The ClimateCAP summit of business school leaders, MBA students, and top industry representatives will take place at the University of Virginia Darden School of Business Feb. 21-22. Darden photo
Microsoft’s chief environmental officer says without urgent action, the global economy faces “catastrophe.” PricewaterhouseCooper’s global innovation and sustainability leader calls it “the challenge of our generation (over) the next 10 years.” Business schools agree: Climate change is an urgent crisis with major implications for business and investment, requiring immediate and comprehensive action. But what form will that action take?
This month MBA students, business leaders, and experts from around the world will gather on the campus of the University of Virginia’s Darden School of Business to assess the economic and financial implications of climate change. The ClimateCAP summit February 21-22 is about understanding “the 21st century’s biggest business issue” whose impacts by 2030 are forecast to reach $700 billion annually, with trillions in coastal, urban, and agricultural assets at risk.
But while climate change is a huge threat, it also represents a multi-trillion-dollar opportunity for forward-thinking business leaders, says Lucas Joppa of Microsoft, speaking recently on PwC’s’ “Davos Talks” podcast. Massive new markets for technology and infrastructure solutions are expanding throughout the world, Joppa says, and “what businesses need to understand is that a failure to act on climate is going to be catastrophic for the economy — and proactive action on climate is going to be positive for the economy and it’s going to be positive for individual businesses.” PwC’s Celine Herweijer agrees, calling climate change “the challenge of our generation (over) the next ten years” — one that “we have to tackle to be here in the future; to be fit for the future; to have a future.”
‘THE NEXT GENERATION THINKS ABOUT THIS DIFFERENTLY’
Scott Price. Courtesy photo
More than 40% of Fortune 500 companies have set goals for carbon reduction. One of them is Microsoft, which has pledged to be carbon negative by 2030. Another is United Parcel Service, the package delivery and supply chain management company which last May announced a plan to reduce greenhouse gas emissions by 12% across global ground operations by 2025, with a particular focus on renewable energy. Scott Price, chief strategy and transformation officer, says within five years UPS wants to get 25% of its electricity from renewables and 40% of ground fuel from low-carbon or alt-fuels. By the end of this year, he says, the multinational juggernaut wants 25% of its annual vehicle purchases to be alt-fuel and advanced-tech.
“This is becoming an imperative, and it’s no longer just large-scale organizations that are being requested to take accountability,” says Price, a Class of 1990 Darden MBA who will deliver a “Fireside Chat” at his alma mater on the first day of the ClimateCAP conference. “I think that the next generation thinks about this differently. You see more and more the ranking of companies in terms of their sustainability-mindedness. So for an MBA today, the idea that there’s a function or a department in the company that will take care of this is wrong. I think companies need to actively lobby the appropriate government agencies to create the tax or the credit environment that helps stakeholders rationalize. Because everyone wants the outcome. No one wants to pay for it.
“This has been a traditional issue. To me, the question is, where in a public-private partnership governments motivate the right behavior. In the U.S., they have for many years, in terms of some aspects of it, but I think we need to double down.”
Price is part of an impressive lineup of corporate speakers at ClimateCAP, including Mark Kaye, Moody’s chief financial officer; Matt Arnold, head of ESG and corporate responsibility engagement for JPMorgan Chase; Ed Freeman, Darden professor of business administration and co-academic director of the Institute for Business in Society; and Virginia Covo, global director of supply chain sustainability for AB InBev.
‘THERE IS MONEY TO BE MADE & LOST’
Dan Vermeer. Courtesy photo
“For way too long,” climate activist Greta Thunberg says, “the politicians and people in power have got away with not doing anything at all to fight the climate crisis.” But inertia is giving way to frank discussion and action, and business schools are in the thick of it.
ClimateCAP was founded in 2018 by Daniel Vermeer, associate professor of the practice at Duke University’s Fuqua School of Business and executive director of the school’s Center for Energy, Development, and the Global Environment (EDGE), and Katie Kross, managing director of EDGE. The summit was created to give MBA students an opportunity to get up to speed on the business risks of climate change, Kross tells Poets&Quants, as well as the opportunities to innovate and gain competitive business advantage by responding to climate change. The fact is, even amid the threat of climate change, consumers still love to shop and businesses still need to make money. “It’s not a summit about politics or about policy solutions,” Kross says. “Simply put, there is money to be made and lost. Today’s business school students need to understand the impacts of climate change — for supply chains, for operations, for corporate reputations, for investment valuations — if they are going to be prepared to lead in almost any industry in the coming decades of their business careers.”
Climate change, Vermeer says, is already having massive consequences for the global economy. He points to the recent Australian bush fires, the California drought and fires of 2019, a heat wave in Japan that killed 160 people last summer, as well as flooding from Hurricane Harvey that shut down the city of Houston, Texas in 2017. “The costs of these disasters are mounting,” says Vermeer, who teaches about the business implications of climate change in his MBA class Business Strategies for Sustainability. “The World Economic Forum’s 2019 Global Risks Report puts ‘failure of climate change mitigation and adaptation’ and ‘extreme weather events’ among the top three risks for the global economy right now.
“Business leaders are beginning to understand and manage for these risks, but business schools are behind the curve in teaching climate change as a business issue. I think that any MBA graduating into this world is going to need to be savvy about the business implications of climate change.”
Four companies — Carrier, Dominion Energy, Corning, and Apex Clean Energy — and 18 B-schools are sponsors of ClimateCAP, including Harvard, Stanford, MIT, Wharton, London Business School, and Northwestern Kellogg. That’s up from 16 schools at the first summit at Duke’s Fuqua School in 2018. That conference drew 150 MBA students; this year the organizers are expecting closer to 300. About two dozen MBA students from participating schools have helped with the programming and are planning social gatherings for students during the conference.
More schools, meanwhile, are incorporating climate change into their MBA classes and holding conferences of their own. Change is happening.
“Since the first ClimateCAP summit, we’ve been really pleased to see increased interest by business school students and faculty on the topic of business and climate change,” says Kross, the lead author of EDGE’s briefing paper, Climate Change & Business: What Every MBA Needs to Know. “Last year, Stanford Graduate School of Business hosted its own Climate, Business & Innovation Summit. Harvard Business School also showcased an exhibit on business and climate change in 2019. We’re beginning to see more classes related to climate change added to business school curricula. I think the time is right for business schools to focus on the role business and investors can play in responding to climate change.”
PASSION FOR ACTION ON CLIMATE CHANGE
Katie Kross. Courtesy photo
The itinerary for the 2020 ClimateCAP summit includes talks and panels with experts and academics on such topics as “Pivoting in a Disruptive Business Environment,” “Innovation’s Role in Sustainable Growth,” and “Navigating Public Policy and Corporate Influence.” On the second day, there will be problem-solving industry breakout sessions on transportation, energy, agriculture, and more. Among many other highlights, Bill Weihl, former director of sustainability at Facebook, will do a brief talk on why students might be interested in taking a “Climate Positive Career Pledge” and how to use the leverage of their careers — both in terms of employer selection and internal advocacy/projects — to achieve progress on climate change mitigation.
Scott Price, whose fireside chat is scheduled for early on the first day, says he has been aware of the impacts of climate change since well before joining UPS in late 2017, and even before his previous job with Walmart, where he was responsible for global sourcing, international technology, and international logistics programs. Having lived in six countries and worked and been responsible for 77, he has seen the impacts of changing climate on developing countries and global leaders alike, as well as widely disparate approaches for contending with the issue. And, regrettably, he has also noticed a flagging commitment in some of the more developed economies.
“An interesting spectacle is that the lowest common activity in many, many developing markets is recycling out of economic need, where you see communities ensuring that nothing gets wasted,” Price tells P&Q. “You then get to wealthy countries, which in many cases talk a great story about recycling and sustainability, but where the actual behavior of residents doesn’t match the rhetoric: they’re finding out that because there’s no economic value to recycling for the trash collector, they’re just mixing it and it goes to the same place.
“And so I just find a lack of commitment in many of the developed economies. And I don’t call just out the U.S. I saw it in other markets as well. Look, with this rush to the middle class by a couple of billion humans who have not achieved that same economic comfort, we will consume the resources of this planet at a pace never seen before. And we better wake up to the fact that that is not a good thing.”
Price was in Davos, Switzerland for the World Economic Forum in January at the same time as teen activist Greta Thunberg, and though he didn’t see her speak, he has been impressed by her passion. That passion is contagious, he says — and crucial.
“The reaction she has gotten is amazing,” Price says. “I was in Davos when she was there. My wife went saw her speak. She said it was like the girl was a rock star. I just think that passion will continue to build, and I think that to get consumers to do the right thing means that companies have to step up, no matter what they do, and take a higher-level position.”
The ClimateCAP registration deadline is Friday, February 15. Cost is $125. Late registration is $150. Darden students may register for $45. Visit here for more information.
See the next page for commentary on the upcoming summit by MBA student fellows who plan to attend.
UVA Darden hosts this year’s ClimateCAP conference February 21-22. Darden photo
Elizabeth John, First-Year MBA Student, NYU Stern School of Business
Liz John. Courtesy photo
I’m really excited. The agenda looks great — it’s pretty packed and there’s a lot of amazing speakers coming. I think the reach of this conference really is what appealed to me, because you have a ton of different business schools participating and a lot of different companies, and a lot of the speakers are C-level employees, so you can tell that the companies are really invested in making this conference successful and also making a good impression. So it seems to me that this issue has become front and center for many, many companies. And I’m heartened to see how that’s kind of come through in the planning of the conference.
I think sustainability is something I’m definitely interested in going much deeper into, so this conference is an opportunity to just learn so much more about this space. I just think there’s a ton of opportunity in this space and I think it’s still becoming defined. Being a part of defining it could be a really exciting.
Anecdotally, I’ve sensed a lot of interest even from folks who are not necessarily recruiting for sustainability or environmentally focused positions. I think people realize this is something that touches every part of business. So I would say there is a wide interest and whenever I talk about what I’m looking into, other people seem very interested. I don’t know how that compares to maybe several years ago. I know the (Stern) Center for Sustainable Business is becoming even more present and important and getting a lot of features. So I imagine that’s becoming more and more of a driver for students at other schools too.
Daniel Aycock, Second-Year MBA Student, UVA Darden School of Business
Daniel Aycock. Courtesy photo
I first heard about ClimateCAP through my role leading Darden’s Energy Club. More and more MBA students — myself included — are increasingly interested in learning about and engaging in the transformation happening in the energy industry. The conference is a great opportunity for students interested in energy — both at Darden and our peer schools — to hear from and interact with leaders of organizations who are either driving or grappling with that transformation on the front lines. And as someone interested in the challenge of climate change broadly, I’m looking forward to hearing not just from the energy industry, but from a host of other industries increasingly coming to terms with the risks and opportunities of climate change. It’s time to move from marketing and PR to real solutions and innovation, and I’m excited to have that conversation.
As a ClimateCAP Fellow, my primary responsibilities are marketing the conference, generating content and questions for industry breakout panels, and hosting our guests to help them feel welcome at Darden and in Charlottesville — both MBA students from our peer schools and our impressive slate of speakers.
I’m very encouraged by the number and caliber of business schools supporting ClimateCAP. It reflects a broader trend toward more robust curricular offerings, new research initiatives, and increasing career opportunities for MBA students. I believe climate change will be one of the defining challenges of my lifetime, and solving it will require hard work, perseverance, and a will to lead and act boldly from my generation. We need great scientists, engineers, and politicians to succeed, but we also need great leaders of businesses driving innovation, commercialization, and scale in the marketplace. Graduate business education and the business community at large need to take their seats at the table of these conversations, and ClimateCAP is a terrific place to start.
Alexandra Cahill, Second-Year MBA Student, UVA Darden School of Business
Alexandra Cahill. Courtesy photo
I wanted to participate in the planning and execution of the conference because of my professional experience and interest in the topic, as well as my role as President of the Darden Business & Public Policy Club. The mission of BPP is to engage students in action-oriented discourse about the implications of business and policy decisions. The ClimateCAP conference aligns well with this objective and is a great opportunity for all MBA students, including those for whom climate may not be top of mind, to engage in conversations about the impact of climate change on business decisions across sectors and industries.
Prior to Darden, I spent two years as the chief of staff to the Massachusetts secretary of energy and environmental affairs. My experience working with different stakeholders, including the business community, to advance renewable energy legislation and climate mitigation programs in Massachusetts underscored the importance of collaboration between the public and private sectors to address climate change. Understanding the cross-sector implications of climate change is an increasingly important issue for business leaders. ClimateCAP is a timely opportunity to elevate this important issue across MBA programs.
I think this conference demonstrates how climate will be an important consideration for future and emerging business leaders, regardless of sector or industry. The breadth of industries represented in the conference (finance, agriculture, transportation, CPG, energy) is an example of how climate is not a standalone issue, and that MBAs will need to be equipped with the tools to address and adapt to cross-sector challenges. I think that Darden does an excellent job of preparing students to address complex challenges such as climate change, beginning with stakeholder theory and business ethics in the first-year core curriculum. This conference brings real world perspectives and experience on these issues, while also providing students with an opportunity to build connections and resources for their future careers.
Wendy Kadon, Second-Year MBA Student, Northwestern Kellogg School of Management
Wendy Kadon. Courtesy photo
I found out about ClimateCAP through the Energy & Sustainability Club at Kellogg; a classmate posted about it. I like that the conference brings together leaders from across industries to share experiences, best practices, and new ideas on this subject. Climate change represents both the greatest opportunity and the greatest risk for businesses in our lifetime. As a complex subject, it’s necessary to hear these diverse perspectives.
This is a subject that I have been interested for a while. Before Kellogg, I was a buyer in the apparel retail industry, and got to see first hand the environmental footprint that clothing production has, like the amount of water required, the chemicals used to dye fabric, and the waste from scrap materials and discarded clothing. I’m not naïve, however — consumers still love to shop (including me) and businesses still need to make money. Environmental sustainability has, for so long, been wrongly seen as a tradeoff with profits, but technology has amplified our ability to make it make business sense, too. In addition, consumers today expect business to both do well and do good, and are using their spending power to vote for brands that represent their values. Businesses can’t ignore this shift if they want to stay relevant; what may be a nice-to-have now will be table stakes in the future.
I am working to be a change leader in a consumer product category one day, helping large companies pivot their strategies and transform their supply chains to compete in this new environment. During my time here at school, I have been working with a classmate (now alum) Dave Costello on his startup, Scoots, the world’s first plant-based footwear brand. We ran a successful Kickstarter this past June that raised $40K+ and delivered our first product this fall, and he is currently raising money to move the company to the next phase. This past summer, I interned at AB InBev in their procurement department, which owns many of the company’s ambitious sustainability goals; one of my two projects was directly focused on the company’s North America plastics footprint. After Kellogg, I will be joining BCG to deepen strategic thinking and organizational change management skills that will make me a more effective change leader in the long run.
I see the goals of the conference as bringing this topic to greater prominence among the business community by illustrating both the opportunity and the risk presented by climate change; sharing learnings and ideas across companies and industries, because this issue is systemic and cannot be addressed in isolation; and networking. I think it’s great and important that schools are taking an interest. Businesses have the ability to accelerate change through innovation, collaboration with the public and nonprofit sector, and more. The biggest companies often have wider reach and impact than individual nations alone, because they operate across the world.
Business schools are driven by the interests of their students and by the needs of employers. As millennials and Gen Z come through the education system, their demands as consumers will also translate into their professional goals, or at the very least a need to understand how to operate within these factors. As businesses try to address these consumer demands, they will want graduates who are equipped with the knowledge and tools to not just navigate but excel in this environment. I believe that more schools will incorporate sustainability into their curricula in one way or another as it evolves from being a non-market consideration to a market factor.
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