We will not be able to solve climate change without the active involvement of the business sector and government. Both play a role and they are interdependent with one another.
I had the pleasure to interview Michael Lenox. Michael is the Tayloe Murphy Professor of Business at the University of Virginia’s Darden School of Business where he teaches the core MBA strategy course. He also serves as the school’s Senior Associate Dean and Chief Strategy Office. Professor Lenox has a long-standing interest in the interface between business strategy and public policy as it relates to the natural environment with recent work that explores firm strategies and non-traditional public policies that have the potential to drive “green” innovation and entrepreneurship.
Thank you so much for joining us! Your book, “Can Business Save the Earth?” was recently published. Can you provide examples from your book that speak to initiatives undertaken by entrepreneurs to tackle climate change?
A few of the examples referenced in the book include Newlight Technologies who developed a technology to use air-born CO2 to make carbon based products (called AirCarbon), the Climate Corporation (formerly WeatherBill) who developed information technologies to aid farmers in farming more sustainability, Nest (now part of Google) that developed thermostats and other products to improve home energy efficiency, and of course Tesla who is help pioneer electric vehicles.
Can you tell us about the roles of entrepreneurs versus established businesses in terms of how each is addressing climate change?
Often entrepreneurs and established businesses are positioned in opposition. The entrepreneurs as disruptors and established businesses as perhaps clinging to the past and resisting change. And while that definitely can be an accurate descriptor, I think it is more valuable to consider them as compliments — each bringing unique capabilities and opportunities to the table. Established businesses can bring manufacturing expertise and market access. Entrepreneurs can bring new, radical ideas. Through licensing, partnerships, corporate venture capital, and acquisitions — knowledge can flow between entrepreneurs and establish businesses increasing the innovative output of both.
In your book, you reference “sustainable disruption.” What does that mean ?
More specifically, we are interested in disruptive innovations in sustainable technologies. Disruptive in the sense that they disrupt the current competitive ordering and lead to widespread technology change. Sustainable in the sense that they reduce the environmental impact relative to current technologies.
Many people want to start a company to tackle environmental issues, but they face challenges when it comes to raising enough money to actually make it happen. Do you have any tips to offer entrepreneurs for how to raise the funding necessary to tackle environmental issues head on?
Every entrepreneur mentions access to capital as a primary challenge. Many sustainable technologies are particularly hard to fund since they need long development periods before becoming economically viable. I would encourage entrepreneurs to think broadly — seek funding not only from VC’s, but consider corporate funders, debt providers — such as green banks and green bonds, and the growing class of impact investors.
Do you think entrepreneurs/businesses can do a better job than governments to solve the climate change and global warming issues? Please explain why or why not.
I think this is the wrong question. Both play a role and they are interdependent with one another. We will not be able to solve climate change without the active involvement of the business sector and government.
Why should entrepreneurs, whose business has nothing to do with climate change, care about climate?
Climate change poses business risks across a wide number of sectors and businesses. From insurance, to the built environment, to the disruption of supply chains, all businesses should be assessing their climate risks.
We are not able to achieve success without some help along the way. Is there a particular person who you are grateful for who helped get you to where you are? Can you share a story about that?
My doctoral advisor, John Ehrenfeld, was very influential on my thinking and my career. John is a broad thinker who has written extensively about sustainability and the reconceptualization of the concept as flourishing. I am very grateful to have had John as a mentor.
What are your key pieces of advice for entrepreneurs starting out and why? (Please share any examples)
Entrepreneurs are often the catalyst for systemic change. My advice is simply get going! Pursue your passion and your values. Never lose sight of your dreams. Elon Musk and Tesla may not end up being the dominate player in electric vehicles, but their actions to date have already catalyzed the transformation of automobiles to a more sustainable future.
If you could inspire a movement that would bring a great amount of good to the world, what would that be? You never know what your idea can trigger.
I am an engineer at heart. I am inspired by trying to solve messy, complex problems. In this current political moment, we have seemed to lost our ability to be problem solvers. We need to remember that we are all stakeholders in a broader socio-political-economic system and the each and every one of us needs to work collaborative to bring about systemic change. I would like to see a movement of innovators, from all walks of life — from the private and public sector, banding together to innovate a sustainable future.