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Medium Emissions Reduction Operations Environmental Sustainability

COWBON EMISSIONS

#Agriculture #Energy
ProHub Comment

This case tests candidates' ability to structure a complex environmental challenge with multiple levers across the value chain. The case guides candidates toward the critical insight that cow emissions represent 63% of total GHG, making breeding replacement the primary opportunity. It combines market sizing (estimating herd size), financial optimization (allocation of fixed budget), and strategic prioritization skills.

Estimated Time 26 minutes
Difficulty Medium
Source IESE
20 / 100
Our client is a major milk producer in New Cowland, Milking it Co., MIC. New Cowland has recently introduced a law that means MIC has to reduce its GHG emissions by 45% of 2019 levels within the next five years or face being shut down or heavily fined. They currently produce 20% of New Cowland’s GHG emissions. The CSO has hired us to figure out a way to reach this target.

Clarifying Information

  1. MIC produces approximately 100% of New Cowland’s milk supply
  2. Does not have plans for expansion but reducing volumes is not an option
  3. Their only product is milk and have no plan to diversify
  4. Budget for this project is $750m/year for the next five years (for perspective, current revenues are $15 billion)
  5. MIC owns the entire production chain – from farms, production and transport, they sell to a variety of clients
  6. 5% of their market is local, the rest is foreign
  7. Only need to reduce GHG directly produced by MIC
Mock Interview
Interviewer

Our client is a major milk producer in New Cowland, Milking it Co., MIC. New Cowland has recently introduced a law that means MIC has to reduce its GHG emissions by 45% of 2019 levels within the next five years or face being shut down or heavily fined. They currently produce 20% of New Cowland's GHG emissions. The CSO has hired us to figure out a way to reach this target.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
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MIC, a dominant milk producer, must reduce GHG emissions by 45% within 5 years or face shutdown. With a $750m/year budget, candidates must identify the most cost-effective emission reduction levers across farming, processing, and transportation operations. The core challenge is optimal resource allocation across multiple initiatives to achieve the regulatory target.

Key Insights:

  1. Emissions analysis reveals farming (particularly cows at 63% of total emissions) is the primary driver—80/20 principle suggests focusing here first
  2. Herd replacement with lower-emission breed offers significant impact (21% reduction) but represents largest capital commitment ($2.5B over 5 years)
  3. Portfolio approach required: combining herd replacement (21%), renewable energy in processing (70% reduction potential), and fleet electrification (100% reduction potential) achieves ~90% of target
  4. Budget constraint ($750m/year or $3.75B total) requires prioritization—candidates must justify which initiatives to pursue and sequence
  5. Implementation risks include farmer adoption, supply chain disruption, technology viability, and regulatory/political risk that should be addressed