Episode Overview

Podcast: TED Talks Daily
Episode: 4 hard truths about capitalism and climate | Steve Howard
Date: November 22, 2025
Speaker: Steve Howard, Vice Chair Sustainability at Temasek

In this powerful talk from the 2025 TED Countdown Summit in Nairobi, Steve Howard explores whether capitalism—the system many blame for the climate crisis—could also be harnessed to deliver climate solutions at scale and speed. Howard, a veteran sustainability executive and investor, lays out "four hard truths" about capitalism’s relationship with climate change, and argues for a bold rewiring of profit-driven systems to meet the climate challenge.

Key Discussion Points & Insights

1. Businesses are Hardwired Machines

Timestamp: 03:42 – 07:00

• Core idea: “Every business is a machine. They are hardwired and softwired to do what they do. That’s why they’re really good at it.” (Steve Howard, 04:00)
• Illustrative story:
  • Howard recounts a meeting from 15 years ago with a global car manufacturer’s CTO who refused to consider electric vehicles. The CTO was merely reflecting the company’s ingrained focus and investments in internal combustion engines—a product of decades-long specialization.
• Insight:
  • Change is exceptionally difficult for large companies because their entire structures—staff, supply chains, and systems—are optimized for existing products, not transformation.
  • There are exceptions, but “we’re sorely mistaken if we think all companies will change themselves by themselves.” (05:45)

2. Financial Markets are Addicted to Short-Term Profit

Timestamp: 07:01 – 11:25

• Short-termism:
  • Financial markets are “baked in” for short-term profit and do not support the long-term value creation required for systemic climate solutions.
  • Notable quotes:
    • “The leader of a private bank said to me recently, ‘Steve, I’ve never met a long term investor.’” (07:25)
    • “A hedge fund leader said to me, ‘We’re profit seeking creatures. I wake up in the morning and think how much profit will I make today?’” (07:40)
• Externalities:
  • Climate and environmental costs (“externalities”) are not priced or paid by companies, even though their real costs are borne by people and the planet—with escalating bills reaching trillions of dollars.
  • “The companies don’t pay the bill... the bill’s mostly unpaid and it’s rising by the day.” (08:55)
• Long-term perspective argument:
  • For large asset owners (pension funds, sovereign wealth funds, family offices), the economic case for investing in climate solutions is clear:
    • “Unabated climate change will wipe out a quarter of global GDP. That’s five COVID pandemics. And it’s a pandemic that doesn’t go away.” (10:23)
• Practical example:
  • At Temasek, shifting to climate alignment required radically restructuring—setting internal carbon prices, rewiring staff incentives, engaging portfolio companies, and investing in sustainable businesses.

3. Policy is the "Master Switch"

Timestamp: 11:26 – 14:30

• Key point:
  • “If we want to level the playing field for climate technologies, we need long, loud legal policies. This can unlock the investment and get innovators innovating.” (11:35)
• Attributes of effective policy:
  • Long: Should match investment timeframes
  • Loud: Market signals must be clear and unmissable
  • Legal: Must have teeth; compliance should not be optional
• Free market vs. fair market:
  • “If we want a free market to be a fair market, policy is a master switch.” (12:33)
• Local examples:
  • Singapore’s carbon tax created a price signal and compelled companies to internalize carbon costs—leading to actionable decarbonization plans and linking local and global carbon markets.
  • Fast regulatory approval in Singapore for plant-based and cell-cultivated proteins has turned it into a hub for these startups, illustrating that policy can be both a carrot and a stick.
  • Efficient planning and approval processes are vital for both startups and large infrastructure projects: “Green shovels in the ground and green investment flowing.” (14:10)

4. “Better” is the Key to Rapid Scale

Timestamp: 14:31 – 17:15

• Big lesson at Ikea:
  • Pursuing "better" transforms markets. Ikea moved entirely to LEDs by aligning investments, setting targets, using purchasing power and financing, and collaborating with the supply chain—leading to a tipping point where quality, affordability, and energy savings drove mass adoption.
    • “When you get to better, you get scale really fast.” (16:00)
  • Example: Global lighting sector flipped from <1% LEDs in 2010 to >60% in 2020.
• Technologies at the “better” threshold:
  • Solar, wind, and batteries are now cheaper (“from green premium to green discount”), which unlocks further business model innovation.
  • Leapfrog example: Battery swapping for rickshaws in India—cleaner, cheaper, more efficient—shows innovation can thrive when technologies become "better" for customers.
• Barriers:
  • Capital is still scarce for emerging markets and for technologies yet to reach full commercial parity (e.g., green hydrogen, sustainable fuels, green cement/steel).
  • These industries are the future: “If you’re an investor or a policymaker, you have to know they’re the future and lean in behind them.”

Notable Quotes & Memorable Moments

• On the consequences of inaction:
  • “Unabated climate change will wipe out a quarter of global GDP. That’s five COVID pandemics. And it’s a pandemic that doesn’t go away.” (10:23)
• On policy’s importance:
  • “Policy is a master switch.” (12:33)
  • “If you’re a startup, you measure time in days and weeks, not years.” (13:46)
• On business transformation:
  • “When you get to better, you get to scale really fast.” (16:00)
• On collective responsibility:
  • “Humanity wrote the rule book. We’ve created all the markets…But if we rewire capitalism, we can help solve it—climate change.” (18:20)

Actionable Asks & Closing Thoughts

Timestamp: 17:16 – 18:52

• To policymakers:

  • Pursue “long, loud, legal” policy frameworks to make markets fair, unlock a green industrial revolution, and create future-proof jobs.

• To asset allocators:

  • Direct “patient, long-term capital” to climate solutions—not just “the easy things to do, but the hard things to do.”

• To individuals:

  • Check your pension or savings provider’s climate strategy; switch if they can’t provide a strong answer.

• To business leaders/entrepreneurs:

  • “Embrace change, unlock opportunity, and go for better.”

• Optimistic reminders:

  • Humanity has a track record of success: Ending acid rain, fixing the ozone hole, scaling solar and wind, reaching a billion households with LEDs.
  • “If we rewire capitalism, we can help solve it—climate change.” (18:20)