A VISIT TO THE NATIONAL ASSEMBLY
The back wall of Ecuador’s legislative branch, the National Assembly (Asamblea Nacional), is adorned with 23 larger-than-life paintings by Ecuador’s most important artist, Oswaldo Guayasamín (1919-1999). Together, they create a striking mural of the country’s triumphs over and struggles with authoritarianism, colonialism, indigenous rights and more. The Congress of Ecuador commissioned the mural in 1988, raising the ire of the United States: One figure depicts a man in a Nazi helmet with the letters “CIA.”
The assembly’s 137 lawmakers face the mural as they debate the policies that will shape Ecuador’s future.
Of course, politics is politics no matter the country. The day the Kellogg MBAs visited the chamber and sat in the lawmakers chairs, a bit of a kerfuffle was brewing behind the scenes. The assembly’s president (think our Speaker of the House), Virgilio Saquicela, popped in for a short appearance, bringing a full film and photo crew along with him. He offered words of welcome and friendship typical of a public relations appearance. He then tweeted about the visit, and the dozens of replies were not, let’s say, flattering.
La Asamblea #DelDiálogoAlosHechos se vistió con el color de la juventud universitaria de los Estados Unidos.
Recibimos a los alumnos de Kellogg School of Management at Northwestern University in Evanston, Illinois.
Conocieron la legislatura y su trabajo en beneficio del 🇪🇨. pic.twitter.com/iveT9bTHuw
— Virgilio Saquicela E (@VSaquicelaE) March 16, 2023
“They send word to the students to please return the wallets stolen in the assembly and please do not forget to give them credit for the tithe they were charged,” reads one translated message.
“They smiled at you while in their minds they told themselves that never in their lives would they come to invest in Ecuador,” reads another.
One reply was a gif of an old man shouting a single word: “Ratero!” Translation: Pickpocket!
(The day after the Kellogg visit, 59 opposition lawmakers formally requested to hold impeachment hearings against Ecuadorian President Guillermo Lasso on corruption allegations.)
Why would a class of business students studying impact and sustainability want to visit a house of a foreign government? It’s all about context.
“It’s very impactful to be able to sit in an area where laws are made in a country with such respect for the past, and to hear about what is important to the people of Ecuador. So much of what we do in the corporate sector is influenced by legislation and laws, rules and regulations. While many companies have made decisions to address things like climate change regardless of government, the government does make a big impact in these types of decisions,” says Adam Cunningham, a senior operations manager at Amazon and a second-year EMBA student at Kellogg.
Part of his EMBA discovery is exploring the sustainability space and how he might apply it to his career. It’s one of the reasons he chose this particular GIM course. In fact, shortly after returning home, he was appointed Amazon’s sustainability champion for its Midwest region of fulfillment centers.
“We have a global community at Kellogg, and I came from the Caribbean where we care a lot about the environment and sustainability. We also have smaller populations that are bearing the brunt of climate change, yet contribute to it the least. So, this is definitely an interest of mine for future things I want to do in the business community.”
TALE OF TWO CHOCOLATE MAKERS
Besides Paccari, the Kellogg MBAs visited another chocolate maker in Ecuador. It couldn’t have struck a starker contrast.
While Paccari is a relatively small family company carving out a niche in the gourmet market, Nestle Ecuador is a subsidiary of the largest food and beverage company in the world.
Paccari, from the very beginning, was founded on a mission to protect the environment while lifting up Ecuadorian farmers and their families. The backs of its biodegradable wrappers are emblazoned with the company’s impact certifications: Vegan, organic, fair trade, B-corporation, and others. It is the only chocolate company that has the Demeter Biodynamic Certification which certifies that it upholds an auto-regenerative ecosystem free from chemicals, pesticides, and fertilizers.
While Nestle is putting talent and resources behind real sustainability goals, it is trying to incorporate them into manufacturing, supply chain, and distribution processes that have been entrenched for decades.
Nestle Ecuador produces 95% of what it sells locally, and 90% of its ingredients and packaging materials come from Ecuador. About 20 years ago, Nestle was an early leader in creating shared value – the theory created by Harvard’s Michael Porter and Marc Kramer that says that doing good is good for business. Nestle cultivated local coffee growers for its Nespresso brand by paying them more, providing both training and bank loans to help their farms, and establishing quality control centers close to the crops. Nestle’s actions benefited the farmers, while the farmers produced better crops with higher yields and quality.
Today, among other efforts, Nestle is trying to create a recycling market for the thin clear plastic that wraps around products like cookies and crackers. The material currently can’t be recycled, so it is left in trashes, on streets, and in landfills. They are working with a recycling company to pay waste pickers to collect the plastic in the hopes that if and when a recyclable alternative is created, the market to collect and recycle it will already be established. At the same time, Nestle is trying to create the recyclable version of the packaging.
Just before coming to the Nestle meeting, Maggie Ellison, MBA ‘24, met with a group of local recyclers at ReciVeci. Ellison’s team is studying waste management and how ReciVeci can measure its impact on making recycling more equitable. Such measurements are important when speaking to investors that can help them scale or when talking to officials in efforts to change policy.
While waste pickers are 70% women, and the work is important for supporting many Ecuadorian families, “often they aren’t treated with dignity and they are not given a livable wage,” says Ellison, who aspires to work at a mission-driven startup after her MBA, either in women’s tech or clean energy.
It was insightful to come from that meeting and then walk into the Nestle headquarters to hear about the ways they are thinking about packaging, where trash ends up, and how they are working with recycling associations, she says.
“They have a lot of work to do, but it was nice to see that a big corporation like Nestle is thinking about these issues. Hopefully, it will have a trickle down effect towards these people.”
‘YOU DON’T NEED TO BE A UNICORN TO BE SUCCESSFUL’
Pascal Schillings, a part-time MBA who builds software as a product manager for S&P Global, aspires to someday start his own business. He wants to make a tangible product, not computer code. He was particularly inspired by Paccari’s story: A company with a moral code that was able to scale up from its small beginnings and stick to its principles.
“What he said that resonated a lot is that you don’t need to be a unicorn to be successful. You can actually have a medium-sized business, do very well for yourself, and have all these sustainability goals that don’t fall by the wayside,” Schillings tells P&Q. “(The owner) seems like a genuinely happier person who is genuinely passionate about what he’s doing. That’s something that I think, in American business and plenty of other countries, is lacking a little bit, especially in larger corporations.”
Spencer Bartok, a full-time MBA who previously worked in strategy and operations at DoorDash after a stint at Deloitte Consulting, agrees. He chose this GIM course because it aligned with his interest in social impact in business.
He found it interesting that Paccari didn’t set out to reach as many farmers as possible or expand to a certain number of countries. They just wanted to make chocolate as equitable as possible. They started with a small, simple mission and were able to scale from there.
“It’s like, if you build it, they will come, essentially. He didn’t have massive goals. He just wanted one thing to happen, and that developed the market for itself,” Bartok says.
Both Schillings and Bartok believe that trends in business that some would call a fad – ESG, sustainability, social impact – are losing their power of differentiation. It’s just becoming the way people will do business in the future.
“Eco is certainly one of the best marketing tools one has today. Understanding these different frameworks of measurement and certifications, and what people are actually doing and the impact they’re having, is quite important,” Bartok says.
“I think a big component of this course is trying to parse through the noise to understand what’s real and what’s not.”
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