let’s play a game I’m going to say a
term and I want you to think of the
first thing that comes to mind
ready climate change I ask brown
students the same question and here’s
some of the answers that they came up
with disaster bad polar bears pretty
typical responses but let’s do one more
and this time I’ll give you a sentence
and not a term what causes climate
change again I surveyed the campus and
this time here are some of the answers
that they got emissions coal oil US but
one stuck out to me above all the rest
and it was persistent no matter how many
students I asked now its preventable now
preventable how can something as large
as climate change something that’s
already been set in motion be
preventable it’s already happening and
even if it were preventable what could
you or I as individuals do about that or
even though 100 people in this room
climate change is a global issue was a
small proportion of that population well
that is why today I’m not here to talk
about climate change in the individual
but rather the two with one important
intermediary the corporation well what
does the corporation in this sense we’re
talking publicly traded companies owned
by shareholders such as you and me
anyone with a 401k plan or anyone that
invests their money by other means and
held up by a body of stakeholders
companies are inextricably tied to our
day-to-day lives and those are subject
to our demands and our investments and
yet 100 of the largest companies are
responsible for 71 percent of emissions
since the 1980s
that’s roughly three-quarters of all
emissions in the last 40 years
100 companies that’s 100 companies that
again are tied to me and you and
25% that is how much Facebook stock
dropped in one day companies are
constantly submerged in the issues of
the present what does that mean
well it means that 80% of CEOs and CFOs
are willing to forego R&D spending and
55% of them are willing to put off long
term projects for the sake of meeting
quarterly or any report expectations
what does that mean again it means that
corporations are tied the shareholder
expectations of profits and releasing
companies are consistently fighting for
day to day competitive advantages
whether it’s for their corporate bottom
line or their hourly growth margins in
fact Facebook lost 25% of their overall
value in one day when they announced in
a quarterly earning report that they
were going to be seeing reduced costs
and reduce revenues as a result of them
trying to tackle their privacy issues
and data security something I’m sure
many of us could argue is a long-term
problem and incredibly important in
today’s age of the internet that’s one
quarter of their entire value lost in
one day because they tried to solve a
long-term problem that was eating away
at their corporation if we penalize
companies for trying to search for
long-term solutions and sacrificing
short-term revenues and profits how can
we ever expect them to care about the
environment and climate change but not
only that climate change has severe
implications for
the corporation and the overall economy
this takes place in two ways
transition and physical risks imagine
you were a corporate conglomerate with
global operations and your business
relied heavily on consistent shipping of
materials and goods from ocean ocean and
country to country well the next 40
years we expect sea level rise and an
increase in frequency of extreme weather
events and hurricanes something that
promises to disrupt operations increased
costs increased prices decreased stock
valuations and result in a general
slowing of the economy the company
because it’s so caught up in the present
may not be able to see this but we as
patients of the economy and patients of
the company can and through our
patronage we can change the way that
these companies shape the future how do
we do that that seems so daunting of a
task well to change in the way we invest
recently there’s been a surge in what is
known as ESD investing which stands for
environment social and governance
investing and behind this search is an
understanding that companies that care
about their environment and social
impact perform better in the long term
this is the Parnassus endeavour fund
it’s one of the many funds to brown
Investment Office uses to grow the
endowment and as you can see over the
last 10 years they’ve outperformed the
market by roughly 3% something that’s
incredibly difficult to do in the long
term and how did they do that well by
incorporating ESG core to their strategy
and that they invest in companies that
take very seriously ESG metrics
companies in fact that care about is she
took a substantially less severe hit in
the 2008 financial crisis compared to
the rest of the economy and compared to
companies that didn’t take in ESG now
most of us in this room our Investor is
one way or another whether that’s again
through a 401k or pension plan through a
sort of FinTech or simply through our
purchases
but also right an institution in Brown
University that sends a large proportion
of students to talk to your banks and
investment firms companies that have a
larger sway over the corporation the
theme of today’s conference is the
butterfly effect which stands for a
mining shift in a complex system
catalyzing a complex and major systemic
change well in this sense we the
shareholders and stakeholders are the
butterfly as we flap our wings and let
companies and our employers invest and
act unsustainably and the tornado
well–that’s climate change it is up to
us as individuals to change our ways and
in effect we can contribute to a change
for a particular problem that seems too
big for any single one of us a tackle
thank you [Applause]
term and I want you to think of the
first thing that comes to mind
ready climate change I ask brown
students the same question and here’s
some of the answers that they came up
with disaster bad polar bears pretty
typical responses but let’s do one more
and this time I’ll give you a sentence
and not a term what causes climate
change again I surveyed the campus and
this time here are some of the answers
that they got emissions coal oil US but
one stuck out to me above all the rest
and it was persistent no matter how many
students I asked now its preventable now
preventable how can something as large
as climate change something that’s
already been set in motion be
preventable it’s already happening and
even if it were preventable what could
you or I as individuals do about that or
even though 100 people in this room
climate change is a global issue was a
small proportion of that population well
that is why today I’m not here to talk
about climate change in the individual
but rather the two with one important
intermediary the corporation well what
does the corporation in this sense we’re
talking publicly traded companies owned
by shareholders such as you and me
anyone with a 401k plan or anyone that
invests their money by other means and
held up by a body of stakeholders
companies are inextricably tied to our
day-to-day lives and those are subject
to our demands and our investments and
yet 100 of the largest companies are
responsible for 71 percent of emissions
since the 1980s
that’s roughly three-quarters of all
emissions in the last 40 years
100 companies that’s 100 companies that
again are tied to me and you and
25% that is how much Facebook stock
dropped in one day companies are
constantly submerged in the issues of
the present what does that mean
well it means that 80% of CEOs and CFOs
are willing to forego R&D spending and
55% of them are willing to put off long
term projects for the sake of meeting
quarterly or any report expectations
what does that mean again it means that
corporations are tied the shareholder
expectations of profits and releasing
companies are consistently fighting for
day to day competitive advantages
whether it’s for their corporate bottom
line or their hourly growth margins in
fact Facebook lost 25% of their overall
value in one day when they announced in
a quarterly earning report that they
were going to be seeing reduced costs
and reduce revenues as a result of them
trying to tackle their privacy issues
and data security something I’m sure
many of us could argue is a long-term
problem and incredibly important in
today’s age of the internet that’s one
quarter of their entire value lost in
one day because they tried to solve a
long-term problem that was eating away
at their corporation if we penalize
companies for trying to search for
long-term solutions and sacrificing
short-term revenues and profits how can
we ever expect them to care about the
environment and climate change but not
only that climate change has severe
implications for
the corporation and the overall economy
this takes place in two ways
transition and physical risks imagine
you were a corporate conglomerate with
global operations and your business
relied heavily on consistent shipping of
materials and goods from ocean ocean and
country to country well the next 40
years we expect sea level rise and an
increase in frequency of extreme weather
events and hurricanes something that
promises to disrupt operations increased
costs increased prices decreased stock
valuations and result in a general
slowing of the economy the company
because it’s so caught up in the present
may not be able to see this but we as
patients of the economy and patients of
the company can and through our
patronage we can change the way that
these companies shape the future how do
we do that that seems so daunting of a
task well to change in the way we invest
recently there’s been a surge in what is
known as ESD investing which stands for
environment social and governance
investing and behind this search is an
understanding that companies that care
about their environment and social
impact perform better in the long term
this is the Parnassus endeavour fund
it’s one of the many funds to brown
Investment Office uses to grow the
endowment and as you can see over the
last 10 years they’ve outperformed the
market by roughly 3% something that’s
incredibly difficult to do in the long
term and how did they do that well by
incorporating ESG core to their strategy
and that they invest in companies that
take very seriously ESG metrics
companies in fact that care about is she
took a substantially less severe hit in
the 2008 financial crisis compared to
the rest of the economy and compared to
companies that didn’t take in ESG now
most of us in this room our Investor is
one way or another whether that’s again
through a 401k or pension plan through a
sort of FinTech or simply through our
purchases
but also right an institution in Brown
University that sends a large proportion
of students to talk to your banks and
investment firms companies that have a
larger sway over the corporation the
theme of today’s conference is the
butterfly effect which stands for a
mining shift in a complex system
catalyzing a complex and major systemic
change well in this sense we the
shareholders and stakeholders are the
butterfly as we flap our wings and let
companies and our employers invest and
act unsustainably and the tornado
well–that’s climate change it is up to
us as individuals to change our ways and
in effect we can contribute to a change
for a particular problem that seems too
big for any single one of us a tackle
thank you [Applause]
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