- Well good morning everybody.
Welcome.
It's great to see this audience
of well-dressed, attractive,
enthusiastic people
on a Saturday morning
to talk about climate change.
Who would've thunk, right?
But we're really pleased that you're here.
Welcome to the first
ever Global MBA Summit
on Climate, Capital, and Business.
So this is a first of its kind,
hopefully not the last,
and I hope you all really
enjoyed the kickoff yesterday.
I think really fascinating discussions,
I've heard great feedback from everybody
on the discussions with Scott Jacobs
and Matt Arnold and really
queuing these issues up.
My name is Dan Vermeer.
I'm the executive director for the
Center for Energy Development
in the Global Environment,
what we call EDGE Center here,
and I'm a professor at the business school
and also at the environment school
here at Duke.
And on behalf of our
center and our university,
we welcome you.
We hope that you enjoyed a little bit
of southern basketball
hospitality last night,
found a place to watch the game together,
and are meeting new people
that you can continue
a really important conversation with.
So, great to have you all here.
Katie mentioned several of the thank yous,
but I'd like to just, first of all,
thank all of the students who have come
on a Saturday morning,
especially those of you
who have traveled here, taking a risk
to get on a plane or get in a car
to come to a weekend
conference on climate change.
We really appreciate
that you made the trip
and that you're part
of hopefully something
that changes the conversation.
I'd also like to thank
the Duke students that are
in the audience, especially those
that have been volunteers and fellows
in helping to get this all set up.
Our sponsors, our knowledge partners,
our academic partners--it's
been really great
to see the level of the
excitement about the event grow,
and we said "well no this
isn't just a Duke event;
"this is a national event."
We have 15 different universities
from around the country
and around the world
that are participating
in this conversation.
So I think raising it to that level,
realizing the shared stake
that we all have in this
has really brought people
together in a powerful way.
And I'd like to thank
my colleagues at Fuqua,
the film crew, and the organizers,
and especially Katie Kross
that's done an amazing job
to get us to this point.
So, first of all I'd
just like to thank Katie.
(applause)
So, why ClimateCap?
About a year ago, Katie
and I had a conversation,
and we both were reflecting
on the many events
that we go to externally.
We've been to many events
that are on climate change
and business and said
this conversation is happening
in the private sector,
but we don't see it
happening in the same level,
in the same intensity, and
certainly the same level
of sophistication among
our students in the MBAs.
So we decided that really there is a need
and an opportunity to
invite a deeper conversation
about the relevance of
climate change to business
among MBA students.
So we targeted the MBA audience.
We wanted this not to be a conference,
we called it a summit because
we don't want it to be
only a series of talking heads,
but that we invite you
into a conversation.
And I'll talk a little
bit more about the agenda
in a moment, but my view is
if you sit passively listening for a day,
you might have moments
that you're excited,
but you'll walk out and it'll
be pretty tough to remember
what happened here this weekend.
So I want to make sure
that everybody has a chance
to check in in this conversation.
So make a point of the
conversations in the hall
and especially in our afternoon sessions,
the industry sessions,
that you check in and start verbalizing
what you see is relevant to your career,
to your life, and to the business world
about these issues that
we're discussing today.
So, why now?
Some people, when we started, said,
"Yeah maybe you should
talk about climate change,
"but maybe you could call
it something different."
And we decided we didn't want to do that.
We felt it was really important
to have a conversation
about climate change,
to raise the level of
visibility and awareness,
to have an open discussion
about what is it that we know,
and what are the unknowns?
Because both of those are relevant
if you're in business
in trying to make decisions
for your organization.
We believe that this is a moment where,
because there isn't universal
government leadership
on this issue, anything but,
in some ways it raises
the ante for business.
They are more visible, more
vulnerable, more counted on
to provide the leadership, and the vision,
and the pathway forward on this issue.
So it's not a moment to step back,
it's actually a moment to step up,
whether you want to or not
in this leadership vacuum.
And in the real world,
those of you who make everyday decisions
about your business, are
thinking about climate change
all the time, and we'll hear
from several people today.
Diane Holdorf from Kellogg
and many of the other
speakers will be talking
about decisions that are
driven by climate factors.
Things like operational decisions.
Things like investment decisions
are driven by considerations
related to climate.
Understanding how your risks
are changing and transforming.
Where you want to invest
and where the policy debates might go.
All those are everyday
kind of considerations
for everyone in business now.
So in that sense, climate
change is uncontroversial.
It's a feature in the landscape,
and an increasingly important one.
We also wanted to target
MBAs because we feel like
there is a delta we want to address.
While many students, especially those
that are part of Net Impact or pursing
energy or sustainability careers
may understand this issue in depth,
the mainstream MBA audience doesn't have
as much awareness about this issue,
and in fact we have a
group of graduate students
from Fuqua and Kenan-Flagler at UNC
that have done research
on this issue recently,
and I just wanted to share
a couple of the highlights
of the research that they've done
in the last few months.
They found that most MBAs
don't rate climate risk
to be as material as, for example,
something like digital
security or labor issues,
but they are very responsive
to new information.
When they are given information
about the risks that are
driven by climate change,
they respond and raise
the priority of that issue
pretty quickly.
So, we know that there's a kind of delta.
The implication is that
we need to increase
the quantity and quality
of the information
about climate change
and use it to inform our
investment decisions.
So I think a lot of the discussions
that you'll hear about disclosure
and about quality information
are really critical
in closing that gap of awareness.
The second thing they
found is that most MBAs
don't feel prepared to
assess climate risks.
They may be aware of
climate change broadly,
but they aren't necessarily
able to map that
to specific manifestations
like food security
or involuntary migration.
So understanding climate
as a systemic force
that drives outcomes in a variety of ways,
that have real business implications,
I think doing that mapping
is still not on the radar.
So the implication here
is that we need to learn
how to connect the dots.
So this research I think
has been really helpful
in framing the issues.
I think we are in the midst
of a developmental process.
The first phase of this discussion
is that climate change is real,
but is outside business.
So why is that?
It's because climate change is
the ultimate wicked problem.
It has many stakeholders,
it's really hard to define,
it's hard to connect cause and effect,
the actions you take now
can be displaced decades
or even centuries into the future,
and that those who are most responsible
and empowered to take action
also have the biggest stake
in the status quo.
And those that have the least ability
to influence are the ones
that are affected the most.
So this is a classic wicked problem.
And so it's not surprising
that this has been a hard issue
to get our arms around.
I think following that kind of idea
that climate change is
somehow outside business,
I think the idea of risk and that climate
is a threat multiplier has
now become quite socialized
among most business professionals.
They're aware that the
planet's average temperature
has risen almost two degrees Fahrenheit
since the late 19th century.
Most people know that 16
of the 17 hottest years
on record have been since 2000.
And now there's empirical evidence,
not projections of models,
that point to acidifying oceans,
rising sea levels, you know the story.
Right?
So now we now are not
looking at what we think
the future might be, but
we're seeing it happen
in front of our very eyes.
The World Economics
Forums Global Risk Report
has seen this kind of rise
of climate-related risk
go to the top of the agenda
over a lot of the other issues that are
on the business agenda, this one is
increasingly seen as an interconnected
set of priorities that
businesses have to wrestle down.
And we know that there
are real costs associated
with climate change.
Just in the US government, due
to extreme weather and fire,
the US government has spent
about 350 billion dollars
in responding to climate-related issues.
And I think a useful framework is the one
that the Bank of England came up with
in identifying that there's actually
three categories of risk.
There's physical risks,
the things like the storms
and floods, and of course all of that is,
as we project in the future,
not fully known.
So it's based on models
trying to understand those physical risks.
But there's two other kinds of risks
that are not directly related
to those physical risks.
One is liability risks.
How many of you know about
the children's lawsuit
against the US government
for not taking action
on climate change?
Or Schwarzenegger's recent statement
that he wants to sue the oil companies
for first degree murder.
Now I'm not saying that
there are legally viable,
but I am saying that there is a category
of liability risk that has to
be on the radar for companies.
The third is the most interesting to me,
which is a transition risk.
The idea here is that
as the issues of climate change unfold,
it'll drive investments
and new technology.
It'll drive policies, and
companies and economies
that don't continue to
tack to the awareness
of the world that we're heading into
are placed at a
increasingly risky position.
So a sense to get out of sync
with what we know about
where the world is going
sets us up for a disruptive,
disorderly transition
sometime in the future.
I don't think that's in
our economic interest,
and it's not in our societal interest
to let ourselves just sit back and wait
and build the pressure
in that rubber band.
So I think a lot of interesting issues
that we'll get to unpack here,
I think the third phase
is seeing the opportunity
of climate change.
Investment, growth, and
transition in our economy.
So all of these I think
are really important frames
for thinking about climate change.
Both through the lens of risk
as well as opportunity,
and so let me just highlight a few points
before we get on with the program
What should you look for?
I'm going to give you a few
questions to look for tday.
The first is:
what are the hidden risks
and the hidden opportunities?
So we all have kind of a
short list of what we know
is coming, what we are familiar with
in terms of the risks and opportunities.
The business advantage will be built
around the hidden risks and opportunities
that aren't well-known,
aren't well-understood,
and there's real competitive advantage
in seeing those things before others.
Number two: how will climate
change play out by location,
by industry, and which countries
will really take the lead
on these issues?
So I think the localization
of climate change
is really critical.
Three: timing.
What are the consequences
of a delayed start?
And I think we can say
we are in a position
of a very delayed start
on climate change.
Things that we may have
addressed two decades ago
that we're still waiting
for the right moment.
So what's the consequence
of that delayed start?
Fourth: what's the future
of climate information?
I think some of the disclosure
efforts around climate
are really critical for
businesses as they begin to see
and expose the kind of
vulnerabilities that they have
around these issues as well as
where those opportunities are
and those increasingly being
taken into consideration
by investors.
And finally: what new industries
will emerge and evolve
as a result of this?
And I'm really excited that I
think there are whole classes
of industries that haven't
even been created yet
that will be imperative not
only for the future growth
of our economy, but for the
wellbeing of society long-term.
So a call to action,
former President Obama said,
"We're the first generation
to feel the effects
"of climate change and the last generation
"who can do something about it."
That's you and me.
That's us in this room and
everybody that we can touch.
This is the moment that we can step up in,
and so I encourage all of you to recognize
that's an opportunity that's
sort of unprecedented.
It can be scary, it can be confusing,
but it is certainly the
most exciting of times.
Let me give you a sense of
where we're going to go today.
The logic of the summit,
we started last evening
by creating a framework
of risks and opportunity,
today we're going to
address: what do we know?
And: who has a stake in
action on climate change?
So this will include a
briefing on climate science
and policy, a panel discussion
on pricing climate risk
and investment.
We're going to explore the
future of energy. We're going
to evaluate how companies
might pursue strategies
and assess the value of climate action.
And we're going to understand
how business schools
might revise their curriculum
to prepare future leaders
for this challenge.
After lunch, you're all going
to go into industry breaks.
That does not mean it's a good time
for you to do some other work.
Please attend.
It's very attempting after lunch.
Ugh, emails.
Let the emails rest, it's Saturday.
Nobody wants you to respond on a Saturday,
so please attend.
And so you'll have a change
to engage with others.
We'll come back to discuss
what's the innovation
portfolio that is emerging,
and finally we'll bring
in some of the people
who have been working on
these issues a long time
to understand the essence of
the leadership opportunity
around climate change.
So with that, I would like
to introduce our first couple
of sessions.
I'm pleased to invite Katharine Mach
from Stanford University to
do our first presentation.
Katharine leads the Stanford
Environment Assessment Facility
where her research is focused
on integrative assessment
of climate risks and response options.
Before going to Stanford,
Katharine co-directed
the working group for the
Intergovernmental Panel
on Climate Change which
is the gold standard
on knowledge on climate change
which culminated in the
fifth assessment report
of IPCC's CC.
And Katharine received
her PhD from Stanford
and her Bachelor's from Harvard.
That'll be followed by a panel discussion
on investor's perspectives
on pricing climate risk
with Kate Gordon from
the Paulson Institute,
Elizabeth Lewis from
Terra Alpha Investments,
Mark McDivitt from State
Street Corporation,
Ron Temple who is from
Lazard Asset Management,
and that panel will be
moderated by Dan Saccardi
from Ceres.
With that, I'd like to
invite Katharine to the stage
and we can begin.
