Economics + science in climate change is good business

by Linda Low, ClimateCAP Fellow, MIDP'18, Duke University

Participants from 16 MBA schools, business leaders, and global experts will convene at ClimateCAP – a new conference from Duke’s Fuqua School of Business – to assess the implications of climate change on business and investment. I spoke with panelist Maggie Monast, Senior Manager of Economic Incentives with EDF’s Ecosystems Program, to understand how climate change is shaping industries and markets.

EDF deploys economics and science to tackle issues with practical solutions. Is climate change a pressing business issue?

Photo - Monast, Maggie.jpg

Maggie Monast: Absolutely. Customers, employees, and investors are demanding strong sustainability commitments from businesses. It’s that simple. If sustainability wasn’t good for business, so many companies would not be engaged in major environmental initiatives. For example, we work with Walmart to support their implementation of Project Gigaton, an ambitious initiative to remove 1 gigaton of greenhouse gas emissions (GHG) from Walmart’s supply chain by 2030. We also work with Smithfield Foods, the world's largest pork producer, who has pledged to cut GHG emissions 25 percent by 2025. McDonald’s, the world’s largest restaurant company and one of our oldest partners, is taking steps to achieve 100% of its packaging from certified or recycled sources by 2020. While we work with major corporations such as these, we also work with farmers to understand how they can be part of the solution, and scientists to make sure that the environmental improvement is real.

How have you seen the conversation on business and climate change shift over time?

Monast: In my seven years at EDF, I’ve seen more and more businesses transform what it means to do “business as usual” by incorporating environmental goals into their products, operations, supply chains and advocacy. Sustainability goals have gone from being “nice-to-have” to “must-have” for businesses of any industry, size or location.

How has engagement of executives changed over time?

Monast: Our EDF+Business team works with leading companies and investors to raise the bar for corporate sustainability leadership by setting aggressive, science-based goals; collaborating for scale across industries and global supply chains; and publicly supporting smart environmental safeguards. From this work over the years, we’ve had the chance to work with executives from all types of companies including IKEA, Walmart, KKR and FedEx. We decided to share a few of our recent conversations with these executives through our EDF+Business blog series. I’d encourage anyone interested in exploring trends in sustainability leadership to give these a read.

What would you say is the biggest risk to companies when it comes to climate change?

Monast: As we saw from the onslaught of extreme weather events in 2017, absolutely no business is immune to the effects of climate change anymore. Disasters brought more than $300 billion in damages this year, a 60-percent increase over 2016, Swiss Re reported. Every business leader knows that severe storms and wildfires threaten to disrupt a company’s operations and growth at any given time and could affect a company’s entire supply chain. It’s important for companies to factor resilience to climate change into their operations.

What do you want MBAs to know about climate change and how it affects business?

Monast: Thriving businesses and a healthy environment are crucial to each other’s success, and to a thriving world. It’s important that we forge solutions that benefit both. It’s imperative that we understand the implications of climate change.