Economic growth demands a stable climate. So, what happens when that stability starts to erode? What becomes of our economy when it is too hot to go outside for six months of the year? Or, when the coastal cities of the world are no longer inhabitable? What does this mean for business?

Climate change is a systemic risk to the global economy.

However, it is a collective risk and, if we take collective action across industries and around the world, we can mitigate the worst effects of climate change. However, we must act quickly.

In this episode, Host Gautam Mukunda speaks with Rebecca Henderson, one of 25 University Professors at Harvard and the author of Reimagining Capitalism in a World on Fire, and Spencer Glendon, an economist and senior fellow at Woodwell Climate Research Center, about saving the planet, the future of capitalism, advocating for good regulation and better government, and the idea of investing in the future without financial return.

“If we decided we wanted to address climate change we couldn’t fix it, but we could absolutely ameliorate the worst effects before it’s too late. It’s not a technical problem. The problem is political will. The problem is persuading people that this is real, that it’s going to happen, [and] that it’s going to have immediate effects. If we can do that, then I am quite sure that we can address it.”

— Rebecca Henderson

“Climate change is a systemic risk to the entire economy and the entire financial system. You cannot diversify away from it. The pursuit of alpha in the face of this kind of risk is bizarre if you have financial holdings of any size or grandchildren.”

— Rebecca Henderson

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Books Referenced:

Reimagining Capitalism in a World On Fire, by Rebecca Henderson

Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL, by Roger L. Martin

All We Can Save: Truth, Courage, and Solutions for the Climate Crisis, Edited by Ayana Elizabeth Johnson and Katharine K. Wilkinson

Radical Hope: Ethics in the Face of Cultural Devastation, by Jonathan Lear

Guest Info:

Rebecca Henderson is one of 25 University Professors at Harvard, a research fellow at the National Bureau of Economic Research, and a fellow of both the British Academy and of the American Academy of Arts and Sciences. Her research explores the degree to which the private sector can play a major role in building a more sustainable economy. Rebecca sits on the boards of Idexx Laboratories and of CERES. Her most recent publication is Reimagining Capitalism in a World on Fire, which was shortlisted for the FT/McKinsey 2020 Business Book of the Year Award.

Spencer Glendon is working to make the consequences of climate change more vivid, intuitive, and useful. Collaborating with scientists, designers, technologists, and other concerned generalists like him, he founded the forthcoming initiative, Probable Futures, which will soon make local and global projections of heat, drought, wildfire, and other variables available, for free, to anyone in the world. Spencer is a pro bono consultant to many institutions and is a Senior Fellow at the Woodwell Climate Research Center. He has worked in Michigan, Chicago, Germany, Russia, China, and Boston. For many years he conducted and directed research at Wellington Management. He holds a BS in Industrial Engineering and a Ph.D. in Economics.