Can corporations help build a better tomorrow?
Can corporations help build a better tomorrow?
Editor's note: If you're interested in this topic or want to learn more, check out the program for our upcoming VERGE Boston event on May 13-14.
Harvard Professor Rebecca Henderson wants to change the conversation.
For Henderson, it’s not enough that large corporations have adopted various sustainability measures. Businesses can’t just rest on their laurels. They must bring a deeper passion to the table if they expect to help find solutions to complex environmental problems, she argues.
Henderson’s work at the Harvard Business School focuses on this central issue -- how organizations can respond to large-scale technological shifts, such as energy and the environment.
Henderson will be a speaker at VERGE Boston 2013. GreenBiz spoke with her about the challenges in developing greater energy around corporate sustainability efforts.
GreenBiz: What are trends you see happening right now?
Rebecca Henderson: Our political system is having a great deal of difficulty dealing with many of the major problems facing our society on the environmental end and more businesses are wondering how they can help, how they can build business models that address these issues.
This is what Michael Porter is saying with shared values; this is what the social business people are saying. I think that what a lot of the clean tech entrepreneurs are doing is really stepping into the gap and saying, “How can I build a successful business model around these pressing human needs?”
GreenBiz: What are the roadblocks for companies trying to increase their sustainability efforts?
Henderson: The fact is, many of the environmental problems we face are due to the fact that we’re not pricing things properly. So, if there’s no charge for discharging CO2 and other greenhouse gas pollutions in the atmosphere, it looks as though it’s free even though it imposes a significant risk on everyone else.
As a result, business are going to have a harder time building business models around reducing emissions as long as it looks as if it’s free.
As long as water is not priced, as long as we’re not factoring in the cost of proliferating toxic pollution. The fact that we don’t have property rights on some of our most important natural resources in order to keep fish and wilderness. It’s going to be hard to build business models that do the right thing -- that build sustainable supply chains, that recycle their products, that have a long term view on sustainability. That’s just a hard thing to do.
GreenBiz: How good are some of the current initiatives from some of our larger companies? Is it too late to really make effect change around greenhouse gas emissions or finding solutions to issues around water, for example?
Henderson: I don’t think it’s too late. It’s never, never too late because the alternative is to just continue to emit these kind of quantities leads us to a world where the scientists tell us we run a very significant risk of major destabilization.
If we were to stop emitting CO2 tomorrow, which is almost impossible to stop, the effects of the amount we’ve already put up into the atmosphere are going to linger for many hundreds of years. So it’s not a question of if we act now we can put it all back to the way it was. But we can, I think, forestall a risk of much worse damage to the natural world that we and our children depend on.
It’s definitely not too late to act; it just becomes increasingly more urgent. In fact, I think some of the global multinationals see this first hand because they see the affects on the developing world where indeed, climate change is going to hit the hardest.
GreenBiz: So how do we create better business models? Where do we begin when it comes to that process?
Henderson: I think everyone begins where they are. One of the things in thinking about these problems is that it does give you enormous creativity in how you think about needs and what can be possible. It gives people greater engagement and helps in the ability to connect across the ecosystem.
So while I think that there are some (business) sectors that make it easier to focus on these issues than others, I think all creative businesspeople have an opportunity to make a difference on these issues.
What I’m going to be talking about at VERGE is that it’s critically important to develop viable business models, and that those of us in business who worry about these problems need to remain very much grounded in the realities of (corporations) making decent returns for investors.
It may also be very powerful to liberate, or let out in public some of our deep beliefs about how important it is to act now and that simultaneously embracing that tension between being successful, pragmatic people and being passionately driven people who care deeply about the moralistic issues at play here can be a very productive way of moving forward.