Welcome to Sustainability at Haas mini series, a podcast looking at how the UC Berkeley Haas School of Business is shaping the next generation of sustainable business leaders. In 5 episodes, we will share with you perspectives from the Dean, faculty, students, alumni, and staff about how UC Berkeley is developing sustainability in its core.
For our first episode, we have two very special guests: Haas School of Business Dean, Ann Harrison and the Executive Director of Sustainability at Haas, Michele de Nevers.
In this conversation, we will be learning about Haas’ vision for leading the effort to reshape how business schools think and teach about sustainability, climate change, and the exciting courses and offerings at Berkeley Haas.
Dean Ann Harrison on the MBA students:
32:49 – One other thing I really love about our MBA students, and I should say our Berkeley Haas MBA students, is that they solve problems in real-time that are important for the world.
That’s where our students get their energy. That’s why we need them. We need their courage to engage in these kinds of transformational changes that will save our planet. And the answers aren’t just going to come from the government, they’re not going to come just from the amazing research of our faculty. We’re all going to have to work together on this.
Sustainable values have been in business for centuries (Dean Harrison):
09:54 – If you look back 100, 150 years ago, in fact, business leaders were not following a shareholder maximization model. They were really following more a model of stakeholder capitalism. They contributed to their communities. They clearly saw beyond the bottom line. They understood that if you want to be successful over generations, then you need to think about the wellbeing of your community, your nation, your people, and your physical environment and natural capital. They thought about inclusion.
Where is sustainability needed most? (Michele)
34:18 – When students say to me, I want to work on sustainability, what should I do? I say everything. We do need new startups in renewable energy. We do need impact investments. But perhaps more importantly, we need our students to lead a transformation in existing legacy companies like oil and gas companies or consumer product companies or banks, and the financial sector or steel, cement, et cetera.
There are so many opportunities for our students to make a difference, and there is a reason for optimism. And I think our students are among those reasons.
- Dean Anne E. Harrison’s Faculty Profile at Haas School of Business
- Dean Anne E. Harrison on Linkedin
- Michele de Nevers on Linkedin
- Michele de Nevers on Twitter
(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)
Adriana: Welcome to Sustainability at Haas Mini Series, a podcast series looking at how the UC Berkeley Haas School of Business is shaping the next generation of sustainable business leaders. This miniseries will cover five episodes where we will share with you perspectives from the Dean, the faculty, students, alumni, and staff about how UC Berkeley is developing sustainability in its core. I’m Adriana Penuela, part of the Evening & Weekend MBA class of 2022.
Olivia: And I am Olivia Wasteneys, a second year in the full-time MBA class of 2022. In today’s episode, we have two very special guests, Dean Ann Harrison, Dean of the Haas School of Business, and Michele de Nevers, the Executive Director of Sustainability at Haas. In this conversation, we’ll be learning more about Haas’ vision for leading the effort to reshape how business schools think and teach about sustainability.
Welcome to the show. So, jumping in, Dean Harrison, when you became Dean of Berkeley Haas in 2019, you set a vision for Haas to prioritize sustainability alongside innovation and inclusion. Can you start by telling us more about why it’s important for you for Haas to lead in this area?
Ann: Sure, I’d be happy to. So, when I came to Haas, I asked myself, how can we really deliver on our promise to equip the next generation of leaders to be able to lead sustainably if we don’t actually provide the training and the skills necessary to do just that? And I really believe that businesses are leading right now, as I speak, on climate and sustainability. And since businesses are making so many strides towards a sustainable future, that means that, in the schools where we educate those future leaders, we need to be doing that, too. We need to provide that leadership.
One of the things that’s really clear to me is that the concept of what it means to be a sustainable leader isn’t just that somebody is hired to be the chief sustainability leader. We’re not just talking about a niche role here. We’re talking about training all individuals, all people who work in business as leaders to be able to lead sustainably regardless of where they work. So, if you’re an accounting firm, you need to plan for the effects of climate change on valuation. If you work in real estate, you need to think about climate change. If you work in the area of finance, you need to change your financial models to change your risk forecasts. And if you work as an investment portfolio manager, you need to change the portfolios you are offering to take into account the importance of clean investments. So, everybody—from marketing to consulting to real estate—everybody is going to have to change how they do business.
At Haas, we have what I call our ISI strategy. And ISI stands for innovation, sustainability, and inclusion. I think it’s important to realize that the “S” in “ISI” really interacts very powerfully with the two “I”s—with inclusion and innovation—because in order to create a more sustainable world, we will need to engage in tremendous amounts of innovation. Battery technology is not where it should be, for example. We need to create more meatless products in the future, along the lines of Impossible Foods or Beyond Foods.
And then in the area of inclusion, sustainability and inclusion are really intertwined in the sense that communities—both within the United States and globally—that are being the hardest hit by climate change are those that are the least equipped to deal with it.
Adriana: So, now, we’ll be transitioning to Michele. So, Michele, as an Executive Director of Sustainability at Haas, what are you seeing? What’s going on? What’s happening here at Haas?
Michele: Thank you, Adriana. When we talk about sustainability, it is an umbrella term that includes lots of things. And as Ann Harrison said, it needs to be embedded in all dimensions of business. But if we just think for a minute about climate change, our students are going to face tremendous challenges during the course of their careers. Earlier this month, as you know, the IPCC came out with its latest report that looks at what we need to do to stop climate change.
Now, the bad news is that, even though so many companies and so many governments have been making pledges to reduce their emissions to net zero by 2050, in fact, every year, annual emissions of greenhouse gases are still going up, not down.
We know from the 2018 IPCC report that just stabilizing emissions won’t be enough to keep us below the target of holding the increase in global average temperature to 1.5 degrees Celsius above pre-industrial levels. The IPCC says we need to cut emissions to net zero by 2050. But more importantly, we need to cut them in half by 2030. That is in eight years. And so far, we’re headed in the wrong direction. We’re not doing the right things that we need to do. So, a lot more needs to happen.
But the good news in the IPCC report is that a lot more can happen. The report says we already have the technologies we need. The costs of these technologies, especially renewable energy, are falling fast. So, it’s possible. We can reduce emissions at lower cost than we had assumed.
But climate change is not just about risk. While achieving the 1.5 degrees Celsius target will be difficult, it will also provide a massive opportunity. The low carbon transformation can lead to better quality jobs, health benefits from reductions in local air pollution and other benefits, especially for disadvantaged communities, and terrific investment opportunities. So, managing this transition to the low carbon, just economy will require significant innovations in management practices, in supply chains, in new products, and new technologies. And we need the leaders who will lead all of these processes and all of these transformations. So, we need to make sure that our students are aware of the climate and sustainability challenges they will face, but that they also see the opportunities and that they feel empowered and encouraged to go out and lead the charge to solving the problems we face.
Olivia: Dean Harrison, can you share a little bit about why Michele was brought on board?
Ann: So, it’s really clear from Michele’s answer to the previous question that she is a powerfully eloquent leader on the topic of sustainability. And that’s no accident. She has spent her career at the World Bank, then at the Center for Global Development, now here at Haas, and also teaching about climate change in Barcelona, addressing these issues.
And not just that, but it’s really important to have a leader who integrates, both within Haas, all the amazing things that we’re doing on this topic, but also serves as a point person for all the other units on campus that are really pushing the frontier on sustainability and climate.
And Michele, in her role, is raising the profile of everything that we’re doing. We have a wonderful expanded new website on sustainability, which she played a big role in creating. And she’s also playing a really critical role in helping us marshal the resources to scale up the sustainability and climate initiative at Haas. So, I just cannot be more thrilled. In a place like Berkeley, which is the largest top [public] university in the United States, you really need strong leadership to centralize and partner with the other parts of the campus.
Adriana: It is wonderful to have Michele here on board with us. So, a very great addition to the team. Let’s talk about your perspectives on the role of corporations and business leaders in addressing sustainability and climate change.
Ann: I really think that we are poised on the edge of a precipice at this time. What we’re seeing is an increasing number of extreme climate events, whether it’s tornadoes, floods, massive forest fires, earthquakes, tsunamis, you name it. Essentially, the world needs to change. And it needs to change quickly. And many CEOs have recognized this. And it’s time for business schools to also make a significant transition in shifting what we teach and how we teach through the prism of climate change and sustainability.
And it’s interesting because, over the last several decades, there has been a focus in teaching to the business community on short-term shareholder maximization. But that has changed. And what we’re now seeing is we’re now seeing that there is a consensus, whether it’s at Harvard Business School or whether it’s the former Dean of Columbia Business School. What we’re seeing is that people are rethinking that very narrow focus across all different perspectives and all different political backgrounds.
Now, you might think, wow, this is really just such a dramatic turnabout. But in fact, it’s not such a revolution, because if you look back 100 or 150 years ago, in fact, business leaders were not following a shareholder maximization model. They were really following more a model of stakeholder capitalism. They contributed to their communities. They clearly saw beyond the bottom line. They understood that, if you want to be successful over generations, then you need to think about the well being of your community, your nation, your people, and your physical environment and natural capital. They thought about inclusion. They thought about providing healthcare.
So, one of the first jobs I took when I left Berkeley, after my undergraduate years here, was to work for Kaiser as a healthcare economist. Well, Kaiser [Healthcare] was started by Henry J. Kaiser, the steel magnate, because he really cared about his employees. So, Henry J. Kaiser was really an example of someone who maximized stakeholder welfare, not just shareholder value. But over the decades, what happened is that, especially in the 1950s, management became more and more specialized and government took on more and more roles, and there was a division created between the responsibility of business and the responsibility of government, which became much more comprehensive. What we now know and what’s really critical is that government can’t do everything. In fact, in a number of cases, government has been stymied in taking any action at all.
Adriana: So, business is now on board, you’re saying. Or, do we need to convince the business space to get on board?
Ann: Well, I think it’s a delicate dance, really. There have been historically a number of industries which are quite pollution-intensive. They’re known as sort of dirty sectors. That includes areas like, for example, petroleum refining, cement—cement is a very pollution-intensive industry—pulp and paper industry. And 150 years ago, or even 100 years ago, or even 50 years ago, there were not a lot of regulations. And it became evident that government can play a really critical role in providing the impetus for companies to think about the negative externalities imposed by pollution. And government passed some very important legislation, and also created some very important regulatory bodies to address that.
But it really is a delicate dance because, at this point, what we really need is we actually need to change the game altogether. So, no matter how clean petroleum refining is, it’s not going to be as clean as solar energy or wind energy. And so, actually, businesses need to completely reformulate how energy is created, how it’s stored, how it’s used to fuel new versions of cars. And so, that innovation will come from the industrial sector. So, it’s really both—government and business play key roles. But at this point, I am putting all my faith in the power and the speed of our enlightened businesses to make a difference.
Olivia: I think that’s spot-on. We spend a lot of time in my classes at Haas talking about the importance of, not only public-private partnerships, but also, partnerships with the science and technology community. So, I think you really hit the nail on the head in alluding to the importance of interdisciplinary working together in collaboration. So, looking at Haas and even beyond, what are some examples of opportunities that you see for business schools to do a better job of preparing future leaders to tackle the climate and broader sustainability challenges that we face?
Ann: I think that one of the things that business schools do very well is they create a great classroom experience. And I think that there is a lot that we can teach future leaders in the classroom. For example, last semester, we offered a course on carbon footprinting. How do you measure your carbon footprint? And how do you go about making changes? That was a really practical, important course.
We also offer a number of courses on constructing ESG portfolios. So, this is a new massive area in finance. And students can actually work with real portfolios [in courses like the Haas Impact Fund or the Sustainable Investment Fund] and think about the actual construction and performance of portfolios that are constructed to maximize clean tech, social impact. So, that’s something that, clearly, business schools should and can do.
But there’s a lot more that business schools can do. For example, we can also—and we do—promote co-curricular activities. It’s one thing to learn something in the classroom, it’s another thing to actually drive change in the marketplace. And so, co-curricular activities, case competitions, opportunities to work with companies, that’s really important. One aspect of co-curricular activities that I’m so proud that we do at Haas is a program called Cleantech to Market, or C2M, as it’s known. What does Cleantech to Market do? It pairs inventors who have great new ideas, new clean technology, with business school students who can help them figure out how to scale and market these ideas. So, it’s that movement from theory to practice that’s so important and such a critical component of the business school experience. So, we’re really excited about that.
The third thing I just want to mention is Haas is embedded within the broader community of the University of California, Berkeley. Berkeley has so much to offer in the area of sustainability and climate change that goes beyond just the business school. Our College of Natural Resources, for example, is the foremost college for addressing things like management of forest, water conservation, and environmental economics.
And so, one of the things that I’m so proud that we’re doing is that we’re partnering with other really strong actors within the University of California, Berkeley. For example, College of Natural Resources, or CNR, is launching a new Master’s in Climate Solutions. And we’ll combine this with our Haas MBA, so students will be able to get both degrees in two and a half years.
We’ve already launched another great joint program with CNR at the undergraduate level. Undergraduates can now do a summer minor in sustainable entrepreneurship [Sustainable Business and Policy] where they combine courses at Haas on entrepreneurship with courses in sustainability taken in the College of Natural Resources. So, moving across different disciplines is something really cool. And at a school like Berkeley, which has so many strong colleges and departments, that’s something that I’m really excited that we’re doing here.
What Berkeley Haas will produce is these amazing graduates who can link the innovations and developments for which Berkeley is famous and the ability to implement in real time the most promising and equitable climate and sustainability solutions, which is incredibly exciting. So, they’re going to start their careers with an understanding of the importance and the responsibility for action on climate change. And they will have the ability to rapidly deploy optimized solutions.
Adriana: It is great to hear so many efforts and so many classes and so many examples of the action that is taking a lot of traction and love and acceptance from the student body. So, it is our pleasure to be part of the certificate in sustainable business and part of these classes. Now, though we hear about so many programs, Michele, when I get your take, what makes Berkeley Haas uniquely equipped to lead in the area of climate change and sustainability?
Michele: One of the things I’m most excited about is that Berkeley Haas, as a business school, has a really broad set of programs in the area of sustainability. Many of the other business schools are strong in one or another area, like energy or forests. But if you just look at the business school, we have an incredible breadth. We have what I like to think of as our five pillars of sustainability. Number one is, as Ann Harrison mentioned, the Energy Institute at Haas, which is the number one energy institute in the country. And they do a lot of research on managing energy and climate-related topics. They also offer the cool experiential learning course called Cleantech to Market that Ann Harrison was talking about.
Then if we turn to the Fisher Center for Real Estate & Urban Economics, they have embraced a focus on the sustainable-built environment. They have great programs where students can work with some local cities, like Oakland and Alameda, to help design low-carbon, dense, transit-oriented solutions and climate-resilient cities.
Another program that we have here is called the Sustainable Food Initiative. And that connects business school students with sustainable food efforts across the Berkeley campus, which is really terrific. They focus on how to grow, transport, and sell food to revolutionize the existing food system, which is a really important part of the climate solution.
Then, we have the Center for Responsible Business, which in addition to being the home for the sustainable food initiative, also works on human rights and labor. And they have a new focus on re-imagining capitalism, which looks at systems change in shareholder primacy, in democracy, in free markets, and corporate social responsibility.
Last but not least, in the area of finance, we have the Sustainable & Impact Finance initiative and the Center for Financial Reporting and Management. The Sustainable & Impact Finance initiative provides students the opportunities to work on the Sustainable Impact Fund, which is the first and largest student-managed socially responsible investment fund within a leading business school. Or they can take a class on the Haas Investment Fund, where students get to choose investments in early stage impact-oriented startups led by student venture partners. The Center for Financial Reporting and Management is looking closely at ESG accounting and climate disclosure and financial documents. And in fact, they are organizing a big conference in June of this year on ESG accounting. So, we really cover a wide breadth of areas of importance in sustainability.
Adriana: Now, I’m taking classes like the Haas Impact Fund, but it’s a fascinating experience to really learn, practice and drive innovation from anywhere in the world. So, thank you for the offerings. They are very greatly appreciated.
So, what about you, Ann, what do you think is important for Haas?
Ann: I think what’s exciting is that it’s a leading place for understanding business transformation, growth. We understand measuring performance and return. We’re experts on management and strategy. And we are able to partner with experts across campus who are the global experts on these areas—climate scientists and engineers.
So, I don’t think it’s surprising that Haas was cited as the number one business school for careers in clean tech. As you heard, we have a lot of really exciting ventures. We talked a little bit about the Cleantech to Market program. Michele talked about the Energy Institute and SAIF [Sustainable and Impact Finance]. Our Center for Responsible Business or CRB, which is run by Robert Strand, who is an expert on the Nordic countries. And that’s important because, in many ways, the Nordic countries have been global leaders in addressing climate change and creating more sustainable business practices.
Another area is our Fisher Center for Real Estate & Urban economics, which is really focusing on, how do you change the way you create the future-built environment? How shall we incorporate sustainability into capital markets and green buildings? So, across all these different areas, we really are leaders in the field.
Adriana: It’s a great plug for a wonderful class. I had the pleasure to go with Robert Strand to Copenhagen. And it was a very impressive experience, learning how to do business with capitalism in mind, but with a systems thinking view, learning further about how you look at education, politics, corporations and unions, and how they actually work together. So, it was a very great experience.
So, beyond the different centers that already exist within Haas, there are also classes and the curriculum offerings for students. What are some of the other ways in which Haas is already demonstrating leadership in the curriculum?
Ann: So, our faculty are real leaders in this area, both in terms of the research they do and in the classroom. And our experiential programs are also really key.
I’ll give one example. So, I’ll talk about one of our professors, Reed Walker. Reed has published a lot of path-breaking and influential papers on looking at the effects of the Clean Air Act. And he’s been able to show that the Act was successful in reducing racial disparities and exposure to pollution. Another example is Nancy Wallace’s class on real estate investment and sustainability. And this was a class that she co-taught with Architect Edward McFarlane. And her students were able to directly experience the challenges and the opportunities in creating the next-generation city.
I also need to point out that two of our Haas faculty members, Catherine Wolfram and Adair Morse, now on leave from Haas, are working in Washington DC at the US Treasury under former professor and now Treasury Secretary, Janet Yellen. And they are actually working on issues of immediate concern. In particular, they’re working on climate change and other programs. So, our faculty are not just doing research, but they’re actually making an impact in policy in Washington DC.
I personally recently joined the board of the UN Principles of Responsible Management Education, which is a United Nations board. And that initiative is working to raise the profile of sustainability in business schools around the world.
Adriana: Wow, that’s fantastic. I have not heard of that organization. And now, I know something new. So, thank you for guiding us. So, what about, Michele? What do you think?
Michele: Okay, Adriana. So, in addition to what Ann said, just a few things. We are about to launch an undergraduate summer minor in sustainable business and policy that will start this summer. We, last year, launched last spring a new graduate certificate in sustainable business. In the spring of last year, we already had 10 students who had been able to fulfill the requirements. By the fall, we had 112 Full-time and Evening & Weekend MBA students enrolled to complete the certificate. We have more than 30 MBA elective courses focused on sustainability, including six applied innovation courses. We already talked about Cleantech to Market. But in addition, we have Strategic and Sustainable Business Solutions, the Sustainable Investment Fund we talked about, Food Innovation Studio, the Haas Impact Fund, and the Impact Investing Practicum.
We are now working closely with faculty to support—to integrate sustainability across our entire core curriculum of courses, so that students who don’t want to sign up to do the certificate program will still have the opportunity to be exposed to topics and challenges in sustainability through the core curriculum.
We also have a number of very interesting student clubs, including Food@Haas, Net Impact, the Berkeley Energy & Resources Collaborative, and others. And in fact, our students are the ones who are pushing us to do more. They have pointed out to us some of the missed opportunities to incorporate sustainability into the core courses, which we’re working on. In fact, Olivia, I know that you have looked at sustainability in the core courses. Maybe, you can share a little bit about your analysis.
Olivia: Yeah, absolutely. When you first came on board, Michele, last year during my first year at Haas, I was so inspired by the idea that business schools, as the training ground for future business leaders, should be equipping students with—not just students interested in sustainability, but all students—with some level of basic understanding or basic literacy in sustainability. And it’s really been an honor to be part of this moment where we have all of this momentum for advancing changes in the core curriculum. And when we started the process of reviewing and looking for opportunities to integrate more, we came up with a long list.
Just a few examples, looking at the core strategy course, we recognized that many of the sustainability issues we have are examples of collective action problems. And that raises the question of, how can corporations overcome collective action problems through things like pre-competitive collaboration? In microeconomics, we identified the opportunity to talk about externalities. How does pricing carbon emissions, whether you’re, as Dean Harrison mentioned, paying carbon tax or buying credits, how does that change your decision calculus about how much to produce?
And ethics is another example that comes to mind. How do we apply the ethical frameworks that we learn about in class, like principles of universality and humanity, to decisions about workers’ rights and wages?
So, it’s been an incredible opportunity to take a look and examine what’s being taught in the core curriculum today. And already, we have a number of professors who have implemented some of our recommendations. And my hope is that the work that we’ve been doing here at Berkeley Haas can also benefit other business schools and we can collaborate to share ideas and move the ball forward across the board.
Michele: Thank you, Olivia.
Olivia: So, shifting gears, I want to ask, what is one thing that you want all Haas students to walk away from their time at Haas having thought about or considered more deeply? Dean Harrison, let’s have you go first.
Ann: Thanks, Olivia. So, let me just set the stage. Ahead of the UN climate change summit in Glasgow last fall, more than 100 companies across 16 countries and 25 industries pledged to achieve net zero carbon emissions 10 years ahead of the Paris Agreement 2050 goal. What this tells me is that businesses are mainstreaming sustainability because it makes good business sense.
The most important thing for our students to understand is that the distinction between profit and purpose is a false distinction. Profitability is essential, but it is not sufficient. And the second most important thing that I want students to go away with is to think of businesses’ role in mainstreaming sustainability into this world, and that they are leading the charge and not to wait for governments to take on that role. So, that’s really what I think is important.
One last thing I want to mention is one of the things I really love about our MBA students, and I should say our Berkeley Haas MBA students, is that they solve problems in real time that are important for the world. That’s where our students get their energy. That’s why we need them. We need their courage to engage in this kind of transformational changes that will save our planet. And the answers aren’t just going to come from government. They’re not going to come just from the amazing research of our faculty. We’re all going to have to work together on this.
Adriana: I love that. I love hearing the not wait, because sometimes, we dedicate a lot of things to measuring and getting the numbers right, like transforming that from a measurement to an action and driving actions with passion and with change really drives the change. So, thank you very much.
Olivia: And Michele, what about you? What do you hope that Haas students will take away, having thought about more deeply?
Michele: Well, I, of course, totally agree with everything that Ann Harrison said. But I think, sometimes, it can be easy if you’re having a discussion about climate change or about environmental justice to feel helpless, to feel overwhelmed, to feel like, what can I do to make a difference, until you realize just how much we can do to change the trajectory of all this.
When students say to me, “I want to work on sustainability, what should I do?” I say, “Everything.” We do need new startups in renewable energy. We do need impact investments. But perhaps, more importantly, we need our students to lead a transformation in existing legacy companies, like oil and gas companies or consumer product companies or banks and the financial sector or steel, cement, etc. There are so many opportunities for our students to make a difference. And there is a reason for optimism. And I think our students are among those reasons.
Olivia: Well, that’s all the time we have left for now. Thank you so much, Dean Harrison and Michele, for sharing your time and your vision for Haas with us.
Adriana: And to our audience, thank you so much for tuning in to our first episode of the Sustainability at Haas miniseries. We have more to share with you. So, do not forget to join us for the following episodes where we’ll hear more about sustainability curriculum, the faculty, the alumni, and career perspectives on what is happening here at Haas in terms of sustainability. So, see you next time.