"The next generation of leaders should know about climate change as a matter of basic education," said economist Lord Stern in a talk on Tuesday.

Lord Stern is the Chairman of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics. He was speaking at Imperial College Business School for the launch of the new MSc Climate Change, Management and Finance programme, which opens for applications in November.

Speaking of the new Masters degree, he said: “The education of the current generation of students around climate change and environmental issues isn’t as strong as it should be, but it is rising. Imperial’s new MSc will help generate business leaders with foundations on not only the issue, but how to deal with it.”

He then spoke about the urgency of tackling climate change and how technology, innovation and finance are essential in managing the impact across society. “The two defining challenges of our century are managing climate change and overcoming poverty: If we fail on one, we fail on the other”.

He emphasised three solutions: pricing carbon, pushing hard on research and innovation, and working on capital markets to ensure the price of capital better reflects its real cost to reduce the bias against capital-intensive investment, such as renewables. 

Lord Stern stressed the relevance of this knowledge to business success across a broad range of sectors, including insurance, energy, transport, communication, manufacturing and finance. As well as challenges, he argued that climate change offers unique opportunities for industry to innovate and grow whilst facing up to its environmental responsibilities.

His comments echoed a recent speech by Bank of England Governor Mark Carney, who urged insurers to open their eyes to the profound implications of climate risks for the insurance industry, speaking at Lloyd’s of London last month.

Lord Stern predicted that progress on cutting global greenhouse gas emissions will be made at the Paris 2015 UN Climate Change Conference in November. He underlined, however, that the Paris agreement will not in itself be enough to avert dangerous levels of climate change, and that paving the way for further action will be a key measure of the conference’s success. 

“We’ll have an agreement. It’s an agreement that risks not being strong enough,” said Lord Stern. “The test for Paris will be the credibility of the intentions for ramping up ambitions quickly.”

He also argued that businesses have an important role to play in delivering cuts in greenhouse gas emissions needed to avert dangerous levels of climate change, and also in leading the way on measures such as carbon pricing and in developing the many opportunities that can arise from addressing climate change.

Reflecting on Lord Stern’s comments, Mirabelle Muûls, the Programme Director of the MSc Climate Change, Management and Finance, said: “Lord Stern clearly believes there is a real need for well-informed business leaders capable of rising to the challenges of climate change. Our new Masters degree will train future leaders, giving them both scientific knowledge and business skills, a combination that will make them a key asset for organisations keen to be at the forefront of this agenda.”