by Linda Low, ClimateCAP Fellow, MIDP'18, Duke University
Tensie Whelan, Clinical Professor of Business and Society and Director of the Center for Sustainable Business at NYU's Stern School of Business, and one of the speakers at ClimateCAP 2018, is helping companies understand how to model the financial impacts of sustainability issues like climate change. We asked her to share her thoughts on how climate change affects business.
Is climate change a business imperative? If yes, why?
Tensie Whelan: Climate change is a business imperative because it creates material risk and opportunity. On the risk side, it disrupts transportation, distribution and supply chains. On the opportunity side, those companies that develop climate change strategies, technologies, products and services to tackle climate change will create financial and societal value.
How have you seen the conversation on business and climate change shift over time?
Whelan: Yes, business now sees addressing climate change as a material issue that they have to address, partially because government is ineffective and because employees, consumers and investors are beginning to demand business engagement.
How has engagement of executives changed over time?
Whelan: A younger generation of business leaders is more concerned about the issue, both for themselves and their descendants. They are setting science-based targets, holding themselves accountable through public reporting, and embedding it into their core business strategy.
What would you say is the biggest risk to companies when it comes to climate change?
Whelan: It varies depending on the industry. For any industry dependent on natural resources, there is a big risk of quality and quantity challenges -- e.g. crop productivity is already being affected. For real estate insurers, there is a risk in terms of huge claims due to extreme weather.
What do you want MBAs to know about climate change and how it affects business?
Whelan: Climate change will affect all industries and all positions within companies, whether they work in finance, marketing, HR, or investing. MBAs will need to understand and manage for the risks but also proactively hunt for the solutions. And they need to be prepared to work with a broad variety of stakeholders on the issue from NGOs to communities to employees.