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We are managing the planet as if it were a business in liquidation,” former U.S. Vice President Al Gore declared to a capacity audience of 900 MBA students during a talk titled “A Change in Business Climate” presented in Burden Auditorium in December. Gore explained that the population explosion, coupled with the revolutions in science and technology, have greatly magnified the impact of humans on the earth’s ecosystem. “But the biggest challenge we face,” he said, “is changing the way we think about our relationship with the environment.”

Business, Gore asserted, must conduct itself with a greater appreciation for the long-term consequences of present actions, with “externalities,” such as air, water, and trees, appearing as items on balance sheets. If price tags are the only tool used to measure value, said Gore, “then things that don’t have price tags appear to have no value.” In his talk, sponsored by the School’s Leadership and Values Initiative, Gore stated that in an ideal world, employment-based taxes would be replaced by levies on pollution, which is by definition an indicator of waste and inefficiency. Gore, who has long argued that carbon dioxide emissions contribute to global warming, said that solving the environmental crisis represents “the greatest source of new business opportunity in the world.” He recounted how business and governments worldwide had worked together to resolve the ozone-depletion problem by tightening regulations and by eliminating the use of CFCs through improved and cost-saving industrial processes. Indeed, companies that are not responsive to environmental problems and concerns will see their business suffer, as American car manufacturers have, Gore noted.

In attacking the climate crisis, Gore concluded, the rest of the world will follow if America provides leadership. “This is the only crisis that has threatened the end of human civilization,” he said, “and we are moving in the opposite direction.”

Gore and David Blood (MBA ’85) are founding partners of Generation Investment Management, a firm that makes long-term investments in companies adhering to sustainability principles. Earlier in the day, the pair visited Professor Forest Reinhardt’s Business and the Environment course to discuss their activities.

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