As businesses and governments work to recover lost ground after the coronavirus pandemic, they should seize the opportunity to return to a world that is environmentally cleaner than what they left behind. They have the backing of public opinion to “build back better,” according to Lord Greg Barker, executive chairman of En+ Group — a Moscow-based global energy and metals producer — and a former member of U.K. parliament. From 2010 to 2015, Lord Barker served in the David Cameron government as an MP and minister of state for energy and climate change.
This is also a time for politicians and business leaders to test their mettle in bringing about a demonstrably lower carbon footprint and a greater commitment to combat climate change, Barker noted during an interview with Wharton management professors Peter Cappelli and Michael Useem as part of a new virtual event series titled “Leadership in the Wake of COVID-19: What Enterprise Leaders Will Need to Survive and Prosper in the Years Ahead.” The series is hosted by Knowledge at Wharton in partnership with the 2020 Wharton Leadership Conference, the Wharton Center for Human Resources, and the McNulty Leadership Program.
An edited transcript of the conversation follows.
Peter Cappelli: In your previous role [in Parliament] and in a recent opinion piece in the Financial Times, you have made the case that we should take climate change more seriously and address it. I wonder if you could talk about your experience in pushing those arguments forward. Why that was important to you, and what were the difficulties in trying to advocate for climate change?
Lord Barker: I went into politics in 2001, and had a background in business. I was elected in 2001 as a conservative member of Parliament at a time when we were in deep opposition, and Tony Blair (prime minister from 1997 to 2007) looked like he was set to rule for the rest of the century.
I took that opportunity to join the Parliamentary Environmental Audit Committee, just at the time that climate change was coming up the political agenda globally. It was the time that Al Gore, for example, published An Inconvenient Truth. I remember that having a real impact on me, and it prompted us as a committee to launch our own investigations on the issue of climate change.
To me it became a fascinating, all-consuming subject, because it included the economy, the way we live, and softer things like education. It was an international issue; it’s not something that just affects domestic politics. But also, it was an issue which demanded innovation. It demanded a full response across a suite of policy measures. And not everyone was taking it seriously.
The more I read, the more convinced I became that this represented probably the greatest long-term threat not just for our country, but also the planet. So it became inescapable that I would want to be involved in that.
Cappelli: Can you tell us a little bit about what was difficult – and continues to be difficult – about trying to get attention for this topic? And how do you make progress on that?
Barker: When I first started talking about this in the early 2000s, a lot of people in the British Conservative party thought I was a complete crank — mildly eccentric, or even that I was some sort of socialist in green clothing. That prompted me not just to explain the problem of climate change, but also to make an authentic, conservative, pro-business case for why we should be taking action.
“With the huge amounts of government money being poured into the global economy, there is a serious opportunity for policymakers to insist that investment is channeled in certain ways.” –Lord Barker
[That was] not only to appease my conservative colleagues. I genuinely believed that we needed to marshal the dynamism of the free market economy and send it in a direction that would find climate solutions. And I’ve always been fundamentally optimistic that solutions could be found.
Early on, people wouldn’t just debate whether or not we had the right solutions; they would debate the actual science. Half of my career was spent arguing with very respectable climate deniers, and that was a real challenge. Thankfully, that has now passed. I think 2015 was a seminal moment. (The U.N. Climate Change Conference in 2015 resulted in the Paris Accord).
The whole world seems to have moved on, and the question is not if climate change is happening, not if mankind is responsible, but what should be the nature, scale, and pace of response. And that’s a much better place to be in.
Also, we’ve had a huge degree of success which often goes uncelebrated. One of the biggest achievements of my political career – I played a small part, but something I was very proud to be involved in – was the passing of the cross-party Climate Change Act in the U.K. in 2008.
It was the first climate change act anywhere in the world, and it then unilaterally committed the U.K. to reducing carbon emissions by 80% by 2050 from 1990 levels. And people said to me, “You can’t do this, this is impossible, you’ll ruin the economy.” What’s happened is we were able to grow the economy in the U.K. quite impressively in the early part of this decade.
At the same time, we reduced emissions. We’re more than halfway towards meeting that original goal of 80% reduction. Prime Minister Theresa May, before she left office, moved the goalpost up to 100%. So, we’ve still got a long way to go, but we have made real progress, in large part due to the phasing out of coal and the creation of an entirely new industry in the U.K of renewable energy.
The Time to Act Is Now
Cappelli: In your Financial Times opinion piece, you argued that now — the middle of this coronavirus pandemic — is an appropriate moment to take a big step forward with respect to climate change. Tell us why.
Barker: In the face of this unprecedented pandemic, every business leader first and foremost is focused on the short-term health and welfare of their employees. I am executive chairman of the En+ Group, and worldwide we employ more than 100,000 people – not just in Russia, but also in Europe, in Africa, and in Central America. We feel a great sense of responsibility to employees. That’s our number-one focus.
But if I could quote [the band] Fleetwood Mac for a moment, we can’t stop thinking about tomorrow. If you’re a business leader, you’ve got to be capable of doing more than one thing at a time. [Along with] responding to the immediate health and safety needs of employees, you’ve got to think about the longer term impacts. And as Winston Churchill said, never let a good crisis go to waste. That what we have to do now.
With the huge amounts of government money being poured into the global economy, there is a serious opportunity for policymakers to insist that investment is channeled in certain ways — that we once and for all kick the highly polluting, environmentally damaging, carbon-intense industries and business practices of the last century or more, and we use this as a real opportunity to have a step change towards a low-carbon, more sustainable future. There are different ways in which different industries and different countries can approach that, but we do have to see this as a once-in-a-lifetime opportunity to make that change.
The Challenges for Leadership
Cappelli: You make a great point about the importance of trying to get people to think about the future rather than focus on just the current problems. What do you think has been persuasive in trying to get people to think longer-term about this, and not just be so focused on their quarterly performance, or their immediate concerns? How do you get them to think long term?
Barker: In order to have license to think about the future and to posit your ideas for that road map to the future, you have to at least be competent in dealing with the present. So it cannot be instead of. This is not an either/or agenda. You have to show that you are able to deal with the very real challenges in the here and now, and that’s never been more critical than when facing this pandemic.
“The question is not if climate change is happening, not if mankind is responsible, but what should be the nature, scale, and pace of response.” –Lord Barker
This goes to certain leadership lessons. You have to be able to clearly articulate and communicate what it is you want to see, not just speak in wooly management-speak, or popular hashtags. You have to have a clear idea, and a road map of actionable points.
But effectively it’s CEOs setting goals for their successors or their successor’s successor to meet, while actually doing very little in the near term for which they are going to be held personally accountable.
Cappelli: Before we began the broadcast today, my colleague Mike Useem was asking me a little about David Cameron, your colleague and leader in Parliament, and his leadership style. Could you tell us a little bit about his effectiveness? He seemed to be quite effective in leading in this kind of context.
Barker: David [Cameron] has a natural authority. We came into the House of Commons together, a very small cohort in 2001. It was immediately apparent to me that he stood head and shoulders above the other members of Parliament. So when there was an opportunity for a new leader to be put in place in 2005, without hesitation I encouraged him, along with others, to step up even though he was relatively young and relatively new on the scene.
It was very clear that he had the x-factor for leadership. Again, he is incredibly articulate. To see him at the dispatch box, he was able to put into words and craft the sentences under pressure in a way that very few people are able to do.
But he was also a very serious administrator. He had a first-class degree from Oxford, had a fine brain. But I’ve seen plenty of more intelligent people, more academically qualified people, not be able to convert that intelligence into political effectiveness. And David was able to marry them both.
A lot of politicians I’ve come across always have to try and prove that they’re the most intelligent or important person in the room despite the fact that they hold the highest office. David was always thoughtful and listened to advice, but you had absolutely no doubt as to who was in charge.
He was a very agreeable person to work with. The David Cameron you saw in public was very similar to the David Cameron in private. A lot of politicians are not like that. There are many politicians that have a terrible public image, and in private they’re delightful. Conversely, there are some very popular politicians who are a nightmare in private.
Cappelli: I’d like to share the podium here with my colleague, Michael Useem, who has been looking at questions from the audience and has his own questions, too.
Michael Useem: In the FT opinion piece that you wrote, you use a phrase, “build back better.” I find the phrase really appealing. Thinking about its application now in the coronavirus moment, how do you see the U.K., the U.S. and other countries building back better, and who is going to drive that?
Barker: Ultimately I think we’re going to build back better, because the people of the U.K., the U.S., and around the world are going to demand that we do. We live in a democratic age now, where everyone, thanks to social media, has a voice. There is an increasing clamor that we don’t just go back to business as normal.
In my own line of business, what does build back better mean? I lead the world’s largest producer of low-carbon aluminum. To put that in context, the average ton of aluminum can take up to 16 or 18 tons of carbon to produce because it’s so energy-intensive. My group is also the world’s largest private sector hydropower company. Because we use that to make aluminum, instead of [consuming] 18 tons of carbon for a ton of aluminum, it just takes 2.6 tons.
If you’re using these tax dollars to invest in renewable energy, in electric vehicle charging points, electric vehicle manufacturing, sustainable housing, you use low-carbon aluminum. [It is important] that you think about the consequences not just of the thing you’re building but the whole supply chain, in order to make it a more circular economy and create more sustainable outcomes.
I think it lends itself to not just a national mood, but a global mood. It can assure people who have made huge sacrifices during this pandemic that it hasn’t just been for short-term effort, that something better is going to come out of this huge collective effort.
Useem: Great, thank you. How do we know when a particular company is doing that or not? What are one or two metrics that you would look at both if you’re a business executive at that company, but also if you’re in Parliament looking at that company to know if they are indeed coming back sustainably or not?
“There is an increasing clamor that we don’t just go back to business as normal.” –Lord Barker
Barker: It’s quite hard, because business is not as transparent as it should be. In my own sector, I’ve been arguing since last year when I took up this role that all the major manufacturers of aluminum should be declaring the carbon content of the metals that they produce.
It’s the same in many other industries as well – that information is not readily available. I would like to see much better green labeling [like on] consumer products. [We need] carbon transparency for commodities so that when a vehicle is manufactured, or when people are building public buildings or large infrastructure projects, it is very clear what the carbon content and also the wider sustainability features of those projects are.
People have been talking of sustainability for some time now. This is the time to convert that talk into tangible actions, and be accountable for them. The only way businesses can be accountable for their actions is to have greater transparency and greater disclosure on the sustainability and carbon content of either the products that they make or the services that they offer.
Tackling Inequity and Inequality
Useem: Inequity and inequality have worsened both in the U.K. and the U.S. in the last several years. In building back better, how can we ensure that in coming back from the current crisis we don’t exacerbate the inequalities both in heightened poverty rates, for example, but also in the politics of the moment? [How can we] build back better while not worsening — and hopefully improving — the extent to which we have equity and equality in both of our countries?
Barker: This is a time for strong leadership, and it’s time for politicians to think outside of the box and maybe even outside strict party lines. In previous pandemics, the survivors have actually been left better off.
For example, if you go back to the Middle Ages and the Black Death, after that pandemic, so many people were killed that there was a shortage of labor and the living standards of the peasants and the laboring classes rose in the couple of centuries afterwards as a result of the need to compete for labor. But now, far more jobs have been destroyed in our economy than – thankfully – people have been. There will be huge numbers of people around the world who will have their livelihoods threatened or their jobs taken away.
That does require new thinking and recognizing that this is an entirely new set of circumstances. It requires a strong policy lead from politicians, it requires collaboration and partnership with business as well. Politicians have to be clear to the public what it is that they are trying to [achieve as the] benchmarks of success.
[They must] also be honest about what can’t be achieved, because we’re not going to be able to just bounce back better immediately, and there will be economic casualties of this pandemic. We have to make sure that we also identify the sunrise industries and the areas that will benefit from a green recovery.