What role can businesses play in climate action? Can the private sector be a part of the solution despite contributing to the problem? 

These were just a few of the questions put to two Harvard Kennedy School experts, Jane Nelson, director of the Corporate Responsibility Initiative, and David Wood, adjunct lecturer in public policy and the director of the Initiative for Responsible Investment, at a student-led event last month, shortly after the conclusion of the COP26 international climate summit in Glasgow.

“Reimagining Business Amid the Climate Crisis: The Road Ahead After COP26” kicked off the first in what will be a series of discussions hosted by the Sustainability Leadership Council (SLC), a body of students, staff, and faculty who make sustainability recommendations to the Kennedy School.

Kennedy School students Nandita Nair MPP 2022 and Svenja Kirsch MPP 2022 led the conversation, which they had organized along with other SLC members. For Nair and Kirsch, the topic was professionally and personally meaningful. Kirsch, from Germany, had worked in corporate sustainability management in the automotive industry before coming the Kennedy School and is dedicating her career to sustainability in the private sector. Nair sees climate action as an existential issue. “I come from the Seychelles, a very small island in the middle of the Indian Ocean, where I’ve seen the effects of the climate crisis firsthand,” she said. “In the last 20 years, over 95% of the Seychelles’ coral reef ecosystem has disappeared as a result of rising sea surface temperatures.”

Jane Nelson headshot.

“I think one of the key challenges we have at the heart of the climate agenda is climate justice and the fact that poverty is a core element of the climate debate and not separate from it.”

Jane Nelson

The discussion ranged from the need to reimagine the private sector in the face of the climate crisis to what must be done so that corporate pledges and corporate action on climate change align.

Nelson, who also is a non-resident senior fellow with the Global Economy and Development Program at the Brookings Institution and a 30-year veteran in the field of sustainable development, explained that many aspects of business must be reinvented if we are to tackle the environmental crisis in a way that is fair and just.

“I think one of the key challenges we have at the heart of the climate agenda is climate justice and the fact that poverty is a core element of the climate debate and not separate from it,” Nelson said. “There’s an enormous responsibility as well as opportunity for both governments and companies to be looking at the new technologies, products, services, and business models that are helping people meet their basic needs but doing so in a way which is decoupled from increasing carbon emissions and other negative externalities.”

Wood, whose current projects include working with pension fund trustees on responsible investment policies and studying the relationship between public policy and impact investments, explained that “the climate crisis requires a different way for investors to look at the world.” He has seen more interest in the last few years in socially responsible investment—a form of “collaborative action” and engagement with the climate movement that is a “bright spot.”

Having recently returned from COP26, Nelson noted that one of the most positive takeaways from the summit, in terms of corporate responsibility, was an agreement to establish an international sustainability standards board. While she acknowledged that implementation of this standard may take some time, Nelson is hopeful that it will eventually ratchet up to become “a key part of mandatory disclosure on the part of companies.” She emphasized the need for an international standard to hold businesses to account for their environmental and social impacts. 

David Wood headshot.

“The climate crisis requires a different way for investors to look at the world.”

David Wood

Wood agreed: “We need accountability mechanisms.” There can sometimes be a disconnect, Wood said, between corporate pledges—which may tout social responsibility—and corporate lobbying. Better disclosure, Wood and Nelson argued, can help align pledges with action so that they are not mere lip service.

Despite the challenges ahead, both Wood and Nelson were optimistic about a greater commitment to sustainability goals in the private sector and investment community. More businesses were represented at COP26 than in past years, and Nelson said she hears “more business voices around the advocacy agenda.” There were “a lot of commitments,” she said. “The challenge is to see how they get implemented in practice.” In the investment community, too, Wood has seen a shift in the last decade: While there is a lot to work out, “there is a glimmer of hope.” 

The SLC plans to hold more climate conversations. Bill Clark, the Harvey Brooks Research Professor of International Science, Public Policy and Human Development, introduced the series as a “forum in which the Kennedy School and Harvard community can come together to explore pressing sustainability-related concepts and how those can be applied to shape meaningful action in the world.” Emily Flynn Pesquera, the senior sustainability manager for the Kennedy School, played a key role in organizing the event.

Banner image by Christoph Soeder/picture-alliance/dpa/AP Images

Get smart & reliable public policy insights right in your inbox.