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Why Size Matters

July 15, 2010 | Social Responsibility

In an interview that is part of SMR’s ongoing series on the business of sustainability, MIT’s Ernest Moniz, the director of the MIT Energy Initiative, explains why blending big-company culture with entrepreneurial innovation is the challenge that leaders must learn to meet. According to Moniz, large energy companies are the ones that have the capacity in terms of resources to scale up new technologies to impact climate change in a relatively short period of time. But to do so they need to be both “big and nimble.”
“The number one overarching issue, which does pose business opportunity, business risk, and a need to rethink business models, is carbon constraints,” says Moniz. “As you know, 85 percent of our energy is fossil fuel. Fossil fuel equals carbon. Controlling carbon goes to the very core of the way we currently supply energy.” There are multiple strategies for dealing with innovation in a carbon-constrained world, including mergers and acquisitions, and investments in research. But the innovation culture is not natural to energy companies; until now they have been rewarded for reliability, not innovation. Cultivating an open mind, dealing with uncertainty, and balancing competing requirements necessary for innovation ultimately comes down to the judgment of senior executives.

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