Measuring the Value of Environmental Activists

Last Updated Sep 12, 2008 2:25 PM EDT

One of the vital skills business schools teach is how to measure value. The exercise is usually easier when the company being evaluated is a for-profit business. Analyzing value in a not-for-profit organization is much murkier.

At Harvard Business School, students work through a case study to attempt to determine the value of Greenpeace and the World Wide Fund for Nature. In an interview with HBS Working Knowledge, professor Ramon Casadesus-Masanell discusses the many steps students take to reach a conclusion. It helps to start with this question: Is the organization achieving its goals? Says the professor:

"Greenpeace's goal is 'to ensure the ability of the Earth to nurture life in all its diversity' and WWF's is 'to stop the degradation of the planet's natural environment and to build a future in which humans live in harmony with nature.' The challenge for a business student is how to put a quantifiable measure on whether these organizations are successful in reaching their goals. Clearly, financial statements do not suffice."
In their study of this case, students learn about the earth's 2,000-year-old 'vicious cycle', concepts such as willingness-to-pay, and even employ the 'prisoner's dilemma' problem to understand the choice governments make between lax and stringent environmental policies.

So, can you measure the value of environmental activists? Yes. But you'll have to read the article to find out how.

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.