Read the attached article from Wall Street Journal looking at some companies' competing understandings of "addressing climate change", then answer the following questions:

1. Why do you think companies differ in their understanding of an issue like climate change?
2. What would you recommend to get companies all on the same page in this regard?
3. How do you feel about the use of "carbon offsets" for companies to meet their environmental goals? In your opinion, do carbon offsets actually help solve the problem of climate change or do they not go far enough?

Executive Summary Climate change presents one of the biggest chatlenges to economies in the 21st century. The impacts of climate change wiLl affect where new offices and manufacturing facilities are sited. how leaders plan for and respond to crises. how investors think about the cost of capital. how customers perceive the brands they buy. where and how raw materials are sourced. and even. potentially. what materials are available for new products in the future. Because of the widespread nature of impacts. these risks are relevant to MBAs in functions including nance. strategy. procurement. product development. marketing. real estate. operations/supply chain H _ management. and human retations. Climate change presents signicant risks to many Managers who understand the risks can atso envision business . . companies, by threatening opportunities. Companies that act now to mitigate risks in their supply chains. properties. and investment portfolios can gain their assets and Supply competitive advantage over industry peers. Acting on climate - also minimizes companies' reputation risk with customers. Chams' The more they employees. and policymakers. Finatly. there are a host of know abOUt those "5kg: the multibilliondollar growthmarket opportunities that faster they can act to entrepreneurs and investors can capitalize on. Every MBA thinking about the future of business should understand the risksand opportunitiesfacing their industry from climate change. Michaet Eiloomberg. CEO. Bloomberg LP. address them." Tllle Issue 51mm 2015 trim: Report The climate is changing as carbon dioxide (C02) and other greenhouse gases emitted by industrial activity interfere with the earth's natural climate system. Heattrapping gases concentrated in the atmosphere are producing an overali rise in average globai temperature ("globai warming"). but also disrupting the atmospheres typical patterns. producing complicated changes that ale inten'etated but not uniform. \fClimate Change a Business: What tvery MBA Needs to Know Agriculture products Beef and dairy farming is one of the biggest emitters of the greenhouse gas methane. For that reason. there's a new push for plantbased proteins (like WW. labgrown meat W. and alternative proteins l{like ms cricket protein). Barclay's predicts the alternative meat market could be worth $140 billion by 2025;}.XVII Biotech crops that are heattolerant and droughtresistant. as well as climateadaptive agtech innovations will also be big. Companies like McDonald's and Nestl are moving to riskproof their ag supply chains. and other companies are realizing opportunities to address this market. IBM. for instance. is developing Al technologies to help farmers improve yields integrating weather data with 'smart' irrigation systems as well as blockchain technologies to make food supply chains more sustainable. Climate nance. Insurance & risk management Insurance companies (particularly reinsurersi and investors are beginning to price climate risk into their portfolios. ESG lfenvironmentalsocialgovernance) investing markets are growing. including funds which seek to exclude highly exposed companies and/or include climate leaders. Blackmcks Global Head of Sustainable Investing. Brian Deese. has said. \"The combination of advances in data sciences. including geolocation data and climate modeling. have allowed us to more precisely assess the investment implications of climate related risks." HSBC and the Climate Bonds Initiative assess the market for climatealigned bonds at $1.45 trillion.\"iii Startups like AM see opportunities in using predictive analytics to forecast climate risks for companies and investors. Carbon solutions Technologies to remove carbon from the atmosphere l[carbon capture and sequestration] are still frontier technologies but they are poised to be huge moneymakers if the technologies pan out. Ca i . a startup with a system that pulls CO? out of the air ("direct air capture"). has raised $100 million in VIC funding. Other companies. like Lamalgjj and NEW. want to capture and reuse CO; at the point of emission. The accelerator Y Corrbinator announced a call in 2018 for entrepreneurs with carbon removal technologies. And. if other solutions fail. some investors are banking on a host of farout "geoengineering' strategies. like Loggia. which attempt to cool the planet through large systemslevel environmental innovations. \fextreme coldfor instance. when warm air displaces Arctic air over the U.S.. causing a 'polar vortex") Extren'ne heat. in the US. up to 26% of U5. metropoiitan areas could see more than 100 days a year of 95F heat by 20502080. versus only 1% today. \" Extreme heat intensies the potential for drought and wildres. raises energy bills. presents heaith risks to populations. and decreases worker productivity in industries like agriculture and construction. More WWW in ma locations. Climate change affects how much moisture the air can hold. meaning that hurricanes (cyclones). rain storms. and snow storms all increase in intensity. Some regions may experience extreme rainfail and ooding. even as others are experiencing water shortages and wildfires [such as 2018's Hurricanes Florence and Michael on the East Coast and wildres in California). Sea level rise. As land ice in the Arctic meits and warming ocean water expands. sea levels are rising. causing coastlines to move inland and increasing the destructiveness of storm surges. Even in the absence of storms. 'sunny day ooding" [or 'nuisance flooding') caused by sea level rise increasingly interrupts business and damages properties in some coastal cities like Miami. FL. in the US. 40% of the population (126 million people) live in coastal countiesiii that could be affected by rising sea levels. - Agricultmal growing region shifts With a warming climate. growing regions for crops are shifting. For example. the growing regions for wheat in the U.S.. Europe. and Russia are creeping further north each year. Heat. drought. and storms also affect crop yields generally. Some crops that have limited or specialized growing regionslike coffee. cocoa. peaches. almonds. vanillaare particularly vulnerable. - Population displaoan'ient. Sea level rise will force migration of people from coastal areas and island nations to higher ground. Other large population shifts will occur as events like prolonged drought and natural disasters displace inhabitants. As climate impacts worsen. there are likely to be compounded impacts. Population displacement. drought. and food shortages may threaten local or regional political stability. Extreme heat and expanded ranges for water and mosquitoborne diseases will bring new public health issues. Causes RegionsofGrBalestPotenHGJn'ate-RaliedlskaposweinmeUS. Source: ssessrng Exposure to Cmote Charge in US. Mum's. ' Four Twenty Seven. May 2018. seems Fem Tmine-van. i1[inf/43mimm/zora/oyaa/ossasing-emmwebcmremngemm mmi/ The changes to the climate are due to an increase in C02. methane. and other greenhouse gases due to industrial activity as well as deforestation l[the removal of trees which naturally absorb CO; from the atmosphere}. The most signicant contributors to climate change include: The burning of coal. oil. and gas in the production of electricity. which emits CO: The burning of gasoline and diesel in transportation (cars. trucks. airplanes}. which emits CO2 Deforestation to clear land for agriculture. timber harvesting. and development Agricultural and industrial activities which release methane and nitrous oxide into the atmosphere E 2019. Center for Energy. Develoment. and the Global Environment. The Fuqua School of Business. Duke University. Durham. NC. \"HEDGE, Climate Change 8: Business: What Every MBA Needs to Know Buslness Rlsks | KPMG Gl b lCEO 0 ti k CEO f t \"Over three-quarters Of n 's 2019 o a u 00 . 5 mm across sec ors listed environmental/climate change risk as the number one CEOS (76 Percent) say that threat to growthahead of disruptive technology risk. cyber tI'IEiI' organization's growth security. and operational risk.iv Climate change impacts present will depend on their ability tangible and intangible risks to busmessessome of which _ _ low-carbon. clean- Physlcal asth risks technology economy." In the immediate term. extreme weather events intensified by climate change directly threaten real property assets. When Hurricane Harvey hit Houston. TX in 201?. hundreds of corporate campuses. manufacturing facilities. and reneries were ooded. Businesses lost buildings. vehicles. and equipment. Twentyfive percent of the region's oil and gas production shut down\" and corporate productivity was reduced by 163%.Vi Munich Re estimates that natural disasters globally caused $150 billion in damages in 2018 and notes that these disasters. particularly wildres. are worsened by climate change."ii Blacla'ock estimates that extreme weather events also pose growing risks for the credit worthiness of state and local issuers in the $3.8 trillion US. municipal bond market.WI More intense rain and snow events. wildfires. and droughts all have the potential to affect physical assets. KPMG 2019 Global CEO Outlook Supply chain disruptions In a world of global supply chains. a company's operations can be interrupted even when its own facilities are not directly affected by natural disasters. In 201.1. when the country of Thailand was crippled by extreme ooding. Toyota had to suspend production at plants in North America because Thaimade components were unavailable.\" in another example. a record heat wave in Australia in early 2019 affected the consumer goods manufacturing company Ma's 'One of our facilities in Australia had to shut down for a couple of days because the temperature spiked. the price of electricity spiked at the same time. and it was just no longer nancially viable for us to have that facility open and running and producing the things that it it produces for our consumers in Australia,' said Lisa Manley. Mars' Senior Director of Sustainability Engagement 3. Partnerships. She added: '1 think that we've got very real business risks as a result of climate change."x Raw material supply at price volatility risks The growing regions and yields for many agricultural products are shifting because of climate change. For instance. in Brazil and Central America. 80% of the land currently used to grow Arabica coffee will become unsuitable by 205o*'a scenario likely to reduce coffee supply and drive up prices globally. Companies that source agricultural inputs need to take a good look at the vulnerability of their suppliers under different climate scenarios. Does their supply chain have redundancy? Are there alternative growing regions for their products? Are there ways to mitigate exposure or adapt? Starbucks. for instance. is working directly with coffee farmers to adapt growing practices and test new plant strains for a warming world. Policy,r risk When policies (federal. state. or local) are enacted to restrict. penalize. or tax carbon emissions. companies with high emissions face signicant business risk. Though the US. has failed to adopt a federal climate change policy or a carbon tax in the past. the possibility of new policy exists with every election. Energy companies like electric utilities and oil 81 gas companies are particularly exposed to policy risk. Companies may nd "The implications for investors themselves with \"stranded assets" if carbon taxes make go beyond coastal real estate it too costly to operate carbonintensive facilities. Think of agriculture (CI'OF; Ermrmr cost risk yields). insurance (property and Commercial energy costs are expected to rise in most US. metro areas as temperatures go up and the need casualty Premiums' and EleCtric for cooling increases (though facilities in some northern utilities (fiSkS to plants; peak cities might actually see costs go down as they reduce _ their need for heating). Electric utilities with Electric\"), demand) The infrastructure vulnerable to ooding. hurricanes. or damage from Storms: oor-15 and wildfires are seeing the costs to manage these risks go heat waves can also disrupt up. and those with relatively high fossil fuelbased generating assets will also face higher exposure to corporate supply Chains _ and carbon policy riskcosts which they will pass on to pressure public nances. posing customers. Energyintensive industries are particularly l'lSkS to municipal and SOVEI'EIQH at risk of risin ener costs. 9 93' bond holders." Reputation risk In the age of social media. consumers increasingly hold - BlackRock companies accountable for social and environmental positions and are quick to support or abandon brands based on values. Consumerfacing brands that fail to address climate change issues face potential public outcry and even boycotts from some consumer segments. Failure to address climate can also hurt a company's image with employees. In May 2019. for example. 7.700 Amazon employees made news as they formed a group called Amazon Employees for Climate Justice and spoke at the company's shareholder meeting to call for stronger climate action. BEIWIQW' Scam wears-rm rmw'eioled M1019 Access to capital All of the above risks have the potential to affect a company's cost of capital Investors are beginning to require greater disclosure of climaterelated nancial impacts. The Task Force on Climate related Financial Business Advocacy on Climate CEO Climate Dialgue CEOs from Bill. DuPont. Uriel-fer. Sl'BlL Ford. and other companies are advocating for US. federal policy action on climate. We Mean Business We Mean Business tracks 900+ com panies' corporate climate action commitments Like renewable energy. land use. and emissions targets Climat e i ncil Founded with member companies including Johnson lm. (34. Mla'oso. and Papsioo. this institute advocates policy action including a carbon tax Sr dividend policy. Disclosures. chaired by Michael Eiloomberg. has put forward recommendations for companies to disclose a wide range of risks. Insurance companies are also taking note. \"We are very focused on carbon transition risks and how those risks are affecting all kinds of sectors globally." Jim Hempstead. managing director of the EEG Group at Moody's. said in an interview in May 2019"" Business Opportunities Companies and entrepreneurs who get ahead of climate risk stand to realize tremendous value. Many companies have corporate sustainability departments that are setting climate goals. assessing risks. and communicating with investors. Corporations that adapt their supply chains. operations. and infrastructure can gain rstmover advantages over industry peers and capture new business opportunities. in a June 2019 survey by the nonprofit CDP. 225 of the world's 500 biggest companies estimated that climaterelated opportunities represent potential nancial impacts totaling over $2.1 trillion."iii Growth market opportunities Carbon removal & sequestration technologies lcarbontechl Climate-resilient real estate 81 building systems Adaptation infrastructure {sea walls. ood defense systems. raised madaedsi Renewable 81 low-carbon energy I.'.l|l 3-illtil .I.It (3.. \"HEDGE" Climate Change SI. Business: What Every MBA Needs to Know Resilient real estate 8: physical Infrastructure There is a tremendous amount of innovation happening in the world's major cities as they think about resilience strategies {see 100 Resilient Cities and go Cities). Companies with real estate assets can identify and fortify buildings that are at risk of ooding (moving electrical and heating/cooling equipment to higher floors. for instance}. They might also install onsite solar. wind. and battery storage systems to provide emergency power to facilities in areas where electric power could fail. or might consider relocating altogether. Real estate developers and investors should use climate scenarios and sea level rise projections when thinking about siting new developments. Entrepreneurs with energyefcient and climateresilient building technologies will also see new growth opportunities Resilient It redundant supplyr chains Many companies are examining their supply chains for potential climate related risksespecially for sites vulnerable to extreme weather events and developing contingency plans. For example. General. Motors {GM} developed supplier mapping to help provide visibility into vulnerable suppliers and developed an active crisis center that monitors the weather and begins contacting suppliers when extreme weather events are forecas 9"\" Low-carbon energy It energy storage One of the biggest shifts in response to climate change will be a transition from fossil fuelbased power generation to lowcarbon energy (solar. wind. hydropower. nuclear). Bloorrberg New Energy Finance projects that of $11.5 trillion being invested globally in new power generation capacity between 2018 and 2050. $8.4 trillion will go to wind and solar and a further $1.5 trillion to other zero-carbon technologies such as hydro and nuclear.W Energy storage lbatteries]I and related grid infrastructure are also key to this transition. The Bill Gates-backed fund. Breakthrough Energy Ventures. plans to invest $1 billion in energy storage. liquid fuels. offgrid microgrids. lowcarbon building materials and geothermal energy technologies