P
ProHub
English 简体中文 繁體中文
McKinsey Medium Environmental Strategy Capital Investment Emissions Reduction

PubU

#Energy #Higher Education #Sustainability
ProHub Comment

This case tests the candidate's ability to structure a complex environmental sustainability problem while performing quantitative analysis on capital investment decisions. The case cleverly reveals that the 'green' solution (electric buses) has negative 5-year ROI despite environmental benefits, forcing candidates to think beyond simple cost-benefit analysis and consider strategic, reputational, and long-term factors.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
You are the Dean of a large public university in the Midwest. Your tenure has focused on raising the profile of the university through various initiatives. Recently, the Board of Regents has requested a plan that outlines the university’s environmental footprint and a goal to reach net-zero waste by 2040. As a former business executive, you are familiar with the principles of ESG, but need to understand what the major drivers of environmental impact at PubU.

Clarifying Information

  1. How big is PubU? PubU is a large research institution consisting of an undergrad (35k students), graduate school (10k) and various professional schools (~2k). Number in student body is expected to be stable. The university is very large and requires an extensive diesel-powered bus system for students to commute all over campus.
  2. How much money does PubU have available / where does it come from? The average operating budget of PubU is $2B. Of that $2B, roughly 30% comes from the state, 10% from alumni donations, 20% from the university endowment (fund that pays out money each year) and 40% from student fees.
  3. How does PubU currently get electricity? From the local grid (which uses a mix of coal, gas, wind, and solar). The local utility is transitioning to 100% carbon-free by 2030.
  4. What does net-zero waste mean? Net Zero means consuming only as much energy as produced, achieving a sustainable balance between water availability and demand, and eliminating solid waste sent to landfills.
  5. What is PubU’s goal? As noted in the prompt, a plan to reach net-zero by 2040.