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Cornell SC Johnson College of Business

Keeping a Better World in Mind

A Dean's Blog by Andrew Karolyi

What is needed, September 2024

The world shows us what’s needed

Happy Labor Day, all. Another summer ending, another stimulating year ahead. After getting to spend some quality time enjoying nature, romping in Cayuga Lake with my grandkids, I’m feeling especially lucky to get to live in a wonderful, temperate climate.

Though I never forget that no place on earth is immune to what’s happening across the planet. Even in our corner of the world, natural habitats are threatened and destabilized. In time, these changes will affect everyone’s abilities and choices. My lens on this is, of course, responsible finance.

My colleague John Tobin-de la Puente is an ongoing thought partner and inspiration in the pursuit of nature finance initiatives. Earlier this summer, we contributed a new case study to the Financial Times’s special sustainability series offering, ‘instant teaching case studies.’ Ours is titled Can biodiversity bonds save natural habitats?  In it, we examine the financial planning that went into structuring Colombia’s first biodiversity bond, and how that functions within a nation recovering from 50 years of desperation and violence while stewarding one of earth’s most valuable ranges of biodiversity and climate vulnerability.

While the green bonds market has seen significant growth in the past decade, the capital it has raised has overwhelmingly been invested in climate mitigation, alternative energy, and green transportation projects. Minimal amounts have gone to biodiversity-linked conservation and habitat restoration projects.  In tackling the climate crisis, the trajectory seems clear: the set of solutions needed is more-or-less agreed-upon, and a good part of it makes economic sense. But, in biodiversity finance, doing deals is inherently more difficult. In financing nature, explicitly and directly, this Colombian bond might just break new ground, with metrics linked to objectives to benefit the environment. Investors will be repaid through a mix of funding sources including a carbon tax, the government budget and donors.

Colombia is experiencing as profound a shift in responsibility as can be imagined. So it’s fortunate timing that I will sit down with former Colombian President Iván Duque to discuss his book Our Future: A Green Manifesto for Latin America and the Caribbean. I cannot wait to hear his own thoughts about the Green Taxonomy in Colombia, about his own leadership in that push, and where he thinks we are going to go over the next several years.

Students always ask what’s needed

Interestingly enough, last week I was also included in a group project of Research.com, an Interview With Finance Experts: Answering Students’ Questions About Finance Trends | Research.com. Along with several other business educators, I answered some compelling questions from finance students, and learned some things about my own thinking in the process.

These students were understandably focused on preparedness for the transition into their professional lives. Their questions focused on skill sets, how to leverage current trends, the importance of internships and practical experiences and how to maximize them as opportunities. There was not really any disagreement between myself and my fellow respondents, although my own focus leaned toward the specific ways to balance global business acumen and awareness with analytical reasoning, as well as critical and strategic thinking. Of course, communication is essential – through verbal, written, and data visualization capabilities. Interpersonal skills once considered “soft” are now acknowledged as essential, and technology, especially Generative AI, is not our enemy in sharing knowledge; rather, we need to become expert in AI for business analytics used effectively and appropriately within people-centered leadership approaches.

It’s possible that my favorite questions were about experiential learning and the importance of a global perspective. This was a question right down the fairway for those of us at Cornell and in our SC Johnson College of Business. We know these go together in life-changing, revolutionary ways. Working alongside a community partner to address a real-time challenge brings out the best in a student and opens minds to indelible learnings. Financial markets are globally integrated, and all decisions require perception and understanding and sensitivity. Many businesses have suffered losses simply by being unable to understand and empathize with a foreign overseas customer base or workforce. These are hard lessons one should heed by becoming open to the unfamiliar. Keep your mind as broad as possible about the world around you by taking advantage of other learning in the social, natural, or applied sciences.

What about the coming year?

As I told our newly matriculating Dyson and Nolan first-year and transfer students, as well as our newly arrived MBAs and MPS students: I’m excited! The SC Johnson College is making progress in expanding the scope and depth of the education and research we support — in my own case, a special focus on biodiversity and climate finance issues. Saving the environment and natural habitats using the tools of finance is not a fad but a possibility, and indeed a skill we can build with the next generation. I am convinced of it.

In this environment of geopolitical turmoil and economic uncertainty, we must remain genuinely open. Let us all keep observing and learning!

And I couldn’t leave without mentioning: