2021 Maersk led the way by announcing its plan to launch a container ship capable of running on e-methanol or bio-methanol by 2023. Would other industry players follow suit? How would they address the decarbonization agenda for the shipping industry? After general discussion, participants adopt the roles of competitors – described in the five accompanying short cases – to identify which key strategies they should take to decarbonize shipping: 1. Reduce the cost gap between new green fuels and marine fuel oil by involving both governments and associations (carbon tax, carbon credits or subsidies). 2. Decide which fuel(s)/scrubber technology/propulsion method to proceed with for future builds and existing fleets. 3. Determine how to rally the industry around their choices through competitor and value chain alliances.

In the wake of the Paris Agreement and commitments by the EU, many nations committed to reducing their carbon emissions to zero by 2050 as a response to climate change. In this environment, pressure on the shipping industry, a significant contributor to greenhouse gases (up to 4%), was mounting. In December 2018, Maersk, the world’s largest container operator with a market share of over 20%, pledged to have net-zero carbon ships by 2030 and net-zero carbon operations by 2050, driving innovation in new fuels and technologies. Furthermore, in February 2021 Maersk led the way by announcing its plan to launch a container ship capable of running on e-methanol or bio-methanol by 2023. Would other industry players follow suit? How would they address the decarbonization agenda for the shipping industry? After general discussion, participants adopt the roles of competitors – described in the five accompanying short cases – to identify which key strategies they should take to decarbonize shipping: 1. Reduce the cost gap between new green fuels and marine fuel oil by involving both governments and associations (carbon tax, carbon credits or subsidies). 2. Decide which fuel(s)/scrubber technology/propulsion method to proceed with for future builds and existing fleets. 3. Determine how to rally the industry around their choices through competitor and value chain alliances.

In the wake of the Paris Agreement and commitments by the EU, many nations committed to reducing their carbon emissions to zero by 2050 as a response to climate change. In this environment, pressure on the shipping industry, a significant contributor to greenhouse gases (up to 4%), was mounting. In December 2018, Maersk, the world’s largest container operator with a market share of over 20%, pledged to have net-zero carbon ships by 2030 and net-zero carbon operations by 2050, driving innovation in new fuels and technologies. Furthermore, in February 2021 Maersk led the way by announcing its plan to launch a container ship capable of running on e-methanol or bio-methanol by 2023. Would other industry players follow suit? How would they address the decarbonization agenda for the shipping industry? After general discussion, participants adopt the roles of competitors – described in the five accompanying short cases – to identify which key strategies they should take to decarbonize shipping: 1. Reduce the cost gap between new green fuels and marine fuel oil by involving both governments and associations (carbon tax, carbon credits or subsidies). 2. Decide which fuel(s)/scrubber technology/propulsion method to proceed with for future builds and existing fleets. 3. Determine how to rally the industry around their choices through competitor and value chain alliances.

In the wake of the Paris Agreement and commitments by the EU, many nations committed to reducing their carbon emissions to zero by 2050 as a response to climate change. In this environment, pressure on the shipping industry, a significant contributor to greenhouse gases (up to 4%), was mounting. In December 2018, Maersk, the world’s largest container operator with a market share of over 20%, pledged to have net-zero carbon ships by 2030 and net-zero carbon operations by 2050, driving innovation in new fuels and technologies. Furthermore, in February 2021 Maersk led the way by announcing its plan to launch a container ship capable of running on e-methanol or bio-methanol by 2023. Would other industry players follow suit? How would they address the decarbonization agenda for the shipping industry? After general discussion, participants adopt the roles of competitors – described in the five accompanying short cases – to identify which key strategies they should take to decarbonize shipping: 1. Reduce the cost gap between new green fuels and marine fuel oil by involving both governments and associations (carbon tax, carbon credits or subsidies). 2. Decide which fuel(s)/scrubber technology/propulsion method to proceed with for future builds and existing fleets. 3. Determine how to rally the industry around their choices through competitor and value chain alliances.

The last case in the three-part series looks at ICRC’s journey and learnings in putting together the HIB bond. Additionally, it explores how the ICRC built on this first experience to build up its organizational readiness and launch more new financing models.

The ICRC’s Humanitarian Impact bond is based on the social impact bond model, which brings together outcome funders (donors such as governments, foundations and corporations), service providers (NGOs, social enterprises, etc.) and social investors to pay for the delivery of social outcomes through “pay-for-success” agreements. Case B explores the mechanics of the social impact bond model, how it is applied in the HIB case, and the purpose and role of the term sheet in aligning the needs of the different stakeholders and driving a transaction forward.