Our house sits next to a river. We see the water slowly rising year after year and threatening to flood the foundation. Then, a house fire erupts. What do we do? If we don’t act against both the fire and flood, our house will be gone.
Doug Baker, Chairman and CEO of Ecolab, believes climate change is a serious business risk that must be addressed even amidst a burning pandemic, as he describes in his house-on-a-river parable. In conversation with Brown Advisory’s Karina Funk, Baker discusses climate risk and lessons of the pandemic from his vantage point at the helm of Ecolab, which provides technology for clean water, safe food and hygienic environments to three million businesses around the world.
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Episode Introduction
Karina Funk: Right now it’s hard to get beyond the global pandemic and its fallout. The imperative to find a solution is intense. And those conversations we used to have with investors, millennials, voters, business leaders, scientists and policymakers about climate change? They feel like a long time ago. Yet whether top or mind or not, climate risk is also intense as evidenced by the correlation between urban air pollution and more severe cases of COVID-19. Or the fact that habitat destruction makes both wildlife and humans more susceptible to infectious disease.
There are other links between climate and COVID, starting with society’s immense inertia against investing in and preparing for events that are essentially binary, massive and unpredictable. We can debate whether this pandemic was predictable, but it certainly feels like, as a society, we weren’t prepared for how hard this would hit us. However, when it comes to climate change, we actually already know a lot and there’s a lot that we can predict, as well. We also know that climate action can be as much about avoiding climate change risks as it is about seizing the opportunity to create jobs, innovate, improve lives and save lives.
My name is Karina Funk. I’m a partner at Brown Advisory. As a long-term investor and chair of sustainable investing, I’m constantly looking for companies that are well-prepared for the future, whatever that may bring. That future includes a whole lot of volatility and unpredictability, and it definitely includes climate change.
Guest
Doug Baker
Chairman and CEO, Ecolab Inc.
Doug Baker is chairman of the board and CEO of Ecolab Inc., the global leader in water, hygiene and energy technologies and services that protect people and vital resources. Ecolab recently ranked #2 on Newsweek's annual Green Rankings list, #8 on Corporate Responsibility's list of Best Corporate Citizens and #26 on Barron's list of Most Sustainable Companies. The company regularly appears on Fortune's list of the World's Most Admired Companies and has been named to Ethisphere's list of the World's Most Ethical Companies for 13 consecutive years. Baker joined Ecolab in 1989, following seven years in brand management at Procter & Gamble. At Ecolab, he held a number of marketing and general management roles in the U.S. and Europe before becoming president and CEO in July 2004. In May 2006, Baker added chairman of the board to his duties. In addition to his Ecolab responsibilities, Baker serves on the board of directors of Target Corporation. He is trustee emeritus of the National Restaurant Association Educational Foundation and, a member of the Committee Encouraging Corporate Philanthropy, and is involved in a number of community initiatives in the Minneapolis-St. Paul area. Baker received a bachelor's degree in English from College of the Holy Cross in Worcester, Massachusetts, and serves on the college's board of trustees.
Host
Karina Funk, CFA
Portfolio Manager; Chair of Sustainable Investing, Brown Advisory
Karina is a partner, portfolio manager of the Brown Advisory Large-Cap Sustainable Growth strategy and chair of sustainable investing. Karina joined Brown Advisory in 2007 and has extensive investment experience spanning early-stage ventures to debt and public equities. She was previously an equity research analyst for Winslow Management Co, a principal at Charles River Ventures, and an investment manager at the Massachusetts Renewable Energy Trust.
Background Reading
- The Unlikely Environmentalists: How the Private Sector Can Combat Climate Change, Foreign Affairs, May/June 2020
- Leading a New Era of Climate Action, Harvard Business Review, January 31, 2020
- Larry Fink's Annual Letter to CEOs, BlackRock, January 14, 2020
- Let's Make Water Chapter One of the Climate Story, LinkedIn, September 25, 2019
