Alumni and students pose answers to the question: Where’s the Leadership on Climate Change, Harvard?
In the past several years the Harbus has run an alumni-sponsored series of at least nine ads and articles urging more action on climate change. Seven HBS alumni have joined forces to make this happen.
The latest of these, “Where’s the Leadership, Harvard?,” appeared as a centerfold spread last month.
In this issue, one of the contributing alumni, Roger Shamel (HBS ‘74) sets forth his own views, and surveys the other contributing participants about their views and experience on the issue. His full analysis can be found on our website (www.harbus.org). In addition, our Deputy Editor-in-Chief Pria Bakhshi (HBS’19) poses her own questions on the topic, and calls into question what business leaders need to be doing to respond to environmental challenges.
Roger Shamel (HBS’74):
Is climate change “the mother of all problems,” as Harvard’s renowned biologist E.O. Wilson says? There are some of us who think so, and we are concerned by the lack of leadership needed to address it.
When leadership fails at the highest levels, resilience and self-preservation demand that “backup” leaders respond. Author Wendell Berry defines leadership as simply seeing something that needs to be done, and doing it. Harvard’s marketing and mottoes emphasize leadership. Climate change is a problem so huge and complex that it has no precedent. So, although we understand that no one has assigned responsibility to Harvard, still, given the circumstances, we ask, “Where’s the leadership?”
This, I believe, summarizes the key sentiment that underlies the series of Harbus ads and articles to which seven of us HBS alumni have contributed. To be clear, although I have been in touch with the other six to varying degrees, it is important to note that the opinions expressed here are mine alone, except where I directly quote the others. Also, two of our number—F. Gorham Brigham Jr., and Delmore B. Markoff–formerly HBS’s eldest alumni, at ages 101 and 99, respectively, have passed on.
New Yorkers will recognize “If you see something, say something” as the 2001 slogan that the city’s Metropolitan Transportation Authority used, and then licensed to the U.S. Department of Homeland Security, as a way to encourage citizens to protect each other from potentially dangerous situations.
Although the original purpose of the slogan was to reduce the risk of a terrorist attack, one can imagine that the slogan may be applied to many situations, ranging from abandoned children, to theft and vandalism. Given the huge risks and opportunities associated with recent, rapid, human-caused climate change (CC), and seeing a lack of sufficiently strong (if any) leadership in Washington, and elsewhere, some of us decided to speak up. With “fresh eyes,” we reasoned, “Where’s Harvard?”
The story begins almost a decade ago, when HBS alumnus and Baker Scholar, Jeff Huggins (MBA ’86), a veteran of Chevron, Disney, and McKinsey & Co., noticed something that deeply disturbed him. First, Jeff had figured out, from paying attention to the science of climate change, that humankind had a serious problem on its hands. Then he noticed a series of impressive, full-page ads placed by ExxonMobil in the New York Times, touting the benefits of CC-causing fossil fuels, while ignoring or downplaying the associated problems. (Later we will label these problems “negative externalities.”)
For Jeff, a man with a healthy sense of what defines human ethics, it was the next dot in the series he was connecting, that constituted the last straw: He learned that one of ExxonMobil’s long-time board members was an HBS professor. This seemed to be seriously inconsistent with what Jeff had learned about business and ethics at HBS and elsewhere, and hence the first of many Harbus ads was born.
That was in 2008, the year that Harvard Business School celebrated the 100th year of its 1908 founding.
Unbeknownst to Jeff (living in California), but also in 2008, yours truly (Humphrey Fellow MBA ’74) was sitting in the Massachusetts shared offices of the management consulting firm and CC-related non-profit organization I’d founded, reading the preliminary program for the planned HBS centennial celebration in October. I noted with considerable disappointment that there was no mention of CC in the program. I called the person in charge at HBS, and succeeded in getting the program amended.
This is how the story started. Others have now joined us, but let’s back up to some first principles.
Words to the Wise
One might ask, first, “Is CC a threat?” and second, “Why should Harvard get so heavily involved?”
Tellingly, the man recruited to speak about CC at HBS’s “Centennial Global Business Summit,” attended by some 2000 guests, was John Doerr (MBA ’76), partner at Kleiner Perkins. John said, in part, “America has been borrowing money from China to buy oil from the Middle East and then burning it, throwing it up in the atmosphere. … That has got to stop, and it’s got to stop in the next decade or we are going to have a carbon crisis that is going to make this financial crisis look like a walk in the park.” Well, dear Harvard, a decade after 2008 would be 2018…so it’s time to act NOW!
Drew Faust also spoke at the Summit. Faust invoked the words of former HBS Dean Wallace B. Donham who had delivered a talk during the School’s 25th anniversary celebration titled “The Failure of Business Leadership and the Responsibility of Universities.” The year was 1933, the midst of the Great Depression. She recalled Donham’s belief about the importance of providing American business leaders with a vision that would transcend the confines of “economic self-interest.”
“The guiding purpose of business education, in his view,” she said, “was to provide a new class of leaders with specialized knowledge … but also to provide the breadth of vision to make business a force for good.” Clearly, Drew Faust understands the first principles of HBS.
One can’t help but note that this HBS as a “force for good” theme is still alive and well, as in current Harvard College Dean Rakesh Khurana’s acclaimed 2007 book, “From Higher Aims to Hired Hands, and, a decade later in the 2017 book by Duff McDonald, “The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite.” There is also the MBA Oath, which traces its roots to HBS, and which speaks of concern for society and the environment.
To we CC-concerned alumni, the clear NEED for leadership, combined with the CC WARNINGS from our own well-informed and scientifically literate alumni (e.g., Michael Bloomberg and Henry Paulson, to name two more, beyond Doerr), and the “force for good” IMPERATIVE, represent a “call to arms.”
Climate Science and Impacts
Tens of billions of dollars have been spent studying climate science over the past several decades. As with any complex system, such as the weather, or the stock market, the big picture is easier to predict than are the fine details. But the big picture is fine, even preferred, for we Harvard MBA’s, right?
So, here’s the big picture: Increasing concentrations of greenhouse gases, of which carbon dioxide (CO2) is the most critical to CC, are trapping increasing amounts of the sun’s heat within the Earth’s atmosphere, warming the Earth, and disrupting many of the Earth’s relatively sensitive natural systems.
These increasing concentrations of CO2 are coming mostly from our increased burning of carbon-based fossil fuels, such as coal, oil, and gas, releasing formerly-trapped carbon to the atmosphere many times faster than it can be re-absorbed. A warming Earth leads to: 1) melting ice caps, 2) rising sea levels, 3) increased forest fires, 4) habitat changes, 5) extreme weather events, and much more.
Most of these consequences are bad for humans and other living things that have evolved during thousands of years of relative climate stability. Human-induced climate change, such as we are now experiencing, seems slow on a human time scale, but is happening at a rate that is about one hundred times faster than natural climate change—and too fast for evolution or adaptation by many living things, likely including humankind. Worse, many serious CC impacts are already unstoppable, such as saving the Earth’s island nations from sea level rise. And, the list of unstoppable impacts will grow.
Why CC is “The Mother of All Problems”
A critical first step in solving a problem is to recognize it as a problem, including its scale, source, importance, and urgency We believe the CC problem is not fully recognized, especially in the U. S.
There are many major factors making CC a particularly difficult problem, but I think they can all be distilled down to elements of human nature. (Speaking as one trained in chemistry, I love to distill…and catalyze). Space doesn’t allow an exhaustive treatment of the topic, but consider these observations:
- We don’t learn from books as well as from experience—and we have NO experience with CC;
- As a result of # 1, we haven’t evolved systems, biological, nor man-crafted, to deal with CC;
- When in doubt about a novel situation, we follow the crowd, even if they are dead wrong;
- The default human action is to do what has always worked in the past, for parents, etc.;
- Moving large groups of people to a new way of thinking requires a future they can visualize;
- As a result of all of the above, reacting appropriately to CC requires uncommon leadership; and
- Holding things back, those who are benefiting from the status quo, of a fossil fuel-based economy (many having much financial and political influence), are working to preserve CC.
Related to the above, but worthy of special mention in light of the recent outing of perpetrators of sexual harassment, it’s worth acknowledging that the powerful social pressures to which we often unwittingly comply, sometimes lead to unintentional self-delusional and self-destructive behaviors—such as remaining relatively silent about sexual harassment, and much more inexcusably, CC!
An illustration of the power of social pressure—as a force for good here, is the ALS “Ice Bucket Challenge” accepted by Harvard Dean Norhia on 8/18/2014, then President Faust on the 20th, and MIT’s President Reif two days later. Why doesn’t Harvard harness such positive social pressure for good by developing a “Climate Leadership Challenge,” exploiting the suggestions in this article?
Beware of Negative Externalities and False Profits
A negative externality can be defined as “a semi-hidden cost felt by a semi-, or non-aware party other than the two parties (buyer and seller) normally involved in a transaction.” It is thus not often accounted for by anyone, and can lead to problems when the third party becomes fully aware of them.
Looking at the big picture, a negative externality can be thought of as either a market failure, or an accounting failure. If ignored, it “falsely” inflates the profits seen by the buyer and seller, while penalizing the third party. This is essentially what is happening with CC, where the buyer is buying and burning fossil fuels as an energy source, the seller is the producer of fossil fuels, and the third party is us, and everything on Earth that benefits from a stable climate, such as we’ve enjoyed for millennia.
Hence, properly accounting for the negative externality of CC, by, for example rolling the costs of CC into the costs of burning fossil fuels, is one very logical, if partial, market approach for addressing CC.
Assured Climate Change Problems And Opportunities
As alluded to before, just as it is impossible to accurately predict exactly what the weather and stock markets will do, so it is with our now-human-driven changing climate. Yet, with all three, some useful predictions can be made with a relatively high degree of confidence, and this information is useful.
But, as with any information, it is only useful if it is shared and understood. And, this is where most CC-related problems and opportunities reside—in the sharing of information, or lack thereof. There is probably no greater, nor more dangerous, gap in understanding information than in the realm of CC.
Fortunately, at least potentially, filling information gaps is something that universities were founded to do. And, Harvard, as the world’s most prestigious university, should rightly excel at this. Yet, the CC information gap persists, at our peril, and with the semi-tacit approval of some of Harvard’s own.
As one CC-informed Harvard professor has said, paraphrasing, “Everyone knows that it’s too late to save the island nations from sea level rise.” He didn’t elaborate on what this implies for the world’s coastal cities, yet, I know many Harvard alumni, not to mention many others, who are “CC clueless.”
My point is that we know more than enough about CC to react intelligently, to preserve a livable climate, and to take advantage of millions of profit-, and job-creating renewable energy opportunities. As is the usual case, there is already good evidence that these new opportunities will provide benefits that will exceed those of the old opportunities, for most people. That is, for those outside the fossil fuel industry—which, by the way should be the “energy industry,” if classic business strategy were to rule.
For more details on the developments—good and bad, but mostly bad–that we can expect from uninterrupted global CC in the coming years and decades, please go to www.globalchange.gov. This U.S. Government website provides a wealth of information—but, sadly, it is not widely known.
Pluralistic Ignorance And Harvard’s Responsibility
It is human nature, when faced with a novel situation, for us to decide what we’ll do based on what others around us do. This can be helpful when we’re in the company of those with experience or leadership ability; but it can be fatal in other circumstances (think lemmings). CC is a novel situation for all of us. We really have no experience with it—only some clues, relating to much more gradual, natural climate cycles, that scientists are able to tease from ice cores and other geologic records.
Hence leadership is critical, and this is where Harvard has an opportunity—or more properly and strongly stated, an ethical responsibility—to make an extremely good difference in the world.
Truth be known, according to an HBS survey, the biggest regret that Harvard alumni have expressed about their lives, has been “not being able to give back” as much as they’d like. Connecting the dots between the leadership needs surrounding CC, with the need to give back felt by Harvard alumni, creates an unprecedented opportunity for Harvard–the institution , and its leaders–to make the biggest good difference that the world has ever seen—starting with as little as the stroke of a “crimson pen.”
What Should Harvard Do?
Before getting to specific suggestions, I’d like to acknowledge, with great appreciation, the progress that Harvard has shown in addressing CC in the past several years, moving the topic from what I’d characterize as “just another one of many environmental concerns,” to one deserving of its own Harvard webpage, “Harvard Speaks on Climate Change.” HBS’s Business & Environment Initiative (BEI) has published an ever-improving “Climate Change 101” webpage, and an outstanding new teaching note, “Climate Change in 2017: Implications for Business.” Thankfully, the list goes on.
So, with all that progress, why are we still running ads asking about climate leadership in the Harbus, and why am I writing this article? Because we learned at HBS, and in life, that progress can’t be fully assessed unless it is measured against the goal to be achieved, and against the potential for growth or achievement that lies “hidden” in the entity showing progress. Hence an outstanding coach will praise team member progress, but always strive to assure that his team is on track to win the division title.
With CC, as was just reported in a new U.S. Government report, we remain on track for the continued deterioration of our climate, with severe, life- and property-threatening consequences for millions of people and companies. Also, given the U.S. withdrawal from the Paris Climate Accord–itself considered to be a half-measure—the onus is increasingly on businesses, universities, and other sub-national entities, to help close the gap between preserving a livable climate and losing everything.
To be blunt, Harvard is capable of doing much more, and much more is needed to get the job done!
As for the specifics of what more Harvard can and should do, a few years ago I sent HBS a 16-page email containing details of what I’d suggest, should Harvard take on what I’m now calling the “Climate Leadership Challenge.” For the sake of brevity, I’ll summarize and condense these suggestions into three categories–convening, teaching, and doing research, to use terms suggested by President Faust when she has spoken about key roles that “universities can and must play” in helping to solve CC:
- CONVENING: Harvard should show university-level leadership by organizing an annual “Climate Leadership Summit” that will inform alumni, and others, of key CC threats and opportunities–and challenge them to take on specific projects that will make a CC difference.
- TEACHING: Harvard should use her powers of communication and continuing education to assure that her students, and all 371,000 living alumni, understand that human-caused CC is: a) real, b) serious, and c) worthy of their serious attention and best leadership capabilities. As part of this effort, and crucially, HBS should embark on an ambitious campaign to correct the prevailing misunderstanding of negative externalities that has lead to the CC conundrum. (This campaign can be implemented using the tools already at HBS’s fingertips, or otherwise available, via: articles, books, editorials, teaching notes, social media, and other means.)
- RESEARCHING: Harvard should hire and promote faculty members who will focus on research, teaching, and writing that will help students, alumni, and others, understand and appreciate CC challenges and opportunities. Other schools are already ahead of Harvard.
Of course, as indicated above, there is much more that can be done. But, given the will to lead, Drew, and all of Harvard’s administrators, deans, faculty, and staff, have the resources to rise to the challenge. We CC-concerned alumni expect our numbers to grow, and our influence to spread, as CC continues, and its impacts become more and more visible to all. We hope that Harvard will come through soon!
It may sound trite, but never have so many depended on so few to make such a truly existential difference in the world. Harvard has the potential to catalyze worldwide pro-climate progress.
In conclusion, we trust that sharing our concern with Harvard, will encourage her to take up the climate call to action, and to amplify it by ten thousand-fold, demonstrating what Harvard is capable of doing, so that Harvard alumni, and others, fully appreciate the problems and opportunities associated with CC.
We want Harvard to lead by example. We’ve laid down the challenge. Harvard, will you accept?
The Seven Harvard Mba’s Behind The Story, In Their Own Words
- Dan Abbasi (MBA ’98)–Dan is a venture capitalist, a former climate change-related nonprofit senior advisor, and the former executive producer of “Years of Living Dangerously,” an award-winning television series dealing with climate change and its impacts. He currently lives in the greater New York City area, and is heavily involved in developing a “climate action platform.”
Dan writes, “I think it’s imperative that universities, as the most precious bastions of truth in our civilization, rise to the occasion in remedying the existential risk posed by climate change to all of us, especially the most vulnerable. Harvard has a special obligation, given its prominence and megaphone, and its business school even more so, given the role that its alumni and students must play – urgently – in allocating resources to tangible action. With time, climate change impacts keep escalating – making it ever more important that HBS shake off its inhibitions and do more!”
- F. Gorham Brigham, Jr. (MBA ’39)–Gorham was a scion of the Boston banking business, and a long time contributor to HBS, serving as his Class Notes secretary for 67 years. He died on September 1st, 2016, at the age of 101. I wrote an article about him for the February 2016 Harbus, entitled “Longevity 101,” following an interview at his Massachusetts residence.
Gorham wrote, excerpting from his 2016 letter to Harvard President Drew Faust, “I am writing to you to encourage you to inform all Harvard alumni of climate change.” “Educational institutions such as Harvard have a responsibility to society, to their alumni, and to themselves, to provide unbiased information relating to this most critical of all challenges facing us in the 21st century.” “When Harvard speaks, people listen.” “Will you please write to alumni to inform them of the basic facts about climate change—and to encourage them to help solve it?” “With my sincere thanks, F Gorham Brigham, Jr.”
- Jeff Huggins (MBA ’86)–As mentioned in the article, Jeff is a retired business executive and consultant, living in California. Sadly, Jeff is fighting a serious battle with cancer. We are hoping that he will live beyond the time when Harvard assumes the climate leadership role that we believe is befitting the world’s most respected university.
Jeff writes, “Regarding negative externalities, such as the causes of climate change, a huge and harmful gap exists between how business is presently practiced and the foundational premises and principles held to establish the justification of market capitalism. According to the modern-day justification, large negative externalities should be positively unwelcome, for numerous reasons. Responsible business leaders should want to eliminate or at least minimize them. HBS understands this, or should, but is doing far too little to ensure that business leaders and the public understand.”
- Del Markoff (MBA ’39)–Del was, at various times, a sales executive, and a business consultant to new ventures in advertising/broadcasting, in the lighting industry, and in energy conversion. He passed away on May 12, 2017, at the age of 99.
Del wrote, quoting from the letter he and Gorham Brigham placed in the April 2015 Harbus, “We, the proud members of the Class of 1939, the “eldest statesmen” of the school, being aware of the many great successes in problem solving by our school, wish to propose a new project.” The letter specified five climate change questions that they wanted HBS to examine, before concluding, “Leadership …from our school (Harvard)…would be a great step forward in improving the well-being of our world.”
- John McCall MacBain (MBA ’84)–John, a Canadian citizen, and a Rhodes Scholar, is the founder of the McCall MacBain Foundation and Pamoja Capital SA, its investment arm. Previously he had founded a leading classified advertising company. He lives in Switzerland.
John writes, “There is no question that the theory of capitalism, a strong tenet of HBS, includes the need to adjust for negative externalities. Climate change is a classic negative externality, and one that threatens the survival of humankind. In our defense of capitalism, the correction of this negative externality should be an unquestioned goal. I hope that Harvard can stand up and be counted, and counted on, to help our world as we navigate this major course correction. Let us unite in our defense of capitalism as a friend of our planet, not its enemy.”
- Joan Mokray (MBA ’74)–Joan’s career was spent in U.S. manufacturing. She is now an independent business consultant and entrepreneur living in the greater New York City area. She is a long-term HBS volunteer, having served as her class’ HBS Fund chair for nearly 18 years.
Joan says, “I have always believed that HBS educated me and others to lead and make a difference in the world. As I started to delve deeper into the position HBS had taken as regards climate change, I was surprised and appalled that more wasn’t happening. I was inspired by HBS’s two oldest alumni, Gorham Brigham and Del Markoff, asking HBS to undertake a project to investigate climate change problems and opportunities. Our climate is changing, is warming, and we have very little time to put together strong responses. The global HBS community is uniquely qualified to make a strong and needed difference in whether or not our world survives.”
- Roger Shamel (MBA ’74)–Roger is the retired founder of an international chemical management consulting firm, and the founding director of a nonprofit focused on developing efficient and effective means of addressing global climate change. He lives in New Hampshire.
Roger says, “As a retired chemical management consultant who spent many years examining complex issues for a wide variety of clients, often developing long-range forecasts of supply, demand, prices, and so on, I see climate change, and Harvard’s potential role in addressing it, as follows: Humankind has never experienced a situation as challenging as human-caused climate change. We need two things to successfully address it: 1) True, outside-the-box, leadership that is at the scale needed, and 2) Leadership from an entity that can have a catalytic impact on lots of smart people. Hello, Harvard!”
Pria Bakhshi (HBS ’19):
How Should Business Leaders Address Global Climate Change?
Posed with the same “Where’s the Leadership?” question in last month’s issue of The Harbus, Deputy Editor-in-Chief Pria Bakhshi (MBA ’19) considers how business leaders should respond to environmental challenges.
This year, the planet has experienced an overwhelming number, intensity and frequency of natural disasters, which may be related to human-caused climate change. A study released just this month, compiled by 13 US federal agencies, argues that it is “extremely likely” that human activity is causing rapid global warming. Against this backdrop, in last month’s issue of The Harbus, two of our alumni, Roger Shamel (’74) and Jeff Huggins (’86) posed the question, “Where’s the Leadership?” – calling for business leaders to take responsibility and address this challenge. But how should business and business leadership respond to that appeal?
If the purpose of business is to maximize profit for owners (or shareholders), as posited by Milton Friedman, the strongest motivator for action will be when climate change threatens the bottom line. This is increasingly the case. Changing weather patterns and extreme weather pose a great risk to ‘business as usual.’ The collective corporate memory has not forgotten the severe floods in Thailand in 2011. In addition to leading to a horrific loss of life, this natural disaster wreaked havoc on global supply chains, by some estimates suspending operations at over 14,000 companies worldwide (including Apple and Ford). Setting aside the human trauma and focusing on the business impact of such events, one would expect the corporate world to future-proof their operations against the increasing risks arising from global warming.
Historically, the first role of business has been to be reactive. Companies such as Johnson & Johnson have taken great steps to drive impact through considering their supply chains. For instance, J&J are participants in the Carbon Disclosure Project’s (CDP) Supply Chain Program, which works with the company and its suppliers to measure and develop reduction plans for energy use and greenhouse gas emissions. The CDP is one of many organizations that companies can work with to find the most pressing sustainability issues in their supply chains. Once these are identified, they can implement more targeted measures, whether by focusing on their sourcing of raw materials and managing manufacturing sustainably.
Similarly, businesses can evaluate their own operations. We are already seeing some examples of this from large US corporations – for example, 25% of Wal-Mart’s operations now run on renewable energy (with a target of 50% by 2025). In addition to moving away from fossil fuels, companies can innovate to improve energy efficiency. Ultimately this will hopefully lead to the expansion of the renewable energy market – passing the benefit to a wider number of players, beyond those with Wal-Mart-sized economies of scale.
Mike Toffel, head of the RC TOM (Technology and Operations Management) course and faculty head of the HBS Business and Environment Initiative, has advocated that in addition to “operational greening programs,” companies must become “activists” – using their might to provoke a coordinated response from governments. Given the scale of the problem, Professor Toffel writes that only governments can provide a solution on a systemic level.
I would suggest that, in addition to activism and reaction, there is a third role for business leaders, which is as ‘Revolutionary.’ First-year Harvard Business School students will remember wide-ranging discussions of Incremental versus Revolutionary innovation in Leadership and in Technology and Operations Management class the past few weeks. “Greening” and activism fall closer to the incremental boundary. For businesses to really address climate change, they need to be firmly on the other end of this spectrum. Elon Musk is an obvious example of such a leader, revolutionizing transport (not just on Earth, but beyond!). Addressing the monumental challenge of climate change requires businesses, like Tesla, to truly transform their industries and provide a wake-up call to their incumbents. We need to see more leaders defining their business around this issue, not just in reaction to it.
Shamel and Huggins asked last month, if HBS is “serious about human and environmental sustainability, and the ethical attitudes required to actually achieve them.” I would answer that with a resounding yes. With resources such as the Business and Environment initiative just across from Aldrich Hall, HBS students have at our fingertips a hub of all research, cases, and discourse regarding the environmental challenges facing business leaders today. But we should take advantage of it. Whether through Incremental or Revolutionary measures, we too have a responsibility to address climate change, as future leaders who truly will make a difference in the world.
Roger Shamel (HBS ‘74) is the director of a nonprofit organization promoting climate awareness. He is a retired management consultant.
Pria Bakhshi (HBS ’19) is originally from india via London, England and graduated from the London School of Economics and Political Science in 2011. Pria is an RC, Section G, and is a Student Advisor to the HBS Business & Environment Initiative. Prior to HBS, she spent six years in sales and trading at Goldman Sachs in London.