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Research FOCUS ON FACULTY Advancing Sustainable Scholarship Darden professor Michael Lenox has long focused his research on business, public policy, and sustainability. Now, he wants to expand the community of like-minded scholars. Michael Lenox has never seen so much interest in the interplay between busi- ness and the environment. But while more companies are putting socially and environmentally responsible poli- cies in place, academic research still lags behind, he says. As a result, busi- nesses still lack clear guidelines about what works and what doesn't when it comes to sustainability. The Samuel L. Slover Profes- sor of Business at the University of Virginia's Darden School of Busi- ness in Charlottesville, as well as the executive director of the Bat- ten Institute for Entrepreneurship and Innovation, Lenox hopes his research will help establish clearer guidelines for companies to follow. "There's a need to understand pub- lic policy," he argues. "What is the role of public policy? When does it encourage corporations to embrace sustainability, and when does it impede their efforts? How far can firms be expected to take respon- sible practices on their own? These are questions that researchers have yet to really explore." Lenox's recent work focuses on industry self-regulation and its impact on the environment. Lenox notes that self-regulation often fails, as it did so spectacularly in the banking industry, because industries have little incentive to establish rigorous stan- dards or monitoring systems. They fail to institute effective reporting protocols or mete out effective pun- ishments to companies that fall short. 52 BizEd JULY/AUGUST 2009 activism. In "Private Environmen- tal Activism and the Selection and Response of Firm Targets," Lenox explores how activists choose compa- nies to target for boycotts and public attacks, what kinds of strategies they employ, and how aggressive they become. If companies better under- stand activists' tactics, they may have greater incentive to improve their the term "organic" on their labels. While Lenox is pleased that more academics share his interest in explor- ing issues such as these, he notes that most schools still have only one or two professors specializing in sustain- ability. That won't be enough to satisfy business's growing demand for research on sustainable business prac- tices, he argues. So, what does motivate industries to self-regulate successfully? In most cases, says Lenox, incentives ironically come from outside the industry itself. Published in the Journal of Eco- nomics Management and Strategy, Lenox's most recent research exam- ines one such external incentive: systems of self-regulation—if only to avoid being the next target. Other external incentives also can drive better self-regulation, says Lenox. For instance, he says, before the Food and Drug Administration developed standards for organics, it was difficult to determine whether a product's claim to be organic had any meaning. After clear standards were in place, consumer demand for these products increased. That trend gave firms added incentive to follow the FDA's rules so they could legally use TOM COGILL