Summary
Overview
Steve Howard, Vice Chair of Sustainability at Temasek, challenges the notion that capitalism cannot solve climate change. Drawing from his experience as former Chief Sustainability Officer at IKEA and founder of several climate organizations, he presents four 'hard truths' about how profit-driven systems can scale climate solutions—but only if we fundamentally change the rules of the game through policy reform, long-term investment, and a relentless focus on making sustainable options better than their alternatives.
The Hard Truth About Business Machines
Howard opens with a powerful reality check about how businesses operate, using the example of a car manufacturer's resistance to electric vehicles. He reveals that companies are fundamentally 'hardwired and softwired' to do what they do, with entire organizations, supply chains, and workforces built around specific business models. This makes transformation incredibly difficult, and we're mistaken if we expect companies to change themselves without external pressure or incentives.
- Every business is a machine hardwired and softwired to do what they do, making change incredibly difficult
- A car company CTO declared 'never, while I am CTO, will we make an electric vehicle' 15 years ago
- The same car company had hundreds of engineers who spent careers perfecting internal combustion engines and 100 years of supply chain investment
- Companies rarely change themselves by themselves—exceptions are exactly that, exceptions
" Every business is a machine. They are hardwired and softwired to do what they do. That's why they're really good at it. "
" Never, while I am CTO, will we make an electric vehicle. "
The Short-Term Trap of Financial Markets
Howard's second truth exposes how financial markets are structurally designed to prioritize short-term profits over long-term value creation. He shares revealing conversations with financial leaders and introduces the concept of 'externalities'—the trillions of dollars in costs from environmental damage, pollution, and climate change that companies don't pay for. These unpaid bills represent a massive subsidy for businesses at the expense of people and the planet.
- A private bank leader admitted: 'I've never met a long-term investor'
- Markets are fundamentally 'baked in' to pursue short-term profit over long-term value creation
- The 'free market has had a free ride'—externalities worth trillions of dollars remain unpriced
- These externalities include costs of nature destruction, pollution, human health impacts, and escalating climate change costs
- Unabated climate change could wipe out a quarter of global GDP—equivalent to five COVID pandemics that never end
" I wake up in the morning and think how much profit will I make today. I go to bed at night and think how much profit did I make. "
" Unabated climate change will wipe out a quarter of global GDP. That's five COVID pandemics and it's a pandemic that doesn't go away. "
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