Cong. Don Beyer, Anne Kelly (HKS 1996), Elizabeth Lewis (MBA 2006), Sarah Wright (MBA 1997), Prof. Michael Toffel, and Matt Sonnesyn (HKS 2002).

Fifty years ago, the Clean Air Act passed the United States Congress with overwhelming bipartisan support; in the Senate, the vote was unanimous. The Clean Air Act was one of the first and most influential federal environmental laws—and many in the business community saw benefits from a national strategy to combat pollution.

Prof. Michael Toffel

Prof. Michael Toffel

Now, as the world faces the challenges of climate change, business has the opportunity to drive innovative environmental policy, Professor Michael W. Toffel told an audience of HBS and Harvard Kennedy School (HKS) alumni at the University Club of Washington DC, on February 12, 2020. “The traditional approach firms use to address sustainability and climate change has been looking inward at their operations, and then to their supply chain,” Toffel said. “But another key lever is public policy. What are we doing to foster—or undermine—climate policy?”

Approximately 100 people gathered for the discussion entitled “The Business and Climate Policy: Your Vital Role,” which was organized by the HBS Business & Environment Initiative and the HBS Club of Washington, DC. The expert panel featured voices from the energy, environmental, and governmental sectors; attendees from fields as diverse as education, health care, and investing weighed in on the pressing issue.

Sarah Wright (MBA 1997) and the panel

On the panel, Sarah Wright (MBA 1997), founder and managing partner of Hull Street Energy, made a strong business case for national environmental laws to address climate change, including in the electricity sector. “There is a vacuum of policy at the federal level,” she said. “You are seeing meaningful renewable programs in most states, and that’s both good news and bad news.” Using the example of her own company, a private equity firm investing in the energy sector, she explained the challenges of working within 50 different regulatory and incentive structures. “A federal policy would really be helpful to create a uniform landscape for the capital markets and the technologies to respond to.”

Matt Sonnesyn (HKS 2002) and VP of infrastructure, energy and environment at the Business Roundtable—which represents CEOs of leading US companies—has seen some energy sector leaders engaging on the idea of a national-level response to climate change for years, but remarked that interest has notably increased among its members. “We’re now seeing [interest from] folks from the insurance sector, from banks, from light manufacturing as well as heavy manufacturing, the tech companies,” he said. “The number of CEOs who want to be at the table for the conversation has grown. It’s because the stakeholders that matter to them are all saying to them ‘What are you doing about this?’”

Anne Kelly (HKS 1996), VP of Government Relations at Ceres and the leader of the Business for Innovative Climate and Energy Policy (BICEP), a coalition of companies committed to advocating for meaningful climate and energy policy at the federal and state levels, offered one such “good news story.” The nonprofit, which provides science-based research to help companies respond to sustainability risks and opportunities, has heard from a major technology company that they are considering the availability of renewable energy resources in site selection. “It has moved from being tenth on the list of siting criteria to being about third,” she said. “That’s an important trend.”

That’s the type of widespread and growing interest in climate change mitigation that Congressman Donald S. Beyer of Virginia has been hoping to see. The co-chair of the New Democrat Coalition’s Climate Change Task Force, Beyer has made the environment the centerpiece of his work in the House. He listed numerous bills-in-progress which would address important, but incremental, changes, such as methane waste prevention in fracking. “But the most important policy thing we can do is to price carbon,” he said, which would reduce carbon production and encourage technological innovation.

Elizabeth Lewis (MBA 2006)

Elizabeth Lewis (MBA 2006)

When moderator Toffel asked the other panelists for their policy wish lists, many echoed the congressman, even as they debated the nomenclature (would it be called a “tax” or a “fee”?), structure (would it fund infrastructure? would it be rebated?), and impact (how much sticker shock would carbon prices trigger?). Elizabeth Lewis (MBA 2006), engagement officer for climate and impact investing at the International Finance Corporation, also responded that government policies needed to require more transparency and accountability. “The government can help us by requiring companies to disclose information around their carbon emissions—and also around other efficiency factors such as water,” she said. “As consumers and as shareholders of companies, we deserve more information.”

Those in attendance quizzed panelists about how they could help mitigate climate change, be it through charitable or political donations, activism, or everyday business operations. “By asking the question, when we’re making any decision, ‘Have we considered the impact of climate change?’” Sonnesyn responded. That awareness has become essential in both business and politics, he said. “I think we will all look back at 2020 as inflection point on this issue.”

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