[Music]
[Applause]
so as you’ve heard I’m a student at
London Business School but maybe not
your typical student
you see before I came to London Business
School I was a bit suspicious of this
thing called business and as a young
climate policymaker in Australia I’d
encountered my fair share of corporate
push back as weas tried to make progress
on climate action and yet over time my
views have evolved and the more I’ve
worked on the climate challenge the more
have become convinced that in addition
to government and civil society business
will be an absolutely critical player
when it comes to addressing the climate
issue and so two years ago
I packed up my comfortable public
servant life and head off for Business
School in London and it’s important to
say here that on the whole my experience
has been fantastic I’ve learned an
incredible amount and met amazing
students staff and teachers along the
way and yet despite these many positive
experiences there’s just one small
question that I can’t shake is Business
School failing my generation as you’re
probably imagining this question relates
to the subject of climate change but
maybe not in the way you’re thinking and
so for the remainder of this talk I want
us to put aside any thoughts of natural
disasters or polar bears and coral reefs
in fact the first thing I want you all
to do is to join me in a little exercise
I want you to close your eyes for a
moment and look inside of yourself and I
want you to find your own personal moral
compass you got it okay great now I want
you to take your hand grab hold of it
and yank it outside of you for some of
that might that might mean using two
hands if you’re particularly stubborn
for others it might come out rather
easily and maybe there’s something to
worry about there
so take it out and put it aside maybe in
your bag or somewhere you know where it
is
in case you want to put it back at the
end of this talk now this is important
because for the rest of my talk I’m
convinced that we don’t have any need
for morality and this is because what I
want to talk about today is not how
business can affect climate change or
the environment what I want to talk
about is how climate change or more
specifically action to address climate
change will affect business and why I
believe that this is something that
every business school student should be
aware of so what do I mean when I say
how climate change or climate action
will affect business as many of you may
know in December 2015
leaders and representatives of 195
governments got together and agreed on a
plan to decarbonize the economy to keep
warming below two degrees now there is
legitimate debate to be had as to
whether we have any chance or any will
to deliver on this Paris agreement but
for today I want you to all join me in
imagining that we will and if we do what
does this mean for business well at the
heart of the Paris agreement is what we
call our carbon budget in order to have
an 80% chance of meeting our two degree
dahl goal the world can emit a
cumulative total of 1845 Giga tons of
carbon dioxide equivalent so how we’re
going with that well in the hundred and
fifty years between 1850 and 1999 we
emitted 1010 Giga tons of co2 equivalent
then in the 15 years between 2000 and
2015 we emitted another 500 gigatons
unfortunately I’ve been to business
school and I’ve learned a few things
about addition and subtraction and what
I’ve and you’ll notice is that counting
all the emissions we’ve made so far what
we have left is just 335 Giga tons of
co2 to emit in the next 33 years if
we’re to hit our goals I raise all this
because what it means is that if we’re
going to achieve our goal things are
going to have to change they’re going to
have to change an awful lot and they’re
going to have to change quickly because
at the rate we’re on in just 10 years
we’re set to explode and blow up this
target in fact if we look out to the
roadmap to 2050 depending on our goals
and our appetite for risk we’re looking
at the need to reduce emissions by as
much as 95% against 2010 standards so
what does this mean for business and to
be honest I was tempted to maybe pull
this talk at this point when I thought
about it because really the only
businesses that will be affected by this
are those that use energy or transport I
think you’re getting my point
with a bit of rounding errors we’re
looking at around a hundred percent of
businesses now the ways in which this
will affect any given individual
business will of course vary but let’s
take one example from the International
Energy Agency research by the IEA
has shown that in order to meet our 2050
goal the emissions intensity of the
entire industrial sector will have to
dropped by 80% against today’s levels
this is not unlike telling a company
that today has 100 factories to produce
the same output in 2050 with just 20
factories and from the perspective of
business the idea of a rapid and
mandatory transition to
low-carbon economy should be setting off
risk alarm bells and with any material
business risk company leaders will face
increasing pressure from their
shareholders to show they’ve got a
strategy to respond to this risk but the
Paris agreement and our goal for a
low-carbon future isn’t all about risks
and challenges it also presents
incredible opportunities to business for
example some research was done not long
ago by professors and academics from
Harvard and London Business School and
it showed that if you took $1 and you
invested it in a portfolio of companies
20 years ago that were focused
exclusively on profit your $1 would have
grown to 14 dollars and 46 cents this is
a pretty good return unless you realize
that if instead you taken that same
dollar and twenty years ago invested in
a similar portfolio of companies that
focus both on profit and also on
adhering to strong environmental social
and governance standards because if you
did your one dollar would have instead
grown to twenty-eight dollars and 36
cents almost doubling your return now
this is of course a correlation and not
causation but at the very minimum it
shows that a company’s decision to
engage with environmental concerns and
sustainability is not correlated with a
lowering of financial performance in
fact recent research by the CDP formerly
the Carbon Disclosure Project has shown
that companies who have invested in
carbon reducing activities have enjoyed
on average an internal rate of return of
33 percent so whether you think of it as
a risk or opportunity the business case
for adapting to a low-carbon future is
clear manage the risks reap the rewards
and as a bonus your children get a
habitable planet to live on so we’ve
talked about these implications for
business and now it’s time to go back to
school
back to business school after all this
is where 42 percent of the CEOs of the
two fortune 100 companies come from so
let’s meet a typical Business School
student today this is Mary in 2017 she’s
28 years old and she studied hard to
secure her place in a leading business
school
now she’s if she passes all her exams
and graduates she can look forward to
working until she’s 65 or maybe 70 years
old assuming she does her work in Korea
will extend out until the year 2050 9 a
date by which time as we’ve just
discussed the global economy must be
well on its way to becoming carbon
neutral and so as we can see the career
of Mary and her peers will take place
against the backdrop of not just climate
change but also a global economy that is
radically and dramatically transitioning
to a low-carbon future so the question
is is Mary’s Business School giving her
the education on sustainability and
climate action that she will need if she
is to succeed over the next 40 years
well today it’s a mixed bag but it’s
important to give credit where credit is
due and a number of schools around the
world are making making important
positive moves in the right direction
whether it be academics undertaking
cutting-edge research on sustainability
like that we discussed earlier
from London and Harvard Business
School’s or maybe it’s sustainability
minded student clubs like the net impact
group who have blossoming and popping up
on campuses all around the world
there’s even an entirely new MBA
programs like the University of Exeter’s
one planet MBA but on the whole when it
comes to business curriculum and
sustainability the case is more business
as usual and where sustainability is
addressed it’s done so as a optional
elective or a side dish to the main game
but as we’ve just discussed climate
action and the business and it need to
respond to sustainability we’ll strike
at the core of business management over
the coming decades and so the message I
want to leave you with today is that
sustainability is in fact central to
business education not necessarily in
big green font or as a standalone
class in fact sustainability should be
integrated into the foundations of a
modern business curriculum
maybe it’s in accounting classes where
students should be discussing how
companies will track and report on their
environmental social and governance
performance finance classes should
include a mandatory lecture on the risks
associated with trauma with stranded
assets and at least one strategy
assignment in business strategy classes
should feature a scenario where carbon
is priced giving students the
opportunity to reflect on and practice
how they would respond to such scenarios
will be invaluable to their future
careers
so where are we and watch the verdict
for business schools there’s no doubt
that the trend on sustainability in
business education is a positive one but
I strongly believe that in less business
schools rapidly and dramatically
integrate sustainability into the core
of their business curriculum there’s a
real risk that they’ll end up failing
not just my generation so what are we
going to do about it
how can we make a change well they come
to the end of my MBA I don’t have all
the answers but I for one am committed
to pursuing a new reality and I believe
we all have a role we can speak in the
language of business and vote with our
wallets if you’re a consumer a
shareholder show business that there’s
rewards for taking action and taking
climate action seriously if you’re with
a company or a business professional
tell business schools and business
school ranking organizations that you
want talent that’s ready for a
low-carbon future and if you’re a
student or an alumnus demand more ask
questions and get involved
after all we’re the customer and last
time I checked we’re paying an awful lot
for it so there is one thing I learnt in
Business School and that’s that
organizational change takes time but I
believe that together with encouragement
support and pressure we can kick off a
revolution in business education that
will not only benefit future business
school students like me but also
businesses society at large and the
planet upon which we all depend thank
you
[Applause]
[Applause]
so as you’ve heard I’m a student at
London Business School but maybe not
your typical student
you see before I came to London Business
School I was a bit suspicious of this
thing called business and as a young
climate policymaker in Australia I’d
encountered my fair share of corporate
push back as weas tried to make progress
on climate action and yet over time my
views have evolved and the more I’ve
worked on the climate challenge the more
have become convinced that in addition
to government and civil society business
will be an absolutely critical player
when it comes to addressing the climate
issue and so two years ago
I packed up my comfortable public
servant life and head off for Business
School in London and it’s important to
say here that on the whole my experience
has been fantastic I’ve learned an
incredible amount and met amazing
students staff and teachers along the
way and yet despite these many positive
experiences there’s just one small
question that I can’t shake is Business
School failing my generation as you’re
probably imagining this question relates
to the subject of climate change but
maybe not in the way you’re thinking and
so for the remainder of this talk I want
us to put aside any thoughts of natural
disasters or polar bears and coral reefs
in fact the first thing I want you all
to do is to join me in a little exercise
I want you to close your eyes for a
moment and look inside of yourself and I
want you to find your own personal moral
compass you got it okay great now I want
you to take your hand grab hold of it
and yank it outside of you for some of
that might that might mean using two
hands if you’re particularly stubborn
for others it might come out rather
easily and maybe there’s something to
worry about there
so take it out and put it aside maybe in
your bag or somewhere you know where it
is
in case you want to put it back at the
end of this talk now this is important
because for the rest of my talk I’m
convinced that we don’t have any need
for morality and this is because what I
want to talk about today is not how
business can affect climate change or
the environment what I want to talk
about is how climate change or more
specifically action to address climate
change will affect business and why I
believe that this is something that
every business school student should be
aware of so what do I mean when I say
how climate change or climate action
will affect business as many of you may
know in December 2015
leaders and representatives of 195
governments got together and agreed on a
plan to decarbonize the economy to keep
warming below two degrees now there is
legitimate debate to be had as to
whether we have any chance or any will
to deliver on this Paris agreement but
for today I want you to all join me in
imagining that we will and if we do what
does this mean for business well at the
heart of the Paris agreement is what we
call our carbon budget in order to have
an 80% chance of meeting our two degree
dahl goal the world can emit a
cumulative total of 1845 Giga tons of
carbon dioxide equivalent so how we’re
going with that well in the hundred and
fifty years between 1850 and 1999 we
emitted 1010 Giga tons of co2 equivalent
then in the 15 years between 2000 and
2015 we emitted another 500 gigatons
unfortunately I’ve been to business
school and I’ve learned a few things
about addition and subtraction and what
I’ve and you’ll notice is that counting
all the emissions we’ve made so far what
we have left is just 335 Giga tons of
co2 to emit in the next 33 years if
we’re to hit our goals I raise all this
because what it means is that if we’re
going to achieve our goal things are
going to have to change they’re going to
have to change an awful lot and they’re
going to have to change quickly because
at the rate we’re on in just 10 years
we’re set to explode and blow up this
target in fact if we look out to the
roadmap to 2050 depending on our goals
and our appetite for risk we’re looking
at the need to reduce emissions by as
much as 95% against 2010 standards so
what does this mean for business and to
be honest I was tempted to maybe pull
this talk at this point when I thought
about it because really the only
businesses that will be affected by this
are those that use energy or transport I
think you’re getting my point
with a bit of rounding errors we’re
looking at around a hundred percent of
businesses now the ways in which this
will affect any given individual
business will of course vary but let’s
take one example from the International
Energy Agency research by the IEA
has shown that in order to meet our 2050
goal the emissions intensity of the
entire industrial sector will have to
dropped by 80% against today’s levels
this is not unlike telling a company
that today has 100 factories to produce
the same output in 2050 with just 20
factories and from the perspective of
business the idea of a rapid and
mandatory transition to
low-carbon economy should be setting off
risk alarm bells and with any material
business risk company leaders will face
increasing pressure from their
shareholders to show they’ve got a
strategy to respond to this risk but the
Paris agreement and our goal for a
low-carbon future isn’t all about risks
and challenges it also presents
incredible opportunities to business for
example some research was done not long
ago by professors and academics from
Harvard and London Business School and
it showed that if you took $1 and you
invested it in a portfolio of companies
20 years ago that were focused
exclusively on profit your $1 would have
grown to 14 dollars and 46 cents this is
a pretty good return unless you realize
that if instead you taken that same
dollar and twenty years ago invested in
a similar portfolio of companies that
focus both on profit and also on
adhering to strong environmental social
and governance standards because if you
did your one dollar would have instead
grown to twenty-eight dollars and 36
cents almost doubling your return now
this is of course a correlation and not
causation but at the very minimum it
shows that a company’s decision to
engage with environmental concerns and
sustainability is not correlated with a
lowering of financial performance in
fact recent research by the CDP formerly
the Carbon Disclosure Project has shown
that companies who have invested in
carbon reducing activities have enjoyed
on average an internal rate of return of
33 percent so whether you think of it as
a risk or opportunity the business case
for adapting to a low-carbon future is
clear manage the risks reap the rewards
and as a bonus your children get a
habitable planet to live on so we’ve
talked about these implications for
business and now it’s time to go back to
school
back to business school after all this
is where 42 percent of the CEOs of the
two fortune 100 companies come from so
let’s meet a typical Business School
student today this is Mary in 2017 she’s
28 years old and she studied hard to
secure her place in a leading business
school
now she’s if she passes all her exams
and graduates she can look forward to
working until she’s 65 or maybe 70 years
old assuming she does her work in Korea
will extend out until the year 2050 9 a
date by which time as we’ve just
discussed the global economy must be
well on its way to becoming carbon
neutral and so as we can see the career
of Mary and her peers will take place
against the backdrop of not just climate
change but also a global economy that is
radically and dramatically transitioning
to a low-carbon future so the question
is is Mary’s Business School giving her
the education on sustainability and
climate action that she will need if she
is to succeed over the next 40 years
well today it’s a mixed bag but it’s
important to give credit where credit is
due and a number of schools around the
world are making making important
positive moves in the right direction
whether it be academics undertaking
cutting-edge research on sustainability
like that we discussed earlier
from London and Harvard Business
School’s or maybe it’s sustainability
minded student clubs like the net impact
group who have blossoming and popping up
on campuses all around the world
there’s even an entirely new MBA
programs like the University of Exeter’s
one planet MBA but on the whole when it
comes to business curriculum and
sustainability the case is more business
as usual and where sustainability is
addressed it’s done so as a optional
elective or a side dish to the main game
but as we’ve just discussed climate
action and the business and it need to
respond to sustainability we’ll strike
at the core of business management over
the coming decades and so the message I
want to leave you with today is that
sustainability is in fact central to
business education not necessarily in
big green font or as a standalone
class in fact sustainability should be
integrated into the foundations of a
modern business curriculum
maybe it’s in accounting classes where
students should be discussing how
companies will track and report on their
environmental social and governance
performance finance classes should
include a mandatory lecture on the risks
associated with trauma with stranded
assets and at least one strategy
assignment in business strategy classes
should feature a scenario where carbon
is priced giving students the
opportunity to reflect on and practice
how they would respond to such scenarios
will be invaluable to their future
careers
so where are we and watch the verdict
for business schools there’s no doubt
that the trend on sustainability in
business education is a positive one but
I strongly believe that in less business
schools rapidly and dramatically
integrate sustainability into the core
of their business curriculum there’s a
real risk that they’ll end up failing
not just my generation so what are we
going to do about it
how can we make a change well they come
to the end of my MBA I don’t have all
the answers but I for one am committed
to pursuing a new reality and I believe
we all have a role we can speak in the
language of business and vote with our
wallets if you’re a consumer a
shareholder show business that there’s
rewards for taking action and taking
climate action seriously if you’re with
a company or a business professional
tell business schools and business
school ranking organizations that you
want talent that’s ready for a
low-carbon future and if you’re a
student or an alumnus demand more ask
questions and get involved
after all we’re the customer and last
time I checked we’re paying an awful lot
for it so there is one thing I learnt in
Business School and that’s that
organizational change takes time but I
believe that together with encouragement
support and pressure we can kick off a
revolution in business education that
will not only benefit future business
school students like me but also
businesses society at large and the
planet upon which we all depend thank
you
[Applause]
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