Wall Street Calls

The health of our planet and the health of our economy don’t have to be at odds. Rick Duke bridges the gap.

Rick Duke doesn’t come across as your stereotypical environmentalist. In a field dominated by khakis and fleece, he wears business suits. In NRDC’s New York headquarters, staffers tend to talk about legal victories and wilderness protection; Duke waxes on about capital flows and maximizing energy productivity. And instead of meeting with the usual roster of activists, attorneys, and lawmakers, Duke spends his days brainstorming with executives from leading corporations and investment firms about shaping smart rules that would allow industry to scale up global warming solutions.

Historically, industry executives have reluctantly confronted environmentalists in courtrooms. But today Duke, who heads up NRDC’s newly launched Center for Market Innovation, meets with them in their corporate offices to discuss the financial upside to addressing global warming, and to persuade them that in a warming world, the environment is a boardroom-level concern.

“On his very first day here,” recalls Frances Beinecke, NRDC’s president, “Rick joined me at a meeting with the CEO of Goldman Sachs, Lloyd Blankfein, to discuss environmental leadership opportunities for the company. Rick spoke the language of the investment world—rates of return and risk premiums and what makes a clean energy investment attractive to financial leaders.”

As an undergraduate at Brown University, Duke majored in environmental studies and focused on global warming, writing his thesis on the role utility companies play in promoting energy efficiency. But he also had a second major, economics. Upon graduation, when many of his friends headed to the Environmental Protection Agency or nonprofit advocacy groups, Duke took a job at the Federal Reserve.

He would soon head back to the classroom, however, this time to combine his two academic interests at the Woodrow Wilson School of Public Policy at Prince-ton, where he wrote his doctoral dissertation on the economics of public support for emerging clean energy technologies. More specifically, he examined strategies for commercializing solar energy technologies in a way that would encourage the fastest possible market adoption.

In 2002 the newly minted PhD turned down an offer to teach at Georgetown University in favor of applying his skills in the business world. He went to work for McKinsey & Company, the New York–based consulting firm, because, he says, “Understanding finance is critical to devising smart solutions to global warming. Tackling this problem will require an unprecedented redirection of capital from dirty energy infrastructure to clean energy solutions.” What’s more, he says, “to have any credibility or understanding of which policies make sense, I felt I needed experience in the private sector. I needed to understand what goes on in Fortune 500 boardrooms.”

As it turned out, Duke arrived at McKinsey a little ahead of his time. Few of the firm’s clients were concerned about global warming in 2002, and when Duke brought it up, “People considered it sort of cute but irrelevant.” He spent the next few years developing growth strategies for technology companies and improving financial productivity for industrial clients—standard corporate consulting projects.

In 2006, the mood began to change. Vattenfall, a Swedish utility company, hired McKinsey to evaluate the global economic impact of reducing greenhouse gases, and Duke was put in charge of the research. The study concluded that solving global warming wasfinancially feasible, at a cost of less than half of 1 percent of the global domestic product. The results were widely covered in the international business media, and a handful of American corporations, such as Shell and Honeywell, in partnership with NRDC, hired McKinsey to conduct a similar study focused specifically on the U.S. economy.

Duke joined NRDC in 2007: he decided it was time to shift from helping individual companies address climate change to helping shape the policies that would begin to rein in global warming emissions. All too often, he believes, the market fails us when it comes to making socially responsible choices, such as investing in clean energy. For example, solar-grade silicon manufacturers are reluctant to build expensive factories without the promise of a strong, sustained solar market. “We need to put the right rules in place so we can help businesses scale up solutions with confidence,” Duke says.

Duke also shares some common ground with old-school environmentalists, though he does tend to pepper his conversation with phrases like “from a techno-economic perspective.” As he puts it: “Major corporations are immense and complicated. I think it is entirely right that at the same time NRDC is negotiating environmental initiatives with one branch of a large company, we can litigate against another business unit if we have to.”