Sustainable Innovation Summit



November 5, 2007

Thank you very much. It is great to be here at Thunderbird as part of your Sustainable Innovation Summit. And it a thrill it is to be addressing a group of T-birds. It inspired me, in fact, to consider all of the avian analogies we can apply to what’s been happening on the climate issue of late.

See, for too long, climate skeptics and some of our political leaders have been too chicken to address this issue. They’ve ducked the hard choices. Fowled the debate with doubts about whether climate change is really happening. Hawked their own bogus theories. Parroted the same old tired lines. Well, I am here to say their goose is cooked and it’s time to take a gander at reality. Because it’s our tern now. That’s T-E-R-N. And I hope you T-Birds will join me in helping climate solutions take flight.

In all seriousness, I applaud Thunderbird’s mission to “educate business leaders who create sustainable prosperity worldwide.” I also want to congratulate Thunderbird for receiving – for the 7th consecutive year – the prestigious designation as the #1-ranked school for International Business. The award highlights your school’s global mindset, an apt description for an institution that is preparing future business leaders to tackle the greatest of global challenges – climate change.

Because today, I believe, there is no greater threat to sustainability (or prosperity) than climate change. And I am not alone in this belief. Over the last decade, there has been a remarkable change in how people think about the climate issue, what they believe, and what they feel we should do. And nowhere has this transformation in opinion and outlook been more pronounced than in the global business community.

The introduction this fall of Thunderbird’s Carbon-Free Degree, fosters exactly the type of innovative ideas and concrete actions needed in this country, and around the world, to find climate solutions. Equipping yourselves with the knowledge and practical experience to succeed in a future low-carbon economy is critical. But what’s truly important is that Thunderbird graduates will now enter the business world as leaders who both understand and can implement sustainable solutions that firms need to gain competitive advantages in today’s global marketplace.

Today, I’d like to reflect a bit on why business opinion on the climate change issue has changed, and on why some of the strongest support for climate solutions now originates not in the halls of government or in non-governmental organization offices, but in corporate boardrooms around the world. I will talk about the history of business engagement (and disengagement) on this issue. And I will offer a couple of examples of major companies that are walking the talk when it comes to climate solutions.

The main idea I want to leave you with is that there has been a major shift in the global business community – from denial to acceptance and now to active engagement in public policy on the climate issue. And it is a shift that I believe bodes well for national and international action to protect the climate in the months and years ahead.

But before I get to all that, it’s important to reflect on why there has been this shift, why the business community (or segments of it) is now responding seriously to climate change when simply talking in a rational way about this issue in private-sector circles was viewed as heresy just a few years back.

The biggest influence has been a need for certainty about how markets are going to change, sparked by a growing patchwork of state by state and country by country climate policies, and a sense that aggressive federal and global responses are inevitable. But the advancing science has been important for some companies too. Over the last decade, the case for a skeptical, wait-and-see approach to climate change has melted faster than summer sea ice in the Arctic. We now know from the science that this is a real and urgent problem, with a real cause – and that cause is human activity. The most recent report from the Intergovernmental Panel on Climate Change projected that global temperatures will increase between 3.2 and 7.2 degrees Fahrenheit by 2100. Sea levels will rise by as much as a foot to a foot-and-a-half. Many species will be lost. In addition, there is a 90-percent chance or greater that the world will see more hot extremes, heat waves and heavy precipitation events. And it is likely we will see more droughts as well.

But climate change isn’t solely a problem of the future; it is happening right now. I mentioned the Arctic sea ice. This summer, we saw it shrink to its smallest recorded extent ever. According to the National Sea Ice Data Center, at the height of the melting, sea ice declined at a rate of 81,000 square miles per day. That’s the equivalent of losing an area the size of Kansas – in a day. Researchers say this rate of loss was unprecedented in the satellite record. Of course, the sea ice will come back as winter temperatures return, but even the wintertime ice has been in decline – with 2007 and 2006 marking the lowest winter ice extent ever.

Clearly, we have a very serious problem on our hands. Left unabated, climate change will have tremendous negative consequences for our country and our world.
But the science also tells us something else. … It tells us there is no longer any doubt about what is causing this problem: greenhouse gas emissions from human sources—and, more specifically, from three key sectors: electricity; transportation, primarily automobiles; and buildings. Consider this: China is building a new coal-fired power plant every week to 10 days. And it’s not just China and other developing countries. As of 2006, U.S. emissions were up nearly 18 percent compared to 1990.

As a result of all these emissions, the level of greenhouse gases in our atmosphere is growing. Advance details from the latest IPCC synthesis report tell us we are at 450 parts per million of CO2-equivalent greenhouse gases in the atmosphere, if we discount the shading effect of aerosols. And the reason why this number (450 parts per million) is significant is that we have reached this level more than a decade earlier than we thought just a short time ago. What’s more, scientists tell us that in order to avoid the worst consequences of climate change, we must stabilize atmospheric concentrations of greenhouse gases at a level of roughly – you guessed it – 450 parts per million. Obviously, this is a mammoth task that will require bold actions, actions that must begin now and continue for decades to come.

So this is what the science says: It says that the climate is changing, that these changes will accelerate in the years ahead, and that human activity is the major cause. Is anybody listening to the science? Fortunately, the answer is yes. As I said before, some of the most attentive listeners are in the global business community. And I want to use the remainder of my remarks to provide an overview of how business has responded to this issue, and what kind of response we can expect to see moving forward.

I want to start by reflecting back on the late 1980s and early 1990s. As you may recall, this was a time when most major U.S. companies responded to climate change in the vein of Alfred E. Neuman: “What … me worry?” But they didn’t stop there, with a simple shrug of their collective shoulders. No. In many cases, business actively sought to confuse the debate by disputing the basic science behind global warming.

They did this because they saw the writing on the wall; they saw what was happening globally on this issue. They saw how the world had united around the goals of the United Nations Framework Convention on Climate Change in 1992. The UNFCCC, as it is known, set an ambitious long-term objective: to stabilize greenhouse gas concentrations in the atmosphere at a level that would – and I quote – “prevent dangerous anthropogenic interference with the climate system.” This is a goal that the United States, and virtually every other nation, embraced.

Businesses also saw how the world came together five years after the signing of the UNFCCC in an effort to try and give that agreement some teeth. This is what happened in Kyoto, Japan, in 1997, when the United States and other countries signed the Kyoto Protocol, with its mandatory emission targets for developed countries. Well, whatever you think of Kyoto, this agreement just didn’t sit well with many segments of the global business community. And so they set out to undermine the agreement – in part, by attempting to undermine the science behind it.

The prevailing sentiment on this issue in global business circles was embodied in the work of an organization called the Global Climate Coalition (GCC). This is a group that held sway in the U.S. during the 1990s, and it had one of those classic Washington names that make you think they’re on the side of reasonable solutions … when, the fact is, their major objective is to muddy the issue just enough to stop any solution they don’t like.

Well, the Global Climate Coalition was quite good at this for a time, and it recruited some major players to try and demonize Kyoto and torpedo the scientific case for action – including Exxon, Ford, Royal Dutch Shell, Texaco, BP, General Motors, and Daimler Chrysler. But over time, many of these companies left the coalition and began distancing themselves from GCC’s views. The GCC suffered major membership losses in 2001, and simply went out of business. In the end, the GCC fell victim to changing views in the corporate community about climate change and the need for action on greenhouse gas emissions. I saw this change firsthand when we formed the Pew Center on Global Climate Change in 1998.

One of our priorities from the start was to recruit major companies to serve as founding members of our Business Environmental Leadership Council . Thirteen companies joined in the beginning, including such industry stalwarts as American Electric Power, Boeing and Toyota. And all of these companies agreed to a set of principles that basically said this: we know enough about the science of climate change to justify taking action now.
Now remember: this was happening just months after the Kyoto Protocol was negotiated, at a time when most major businesses still viewed climate change with either indifference or hostility, one where serious action, if it came at all, was decades away. And yet a small group of business leaders joined with us at the Pew Center to say the time was right to do something, and that international action was needed. And the formation of our Council in 1998, along with other actions and statements around that time emanating from the corporate sector, marked the moment when the first wave of business leaders finally moved from denial of climate change to acceptance that this was a real problem and that solutions were needed.

Today, almost 10 years later, the Pew Center’s Business Environmental Leadership Council consists of 45 companies representing approximately $2.8 trillion in market capitalization and over 3.8 million employees. It is the largest U.S.-based association of companies committed to climate change policy and business solutions. Membership spans a range of sectors including high technology, diversified manufacturing, oil and gas, transportation, electric and gas utilities, chemicals, healthcare, insurance, and financial services.

The growth of our Council over the last decade is a reflection of the growing acceptance among business leaders that climate change is a real problem. It is also a reflection of business leaders’ understanding that serious government action to address this issue at all levels is inevitable; it is only a matter of time.

Consider what businesses say about the likelihood of U.S. government action. Ninety percent of the companies we polled in 2006 said they believed climate regulations were imminent in the U.S. Of those, 67 percent believed regulations would take effect between 2010 and 2015; 17 percent expected this before 2010. And I should note that this survey was taken before the 2006 elections, when Democrats took control of both the House and Senate with new promises of swift action on this issue.

Globally, the feeling is the same ... business understands that this train is rolling down the tracks and can’t be stopped. And, in fact, companies operating in Europe and elsewhere already live under climate regulations.

Even in China, we see significant progress. That country’s leaders have established a domestic target of a 20-percent reduction in energy intensity by 2010. China also has aggressively developed its renewable energy sector. It has established a goal to raise the proportion of renewable energy in the primary energy supply to 16 percent by 2020, up from 7 percent today.

Businesses are not hunkering in a cave somewhere. They see governments around the world taking action on this issue—or, at least, talking about taking action in a serious way. And, part of the motivation among the companies that have been out front on the climate issue is to help shape the actions that the world’s governments ultimately take. They want a seat at the table when international and national leaders talk about policy solutions to the climate problem.

And there is something else they want … they also want what we call “regulatory certainty”—in other words, they believe it’s inevitable that governments are going to act in a more decisive way on this issue… but like everyone else, business leaders don’t know exactly how governments will act. And not knowing what’s on the horizon is not good for business. Think about those companies in the electric power sector that have to make significant up-front outlays for new plants and equipment that government actions could render obsolete in one fell swoop. Or, think about businesses that are primed to innovate and to invest in new, low-carbon energy technologies and products. … Figuring out the potential return on those investments just isn’t possible right now, in the absence of a clearer sense of the policy environment five, ten or twenty years out.

Of course, there are other motivating factors for business to get involved in this issue, including mounting concerns about a patchwork of sub-national regulations. 17 states in the United States, for example, already have emission reduction targets, including California, Florida, Maryland, Massachusetts and Arizona. In the same way that business leaders don’t like uncertainty about what the global and national rules will be, they also don’t like having to live by a lot of different rules in different places.

And then there is the main motivating factor that drives business decisions: profits. Many businesses very plainly see climate change and the drive to respond to it as a business opportunity – at least by managing risks better than competitors, and ideally by building growth platforms around low-carbon products and services. And they want to ensure that national and international policies are aligned with their own objectives for making the most of emerging global markets for climate-friendly technology. Let me offer three examples:

• First, Caterpillar is the largest supplier of machinery to the mining industry. They have a strong interest in maintaining long-term spending on equipment. Thus, they have a strong interest in developing climate solutions that include support for clean coal with carbon capture and sequestration. In the absence of rapid progress on this, some of their mining customers might run into financial difficulty if power companies switch to gas, nuclear, and renewables. In some cases, companies like Caterpillar actually are able to take a longer-term view than their clients.

• Second, there is GE. GE has built an entire line of products called Ecomagination that focuses on developing solutions to the world’s environmental problems, including climate change. Its products include wind turbines, more energy-efficient appliances, and clean coal technologies. Ecomagination has been extremely successful, reporting revenues last year of $12 billion, putting the company on track to exceed its sales target of $20 billion by 2010.

• And, last but not least, I want to mention Alcoa. Alcoa is one of the world’s leading aluminum manufacturers. And this company believes federal policies to reduce emissions will lead to higher demand for their products, particularly in the automotive and aircraft sectors. The thinking is that GHG policies will drive carmakers to use more lightweight aluminum in producing cars and planes. Reducing a vehicle’s weight by 10 percent typically yields a seven-percent reduction in GHG emissions.

Again, these are real opportunities for real profits in a world where carbon constraints become the norm. And, of course, none of this has escaped the notice of investors around the world. Wall Street in recent years has exhibited a growing interest in and affection for those companies, industries and sectors that stand to benefit in a world that finally gets serious about constraining carbon. This may sound odd at a time when oil company stocks are at record highs, but it’s true: there has been a gradual awakening to the climate issue on Wall Street. And I want to highlight the six stages to the financial community’s awakening on this issue:

First, the emergence of shareholder activism as a tool for influencing corporate behavior. Sister Patricia Daly, from the order of the Sisters of St. Dominic of Caldwell, New Jersey was an early pioneer in this, as was the Christian Brothers Investment Services, and the Interfaith Center on Corporate Responsibility. Their big idea: to use the power of stock ownership as a way to get companies to pay more attention to their impact on the climate.

The environmental group Friends of the Earth, got into the act in 1990. As part of its climate change shareholder campaign, it filed a resolution with ExxonMobil, calling on the company to reduce carbon dioxide emissions from its energy production plants and facilities. Niagara Mohawk Power was the target of a 1994 church-sponsored resolution demanding that it prepare a report describing plans or actions to reduce GHG emissions. That one received support from 19.4 percent of the shares voted, one of the highest votes ever on a social issues proposal.

Since then, there has been steady growth in both the number of, and support for, shareholder resolutions. More than 150 climate change resolutions have been filed in the last five years alone. Over the past two years, climate change has emerged as the leading focus of non-financial shareholder resolutions.

While the content of these resolutions varies, most share a common set of goals: public reporting of GHG emissions and disclosure of climate-related risks and opportunities; voluntary goals and timetables to achieve absolute reductions in GHG emissions; and support for government programs that set mandatory limits on GHG emissions to bolster strategic planning and investor certainty.

And, it’s important to note that while these shareholder resolutions almost never pass, they have been very important in influencing corporate behavior. For example, after the Connecticut state treasurer’s office filed three consecutive climate resolutions (all unsuccessful), American Electric Power agreed to conduct an analysis of pending climate legislation and its impacts on the company’s bottom line. This analysis became the basis for AEP’s plans to invest up to $1.6 billion in a next-generation coal plant that emits substantially less CO2 than conventional coal plants and is designed for carbon capture and storage.

The second stage was the rise of eco-funds and environmental indices. Not too long ago, this was a tiny and not very influential corner of the capital markets. But in 2005, so-called socially responsible investment (or SRI) funds had approximately $2.29 trillion in assets under management worldwide. One of the largest SRI firms, Calvert, manages more than $16 billion in assets. And, there are also numerous funds focusing specifically on companies providing environmental solutions. An example is the Winslow Green Growth Fund.

The surge in investor appetite for environmentally friendly investment funds is leading investment banks to create special indices and structured products related to the industry. There are now at least a half-dozen indices tracking the clean-energy sector in North America alone, and several more in Europe.

Examples include the Dow Jones Sustainability Index, the ABN Amro Climate Change & Environment Index; Standard & Poor’s clean-energy index; and HSBC Holdings PLC’s Global Climate Change Benchmark Index. And that’s just a few.

The third phase in the financial community’s awakening was the engagement of public pension funds on this issue. These funds control huge pots of money, and they are showing an increasing willingness to consider climate change as an investment criterion.. How are they getting involved? By engaging directly with companies; by voting proxies against management; and by sponsoring shareholder resolutions themselves.

One of the major players in this arena is the California Public Employees Retirement System (or CALPERS). CALPERS has a total market value of approximately $250 billion. And now it has set up a $200 million Environmental Technology Program Board that targets investments in environmental technology solutions that are more efficient and less polluting than existing technologies. CALPERS also has $500 million earmarked for investment in stock portfolios that use environmental screens.

The fourth phase was the growth of cleantech venture capital flows. As all of these other developments have been unfolding, there have also been steady increases in venture capital and private equity flowing into clean technology companies, with particularly dramatic growth occurring in just the last three years. Cleantech encompasses a number of different sectors, from agriculture and air quality to recycling, water purification and management, and energy technology. And, today, this segment of the business world is one of the top venture capital draws, behind only software, biotechnology, and telecommunications.

What’s more, in the world of cleantech investing, energy technology has received by far the greatest levels of investment over the years. In 2005, the energy technology area was the beneficiary of about 44 percent of total U.S. cleantech investing ($590 million out of a total of $1.34 billion).

Which brings me to the fifth phase, the involvement of the major commercial and investment banking giants. One way this happened was through something called the Carbon Disclosure Project (or CDP).

CDP is a coordinating body for institutional investors. Each year, it sends out a questionnaire seeking information from companies about the business risks and opportunities presented by climate change. The success of CDP has grown every year in virtually every metric. This year, 315 institutional investors participated with $41 trillion in assets under management. The questionnaire went to 2,400 companies – and the response rate was a very respectable 77 percent.

CDP signatories include major mutual funds, and major banks and financial houses, such as State Street, Barclays, AXA, Northern Trust Corporation, UBS, and Morgan Stanley. Those six signatories alone account for about 10 percent of the holdings of GE, 11.7 percent of Apple, almost 12 percent of DuPont, and 12.2 percent of Duke Energy -- making climate every bit a C-level issue for these companies.

These major financial houses also are becoming directly involved in financing climate solutions. For example, Goldman Sachs since 2005 has invested about $1.5 billion in alternative energy and clean technology businesses; and Morgan Stanley this year bought a stake in MGM International, another company that invests in emissions reduction projects. Bank of America and Citi are among the other major banks that have unveiled major, multibillion-dollar cleantech and climate initiatives. And, several of these banks are backing up their investments with calls for federal action on the climate issue, citing the need for regulatory certainty, as well as the economic and ecological impacts of climate change.

Which brings me to the sixth and final phase in the world of finance: the effort to correlate environmental performance with financial performance. There is significant work under way right now to figure out whether companies that perform well on the environment in general, and perhaps specifically with regard to climate change and related market changes, indeed outperform their peers in the market.

If that analysis becomes widely supported by leading lights in Wall Street and in other financial centers, I expect many more companies to engage meaningfully on the climate issue. Some of the best firms already are noticing early evidence. A year ago, for example, Abby Joseph Cohen, chief U.S. investment strategist for Goldman Sachs, spoke at one of our BELC meetings. She said that while they weren’t ready to publish it, the firm’s analysis suggests that top performers in the environmental category achieved as much as a 5-7 percent share price premium over competitors.

Now, there are several hypotheses about why a company with a better environmental record is likely to outperform competitors financially. And my hunch, which I am sure would find support here at Thunderbird, is that exceptional performance related to the environment correlates highly with other management strengths. Those who are alert enough to perceive and understand looming climate risks and opportunities may simply be better than their peers in dealing with the many other long-term and uncertain market factors that all companies face.

Six phases. Six developments in the world of finance that are helping to drive business interest in and action on the climate issue. But there is still the question: once they are interested, what can businesses do?

That’s a question we tried to answer in the 2006 Pew Center report, “Getting Ahead of the Curve: Corporate Strategies That Address Climate Change.” The report compiles the experiences and best practices of large corporations that have developed and implemented strategies to address climate change, and it is available on our website.

I’ll now walk you briefly through the steps that a couple of leading companies profiled in our report took to establish their corporate strategies.

First, Duke Energy. As a major provider of electric power, Duke Energy is convinced that carbon constraints are inevitable and is taking action in a couple of ways: it is reducing its own emissions and it is actively engaging in the policy debate on this issue.

Duke’s involvement in climate policy dates back to when its chairman, Jim Rogers, was the CEO of Cinergy, the company that merged with Duke in 2006. Cinergy first studied ways to lower emissions in the early 1990s and adopted a voluntary goal to reduce annual emissions to 5 percent below 2000 levels for the years 2010 through 2012.

The company’s decision to more aggressively embrace climate change was made possible by three converging forces: an internal management push, pull from external stakeholders, and technological developments that would allow the company to move forward in a carbon-constrained world.

In order to meet its goals for reducing emissions, Duke plans to rely mainly on power plant efficiency projects, many of which actually return value to the company in the form of fuel savings and generation of pollution allowances for sulfur and nitrogen oxide reductions. Looking long-term, Duke is examining the potential of larger scale renewable energy sources in its service area, including wind, solar and biogas/biomass. Duke also is interested in pursuing carbon capture technologies for coal generation, and continues to view nuclear power as a potential option

Duke’s involvement in the climate issue is a reflection of a fact of life facing the electric utility industry. This industry needs short-term regulatory and market clarity in order to properly value its investments. Duke and other companies are making decisions about investments in generating capacity that have an expected life of 40 or 50 years. As I said before, they need to know what’s on the horizon in terms of the rules and regulations governing their business. Uncertainty is not cool.

My second example is DuPont. Perhaps more than any other major company, DuPont is shifting its focus on climate change from an emphasis on risk management to business opportunity. This is a company, you may recall, that rapidly responded to early scientific information implicating chlorofluorocarbons (CFCs) in the depletion of the earth’s ozone layer. After the Montreal Protocol, an international treaty to protect the ozone layer, was signed in 1988, DuPont announced a voluntary CFC phase-out. Shortly thereafter, it began producing safer alternatives and today is a leading manufacturer of those substitutes.

Well, DuPont has applied the same, forward-thinking mindset to climate change. Around the same time that it began producing CFC alternatives, DuPont began tracking its GHG emissions. Three years later, DuPont publicly announced a target to reduce emissions by 40 percent below 1990 levels by 2000. When DuPont realized its initial 40-percent goal would be readily met through changes in industrial processes, it adopted a new set of targets. The company committed to hold energy use flat at 1990 levels; to source 10 percent of its energy from renewable resources; and to reduce GHG emissions to 65 percent below 1990 levels, all by 2010.

DuPont has now moved into what CEO Chad Holliday calls a “third phase of sustainable growth.” In this phase, sustainability will be fully integrated into DuPont’s business models, and will become the market-driven business priority throughout the value chain.

DuPont also has launched a joint initiative with BP to develop biobutanol. Biobutanol is a renewable transportation fuel that can be made from all the same plant sources as ethanol. Biobutanol, however, has significant potential advantages over ethanol, including higher energy content (meaning you can get more miles per gallon out of it), higher blendability (meaning you can mix it in higher concentrations with gasoline), and better supply and distribution dynamics (meaning you can ship it through the existing oil and gas pipeline, as opposed to ethanol which has to be shipped by more expensive rail or barge).

I mention biobutanol because this is an initiative that attempts to achieve the hardest, but also the most rewarding, goal in climate change corporate strategy-making: implementing a game-changing strategy that allows a company to leap far ahead of competitors by creating or reshaping key markets they can dominate. The creative collaboration between BP and DuPont on biobutanol, I believe, illustrates the types of ventures we’ll see more of as more companies seriously explore climate change-related market opportunities.

And it is important to note that the biobutanol strategy adopted by these companies includes a clear policy component, as both companies are relying on their vast knowledge of energy and environmental regulations to make the strategy work.

Engagement in public policy. As I said before, it is one of the key corporate strategies with respect to climate change. And it is where we have seen a pronounced shift in business activity on this issue. Don’t just take it from me. When we surveyed Fortune 500 companies on how they ranked activities related to climate change according to most profitable, government affairs and lobbying ranked fourth. And that surprised even those of us who operate largely inside the Washington beltway.

Both Duke Energy and DuPont have been very visible players in the climate policy debate. And both of these companies are part of the U.S. Climate Action Partnership, which has taken business engagement on this issue to a new level in the United States. USCAP, as it is known, is a coalition of 27 major corporations and six NGOs, including the Pew Center. And it is calling on Congress to enact mandatory domestic climate policies at the earliest possible date. The founding membership of USCAP was drawn mainly from the Pew Center’s Business Environmental Leadership Council.

USCAP believes Congress should pass legislation that sets firm short and medium-term binding emissions targets in the United States, on a trajectory to reduce emissions by 60 to 80 percent by 2050. In the view of the USCAP partners, a cap-and-trade system should be the cornerstone of U.S. climate policy, but they also advocate additional policies in the initial phase for specific sectors, such as coal-based energy, buildings, and transportation in order to help advance new technologies.

The corporations involved with USCAP recognize that policy engagement is an integral part of business strategy, right up there with marketing and product development. And it’s not just in the United States where business is engaged in shaping public policy. The Canadian Council of Chief Executives, for example, issued a formal declaration in October encouraging Canada to be a global leader in supporting global emission cuts. The more successful businesses are in reducing energy use and related costs, the more profitable they’ll be, the Council president said.

So the case for business engagement on the climate issue does not rest solely on altruistic grounds. There are clear strategic drivers, investment drivers and profit drivers that have prompted Duke Energy, DuPont and others to become a force for change on this issue – and to shift over time from denial of the problem to acceptance and now to leadership in the policy debate.

Responding to climate change, in other words, is not about sticking it to industry and business. That’s the old way of thinking. It’s so 1980s and 1990s. Today, we know that responding to this challenge is a core business issue. It’s about managing risks and opportunities; developing and entering new markets; positioning businesses and industries for the future. It’s about achieving the Thunderbird credo of “sustainable prosperity.” And any business that is not working right now to make sure that it can prosper in a carbon-constrained world is behind the times.

In the years and decades to come, climate change will have enormous implications not just for business but for all of society. And I hope that all of you, as future business leaders, will help make sure that we are doing everything in our power to respond to this issue in ways that make both dollars – and sense.

Thank you very much.