In Cambridge, Massachusetts, the sky is overcast while at the Harvard Business School, Professor Rebecca Henderson is feeling positive. An economist by training, Henderson began her academic career researching high-performance firms and innovation, which led to her serving as a US government witness in the Microsoft antitrust case. Since her book Reimagining Capitalism came out five years ago, however, she has become a beacon of climate optimism.
In Reimagining Capitalism, she argued that there was an economic case to act against climate change as reducing carbon footprints could boost profits. “I still believe everything I wrote,” she tells me. “What I realised is that the instrumental case is not enough to support action.” Global warming is “highly variable, not in your face, and slowly creeping up.” It is, she says, “the worst possible problem for human psychology.”
As Henderson’s work reveals, some companies have put aside short-term thinking and managed to drastically reduce their damage to the planet. The motivation, she says, lies in “having something bigger than profitability at stake.” One example that has drawn Henderson’s attention is Walmart. When Hurricane Katrina hit, the retail group “was instrumental in getting food and water to people”. Doing so made their employees “come alive”, sparking a broad culture shift at the company. Its carbon emissions are down by a third.
After I ask Henderson how we reached a point where Walmart is an exception to the rule, she takes a deep breath. “Economic activity became disembedded from communities and from people’s daily lives.” When a lot of factories spring up, she warns, workers become “things”, controlled by leadership who “manage them as things, for efficiency”. In her experience, “for many, thinking of people as things is easier”. This habit can be traced back to a wider problem: treating the world like a limitless resource. “When I say world,” Henderson clarifies, “it is everything that is not white, not rich, not educated.”
For Henderson, the second Trump administration’s hostility to regulation, retreat from diversity, equity and inclusion policies and endorsement of fossil fuels are sobering. Her view of the consequences? “It’s too late to fix it,” she says, before adding that “it’s very hard to see how we avoid a serious downturn.” Nevertheless, Henderson is resistant to pessimism and has “an unlikely idea... that might look like a social or secular spiritual revival.” She highlights the work of people in Mississippi facilitating reconciliation between black and white communities, especially around the murder of Emmett Till. On the question of how these community movements can be scaled up, Henderson is swift to contend that “It’s not like Harvard needs to give information to people, you know, about how to run... their communities… it’s more resources, and time, and legitimation, and space.”
Henderson’s thinking is always evolving, but the stakes remain clear. Recently, her class looked at Salt Lake City, over which, within five years, clouds of toxic dust laced with cadmium and mercury will blow. Henderson informs me that it would cost up to $300m to solve the problem, a thousandth of Utah’s total GDP. “It seems obvious, right?”
