In this part two of our conversation – Rob de Laet reminds how nature continues to be a blindspot for us. Given his first hand experience of India – Rob shares specific insights. Despite all the challenges he lists and solutions he prescribes, It is his optimism that stands out.
“That India is not waiting for a technology. Every element is already present: the largest employment guarantee on Earth pointed at water conservation, a state that has moved nearly two million farmers into a system that uses half the water, canals refilling an aquifer in Punjab, mangrove restoration on both coasts, a city cooling model from Medellín that pays for itself in a summer. The gap is not capability and it is not even money. It is measurement, and the accounting that follows from measurement.”
Praveen Gupta (PG): You keep insisting that the road out of the climate mess runs through nature rather than through energy. Why?
Rob de Laet (RDL): Because roughly half of the machine that regulates the climate has already been dismantled, and none of it sits on anyone’s balance sheet. The living matter of this planet has fallen from something in the order of 1,100 gigatonnes of carbon before agriculture to around 550 today. Treat those as order of magnitude rather than precision, but the direction is not in dispute: we have removed about half of the living Earth.
That loss is usually filed as a carbon problem. It is not, or not mainly. Living systems do physical work on the climate every day: they evaporate water and turn sunlight into latent heat instead of hot air, they release the particles around which cloud droplets and ice crystals form, they change how much sunlight the surface reflects, and they move moisture from the ocean deep into continents. Strip the vegetation and you have not only released carbon, you have switched off machinery.
The Cooling Climate Quickly work, which I contribute to alongside Peter Bunyard and others, puts somewhere between 15 and 45 percent of today’s climate forcing down to that degradation. The band is wide because the measurement has barely been attempted. The consequence is sharper than the number: conventional carbon accounting undervalues the climate benefit of repairing a landscape by something like four to ten times.
This is not a plea to stop worrying about fossil fuels. Emissions have to come down and nothing here substitutes for that. It is a statement about time. Carbon dioxide stays in the atmosphere for centuries, so even perfect decarbonisation cools nothing this decade. The biological levers work on days, seasons and years, and they are the only fast cooling we have that does not involve gambling with the stratosphere.
PG: How fast, in practice? I have seen claims of two to four degrees of cooling almost overnight.
RDL: Then let me be careful, because that claim is often misquoted. Established forest runs two to four degrees Celsius cooler than adjacent cleared land. That is a measured difference between two surfaces, not a promise about speed. Protecting a forest delivers that difference from the day clearing is prevented, which is why protection is the fast lever. Restoration builds toward it as the canopy develops, over ten to twenty years in the tropics and longer in cooler places. Ground cover, mulch and soil work give a smaller effect much sooner, and in a hot dry landscape a smaller effect sooner is still worth having. Anyone who tells you a plantation cools a district within months is overselling, and the overselling is what gets the whole field dismissed.
PG: And the money? None of this shows up in a financial statement.
RDL: That is the whole problem, and it is a defect in the accounting rather than in the biology. Envisionation, whose Empathy Economics framework I follow closely, put it plainly: the biosphere is humanity’s primary asset, every supply chain and every balance sheet depends on it, and finance treats it as a free input. Half the asset has been consumed and nobody booked the impairment. Accept that framing and restoration stops being a cost centre with a moral justification attached and becomes the largest asset recovery opportunity available.
“Conventional carbon accounting undervalues the climate benefit of repairing a landscape by something like four to ten times… Established forest runs two to four degrees Celsius cooler than adjacent cleared land… Anyone who tells you a plantation cools a district within months is overselling, and the overselling is what gets the whole field dismissed”
What makes it investable is a unit. Carbon has one, the tonne, which is why carbon gets funded. Cooling does not, which is why it does not. The unit we argue for is watts per square metre against a stated baseline: physical, measurable from satellites and flux towers, and capturing shade, evaporation, reflectivity and cloud formation in one number instead of crediting only the carbon. Get that unit accepted and a municipality, a state or a farmer collective can raise capital against a measured result rather than queue for a grant.
India is where I would test all of it, and I would take four cases: Punjab underground, Lucknow in the street, the two coasts of the south, and the Himalayan snow. But first the thing India already has and nobody counts as climate policy.
PG: Which is?
RDL: The workforce. MGNREGA, the Mahatma Gandhi National Rural Employment Guarantee Act, guarantees a hundred days of paid work a year to every rural household as a legal right. It runs at roughly 86,000 crore rupees a year, about ten billion dollars at approximately 85 rupees to the dollar. On any given day something like fifteen million people are at work across 1.4 million sites, and a single year generates over three billion person-days of labour. Close to sixty percent of that work is already natural resource management: water harvesting, afforestation, soil improvement. More than thirty million water conservation assets have been built since 2006, and the assets are geotagged before, during and after construction.
Then the rules tightened in a way that should have made climate people sit up. In over-exploited groundwater blocks, 65 percent of the money must now go to water conservation. That points something like 35,000 crore rupees a year straight at rehydrating the Indian landscape. Nearly five lakh water works were completed in a single year.
Read that as a climate programme and it is remarkable. India is already paying millions of people to do precisely the work that cools and rehydrates land. Two things are missing. Nobody measures the cooling that work produces, so it is invisible to climate finance and therefore unfunded by it. And the wage is low. Measure the output properly and pay for it from climate capital rather than the rural development budget alone, and India has the largest planetary cooling programme on Earth, already staffed. For scale: half a percent of global gross domestic product is roughly fifty-four MGNREGAs. India has proved that one of them can be built and run.
The return profile is the part usually missed. This is not a cost with a climate benefit bolted on. It rebuilds soil, water cycles, biodiversity and food security, and pays several hundred million rural households while doing it. Solar radiation management gives a community nothing locally, and neither does carbon capture. Emissions reduction gives diffuse global benefits and imposes local costs. This is the only intervention where what is good for the family doing the work is also what is good for the planet.
Sources: Union Budget allocation of Rs 86,000 crore for FY 2024-25 and FY 2025-26; 309.2 crore person-days in FY 2023-24; approximately 15 million workers daily at 1.4 million sites; roughly 60 percent of works under natural resource management; over 30 million water conservation assets since 2006; Ministry of Rural Development 2025 amendment to Schedule I mandating 65 percent of expenditure to water conservation in over-exploited and critical blocks, 40 percent semi-critical, 30 percent safe; nearly 5 lakh water works completed in 2024-25 at Rs 17,889 crore. The 0.5 percent of global GDP estimate is from Cooling Climate Quickly v10h. Budget figures change annually and should be checked against the current year before use.
PG: And you single out Andhra Pradesh?
RDL: Because Andhra Pradesh has already shown that a transition of this kind can be delivered by a state, at scale, without a permanent subsidy holding it up. Community Managed Natural Farming now reaches more than 1.77 million farmers across some 920,000 hectares. Most are women, around ninety percent are small and marginal holders. Farmer incomes are up 38 to 66 percent, water use down by as much as half. Input costs fall while yields hold or rise, which is why the change sticks. The state puts its own return at six to eight dollars for every dollar invested. It won the Gulbenkian Prize for Humanity in 2024 and the Food Planet Prize in 2026.
“India has the largest planetary cooling programme on Earth, already staffed. For scale: half a percent of global gross domestic product is roughly fifty-four MGNREGAs. India has proved that one of them can be built and run”
What nobody has measured is what a million transitioned hectares has done to the surface temperature and the water balance of Andhra Pradesh. My own suggestion for making it cooler still would be to raise the number of useful trees inside the system, because canopy is what turns a cooler field into a cooler district. This programme is the clearest example anywhere of the gap we are trying to close, and it is the best place in the world to close it. You can fight heat, drought and extreme rainfall damage, raise food and water resilience, and cool the region, all at once. Now measure it, and the scaling becomes investable.
PG: Let us take your four cases. Punjab’s aquifers, the heat in Lucknow, floods in Kerala. Are these separate problems?
RDL: They look like three problems and they are one, seen at three points in the water cycle: a landscape that has lost its ability to hold water and to move it. Vegetation is the biological regulator of that cycle, and the principle is simple. Do not let water run off easily. Make it travel through soil, through aquifers, through roots, up through the canopy, where it cools and makes cloud and rain.
PG: Shall we start with Punjab?
RDL: Punjab pumps more groundwater than any state in India, around 164 percent of annual recharge against a national average near 59. The engine is free farm electricity, some 10,000 crore rupees a year for tubewell power, and the subsidy is highest per acre in exactly the districts where the aquifer is emptiest. As the water table drops, pumps lift further and cost more, so the bill grows with the damage it causes, and it peaks with paddy transplanting on a grid already close to 17,500 megawatts.
The part missing from the agricultural accounts is the heat. Evaporative cooling runs on plant-available water. When the water table falls beyond root reach and the crop shuts its stomata to survive, the sunlight that had been evaporating water heats air instead. The cooling stops on precisely the days heat is doing most damage. The land becomes hotter because it has become drier, and drier partly because it has become hotter.
The encouraging half is that Punjab has begun refilling. Canal coverage has gone from about 26 percent of the state in 2022 to a reported 78, with the Kandi Canal running after forty years out of service. Canal water does two jobs at once: every litre delivered is a litre not pumped, and seepage recharges the aquifer on the way. The Board now reports 74 blocks improving and 57 percent of monitored wells standing higher than a decade ago.
Recharge alone cannot close it. The gap is around eleven billion cubic metres a year, needing roughly a 39 percent cut in extraction or a 64 percent rise in recharge, so the demand side still has to move, through direct-seeded rice, delayed transplanting and eventually diversification out of paddy. The way to make that survivable is to change what the subsidy buys, paying for water saved rather than electricity consumed, and to build the recharge with labour that is already funded, since MGNREGA must now put 65 percent of its spending in over-exploited blocks into water conservation, and almost all of Punjab qualifies.
“Medellín built its Green Corridors for about sixteen million dollars, with under a million a year to maintain, and brought city temperatures down by two to three and a half degrees within three years. If Lucknow did the same, the quantified benefits would repay the whole installation inside a single summer, in roughly six to thirteen weeks”
Measure the result in watts per square metre and the prize becomes visible. When the aquifer returns within root reach, transpiration returns and the surface cools. One intervention lowers the subsidy bill, cuts the summer peak, raises farmer margins, refills the aquifer and cools the land. Five ministries want the same thing and none of them has noticed.
Sources: Central Ground Water Board, Dynamic Ground Water Resources of India, 2023 and later; PSPCL and PSERC tariff orders via the Indian press; Gupta (2023), Agricultural Economics; Punjab canal-coverage figures via SANDRP. Canal and extraction figures are government claims from 2025 to 2026 and move quickly; check before quoting.
PG: Second case, Lucknow. What is a cooler city actually worth?
RDL: Take one Indian city and ask what it would be worth to drop the peak temperature by five degrees. I should say plainly that what follows is a quick back-of-envelope estimation, so do not trust the numbers, trust the direction of travel. Even so, the size of the prize is startling.
Lucknow’s summer peak electricity demand is running toward 2,000 megawatts, and cooling accounts for roughly a third of it. Drop the outdoor temperature five degrees and two things happen at once. Heat crossing the walls of every building falls by about a quarter, and every air conditioner in the city runs more efficiently at the same time. Below thirty-eight degrees, many households switch the air conditioner off and the fan on. Together that takes 150 to 250 megawatts off the peak and around 500 gigawatt hours off the year.
That electricity carries three separate values, and only the first is usually counted.
The third row is the one Indian planners should study hardest. Grid collapses are not caused by average demand. They are caused by the last few percent of load at the peak. Removing 200 megawatts from a 2,000-megawatt peak is a ten percent cut at exactly the hour the system is closest to failing, in a state with a chronic history of summer load-shedding and a place in the largest blackout in history.
“India, with the Ghats and two contrasting coasts… A coastal community protecting mangrove, a hill farmer restoring infiltration and a dryland farmer planting shade are all producing the same service at different points in the same conveyor”
Now the cost. Medellín built its Green Corridors for about sixteen million dollars, with under a million a year to maintain, and brought city temperatures down by two to three and a half degrees within three years. If Lucknow did the same, the quantified benefits would repay the whole installation inside a single summer, in roughly six to thirteen weeks. On electricity and carbon alone, ignoring the grid entirely, payback is still under five months.
And none of that counts what matters most: the heat deaths avoided, the hospital admissions, the outdoor labour hours not lost, the children who can sit an exam in May. In the Medellín literature those benefits are typically larger than the electricity savings, and they land on the poorest households first, because they are the ones without air conditioning.
Then multiply. India has dozens of cities in Lucknow’s class. Twenty of them would cost around 330 million dollars to green at Medellín prices and would return somewhere between 1.3 and 2.7 billion dollars a year, cut six to ten million tonnes of carbon dioxide annually on the demand side without building a single new power station, and take three to five gigawatts off the national summer peak. That is a meaningful share of the shortfall the National Load Despatch Centre has flagged for high-risk summer months.
PG: Is it all about trees?
RDL: No, and the physics is not complicated. A white roof coating returns 130 to 210 watts per square metre straight back to space, costs very little, and can be applied in one season by residents themselves. Roofs are twenty to thirty percent of a city’s surface, which makes reflective roofing the single largest district-scale lever available. Trees do something different and equally necessary: they cool at the height where people walk, dropping pavement surface temperature by fifteen to twenty-five degrees. Water harvesting, permeable paving and restored drains supply what the trees run on, because a tree is a machine for turning water into cooling and without water it is a stick. So: reflective surfaces where nobody stands, shade where people do.
The last piece is the one we are building. None of this cooling is currently measured in a way a financier can price. The electricity saving surfaces on a distribution company balance sheet months later, the carbon is not a registered methodology under India’s Carbon Credit Trading Scheme, and the avoided blackout never appears at all. Measure the cooling directly, in watts per square metre against a stated baseline, and a municipality can raise capital against it instead of waiting for a grant. That is the difference between a nice park and a piece of climate infrastructure with a balance sheet behind it.
Electricity, carbon and grid figures from the Lucknow pilot estimation, April 2026, drawing on UPPCL, the Central Electricity Authority, the National Load Despatch Centre Short-Term Resource Adequacy Plan 2025, and Medellín Green Corridors reporting. Roof albedo and canopy figures from the cities workstream paper. All figures are order-of-magnitude estimates with wide uncertainty, particularly the grid-reliability row; the electricity saving is the most robust. Carbon value assumes $30 a tonne, above current Indian compliance prices, and cannot be both counted toward India’s Nationally Determined Contribution and sold as an offset without a corresponding adjustment.
PG: Third case, the South. Kerala drowns, interior Karnataka dries?
RDL: Two problems on paper, one system in reality. South India is usually described as having too much water on the windward side of the Ghats and too little on the leeward side, with the rain shadow of interior Karnataka now showing genuine desertification. It is one landscape that has lost the ability to move water from where it lands to where it is needed, and the same design that fixes one end fixes the other.
“Put a physical unit on cooling and rehydration, book the biosphere as the asset it is, and every one of these programmes stops being a welfare line item and becomes infrastructure with a return. The country that does this first will not only cool itself, it will write the standard everyone else has to adopt. India is the obvious candidate”
In a concept note I presented to civil servants at the Ministry of Environment in Kerala, called Balancing the Waters, I argued that continuous forest draws ocean moisture inland and that forest aerosols turn that moisture into rain. What follows adds the piece sitting upstream of that, and the reason the two ends of the Ghats are one design problem rather than two engineering ones.
The coast is the ignition, not a corridor
A tropical coastal morning follows a schedule. Land warms faster than sea, thermal contrast builds, and by mid-morning a sea breeze carries humid marine air inland. Cloud builds through the middle of the day and by mid-afternoon it rains. Anyone on the Kerala coast decades ago will remember how regular that clock was. The energy comes from the ocean. What the coastal land supplies is the trigger: the thermal contrast that drives the breeze, the roughness that helps the front converge, and enough near-surface moisture to keep the condensation level low so cloud forms early rather than late.
Mangroves prepare the sky
Mangrove and estuarine systems release four things that seed cloud, none of which appears in a water management plan. Anoxic sediments bathed in seawater sulphate produce dimethyl sulphide, ventilated on every tidal cycle, the same chemistry that makes marine cloud over the open ocean, here concentrated into a narrow band and pumped twice a day by the tide. Isoprene and other biogenic volatiles oxidise into the aerosol that droplets condense on. Bacteria, spores and organic fragments mobilised by wave action nucleate ice at temperatures where mineral dust does nothing, which decides what falls as rain rather than passing overhead. And sea salt lofted from a rough vegetated shoreline carries a different size distribution from salt off a bare one, which changes droplet size.
The chemistry is well grounded. The fluxes are not yet measured and I would attach no number to them. But the direction is clear. A living coastline prepares the sky, and the rain that follows falls in more regular patterns inland, in waves, with part of it drawn over the Ghats provided the ridge tops carry native forest, so that not everything rains out from orographic forcing and some is pulled across into Karnataka. Fewer floods on one side, more rain on the other.
Sealing the coast dries the interior
Roofs, roads and hard drainage change all three triggers at once. A vegetated coastal plain runs a Bowen ratio around 0.3 to 0.5; sealed surface runs 2 to 5. Latent heat collapses, near-surface air becomes hotter and drier, and the lifting condensation level rises, on rough figures from around 600 metres to well over 1,200. The trigger fires later and less often, and when it fires the cloud must grow deeper before it precipitates. That is the cloudburst pattern which has been steadily worsening Kerala’s floods, and it is the same mechanism that starves the interior: the same annual rainfall arriving in fewer, heavier events on the coast, and less of it carried over the crest. Kerala’s floods and Karnataka’s drying are two readings of one broken conveyor.
The design that balances them
Read as one system, the interventions stack in sequence rather than compete for funding. A living coastal band restores the ignition and the cloud chemistry. Continuous windward forest on the Ghats does the lifting and the moisture recycling. Restored infiltration on the slopes converts a flood into base flow, which is what made the Cauvery perennial in the first place. Agroforestry, tank restoration and soil rebuilding on the leeward plains catch and hold what arrives, so each rainfall event recharges rather than runs off.
Every one of those steps is already being done somewhere in South India. What is missing is that they are planned as separate programmes in separate departments, and none is credited with what it delivers to the next link in the chain. Tamil Nadu’s mangrove restoration at Pichavaram and Muthupet is funded as coastal protection and biodiversity. Nobody credits it with rain falling two hundred kilometres inland. Kerala’s Kuttanad and Vembanad work, Cauvery Calling, tank restoration across Tamil Nadu and Karnataka: all pointing the same way, none of it wired together.
The measurement that makes it plannable, and financeable
This is testable now, on free public data. A forty-year global mangrove extent record was published in Science in June 2026, and geostationary satellites give ten-minute cloud and rainfall imagery over the Indian coast going back decades. Compare stretches of coast that lost mangrove with stretches that did not, measure the hour of first cloud, the hour of peak rainfall and the variance of onset across a season, and control for sea surface temperature and inland land use. If convective onset tracks mangrove loss after those controls, the coastal trigger has an observational anchor at regional scale.
“Carbon dioxide stays in the atmosphere for centuries. Soot stays for about a week. Clean up the sources and the snow gets whiter in the same season. It is one of the very few climate levers where you see the result in your own lifetime rather than your grandchild’s”
India, with the Ghats and two contrasting coasts, is the best place on Earth to run that test. Once cooling and moisture delivery are measured in a common physical unit, the chain can be financed as one asset rather than eight grants. A coastal community protecting mangrove, a hill farmer restoring infiltration and a dryland farmer planting shade are all producing the same service at different points in the same conveyor. Pay them as though that were true and the two water problems of South India become one solvable design question.
Sources used: Cooling Climate Quickly v10h (energy hierarchy, degradation share, the 0.5 percent of global GDP estimate, the UNEP Adaptation Gap Report finance shortfall of 187 to 359 billion dollars, and the alignment-of-scales argument); Shahid 2026 for the surface-to-atmosphere transfer fraction; the cities workstream paper for roof albedo figures. Check each against the current version of the source before publication.
PG: Fourth case, the Himalaya.
RDL: The melting of the Himalayan glaciers will be a very large water availability problem decades from now, and the snow is disappearing for two reasons. The first is heat, which is about global emissions and which nobody fixes overnight. The second is dirt. Soot from brick kilns, cookstoves, diesel and crop burning settles on the snowpack and turns it grey. Grey snow absorbs sunlight instead of reflecting it, so it melts faster. That part is fixable.
The striking thing is the speed. Carbon dioxide stays in the atmosphere for centuries. Soot stays for about a week. Clean up the sources and the snow gets whiter in the same season. It is one of the very few climate levers where you see the result in your own lifetime rather than your grandchild’s. It will not save the glaciers on its own, nothing local will, that takes cutting emissions. But it buys time for two billion people who depend on that snow for their water, and buying time is not nothing.
A subplot of the same story is glacial lake outburst floods (GLOFs) which can be reduced with simple and affordable measures. Kedarnath in 2013 and the Sikkim disaster more recently are the kind of event where cheap engineering and monitoring would have changed the outcome.
PG: If an Indian reader takes one thing from this, what should it be?
RDL: That India is not waiting for a technology. Every element is already present: the largest employment guarantee on Earth pointed at water conservation, a state that has moved nearly two million farmers into a system that uses half the water, canals refilling an aquifer in Punjab, mangrove restoration on both coasts, a city cooling model from Medellín that pays for itself in a summer. The gap is not capability and it is not even money. It is measurement, and the accounting that follows from measurement.
Put a physical unit on cooling and rehydration, book the biosphere as the asset it is, and every one of these programmes stops being a welfare line item and becomes infrastructure with a return. The country that does this first will not only cool itself, it will write the standard everyone else has to adopt. India is the obvious candidate.
General note on figures: numbers in this interview are drawn from Cooling Climate Quickly v10h, Indian government sources and the estimations described above. Several are order-of-magnitude estimates, several change annually, and I would ask any reader intending to quote them to check the primary source first.
PG: These excellent insights ought to be music to everyone’s ears, Rob. Next, this should also be falling on the right ones. Thanks so much. Hoping to see you in India, soon!
LinkedIn link to Rob’s post: https://www.linkedin.com/feed/update/urn:li:activity:7494044936250699776/
August 15, 2026
To illuminem page: The global economy cannot outrun climate change, so neither can our investments | illuminem
August 17, 2026
Rob de Laet is a philosopher, climate activist, rewilding a damaged part of the Brazilian rainforest and working to avert the dieback of the Amazon Rainforest by strengthening the biotic pump over the area. Co-author of the book ‘Cooling the Climate – How to Revive the Biosphere and Cool the Earth Within 20 Years’.
As a principal member of the EcoRestoration Alliance and fellow of the Global Evergreening Alliance, Rob is developing the Cooling the Climate project together with Peter Bunyard and others, to reverse the climate crisis fast, working from the Lovelockian Gaia perspective to restore the Earth’s metabolisms through the restoration of the water cycles and regeneration of the biosphere.
Three tipping points need to be averted fast to avoid wholesale civilizational collapse, emphasies Rob: the dieback of the Amazon Rainforest, the collapse of ocean biology and the collapse of Arctic Sea ice. This can be done if the world wakes up and acts at the speed and scale needed. For the first tipping point, Rob designed the ARARA digital-financial platform and project to scale forest protection and regeneration.
Praveen Gupta (PG): Earth’s air conditioners are breaking down?
Rob de Laet (RDL): They are, and the phrase is close to literal rather than metaphorical. A large tree in a tropical forest transpires hundreds of litres of water a day, and the cooling that produces is roughly equivalent to several household air conditioners running continuously. Multiply that across a forest and you have a natural cooling mechanism of enormous capacity, running on sunlight and available water.
We have destroyed a large part of that capacity. Our own analysis puts ecosystem degradation at somewhere between 23 and 38 percent of total human forcing on the climate, and there are around two billion hectares of degraded land where that capacity could be rebuilt. More than half of that is in the tropics. Clearing a tropical hectare reduced that cooling capacity dramatically (the cooling goes down by roughly forty watts per square metre).
Set that against the global 2.72 watts per square metre of total human forcing and you see the scale of what is being left out of the accounts. The result shows up as hotter surfaces, disrupted rainfall and expanding heat domes. The tropics hold well over half the restorable land and close to four fifths of the cooling that restoring it would recover. A hectare restored in India or Indonesia or Brazil does roughly ten times the climate work of a hectare restored in Finland.
What makes this more than a nice image is that the loss is both huge and quantifiable. That is not a footnote to the carbon story. It is a comparable term, and it is the only part of the problem that can be reversed upward on a decadal timescale rather than a centennial one, which goes for CO2. So the question is not whether the air conditioning is failing. It is whether we are going to keep pretending the building only has a heating problem through GHGs or also a cooling problem through the breakdown of ecosystems, particularly in the tropics.
PG: Cloud formation, evapotranspiration and biological aerosol production are fast-acting climate levers that carbon accounting simply cannot see. Would you please explain?
RDL: Carbon accounting measures a stock: how many tonnes are stored in wood and soil. However, these three are flows. They are things a living landscape does every day, and a stock-based instrument is structurally incapable of seeing them.
Look at the energy involved. Carbon stored in the biomass of a tropical hectare is worth roughly half a watt per square metre of avoided forcing. The evaporation happening on that same hectare moves about eighty watts per square metre off the surface. The sunlight its canopy and the clouds above it reflect is worth about a hundred. We are pricing the smallest number in the stack, and we are pricing the slowest one.
“A large tree in a tropical forest transpires hundreds of litres of water a day, and the cooling that produces is roughly equivalent to several household air conditioners running continuously“
Each of the three works differently. Evapotranspiration converts heat into water vapour and carries it upward. Some of that heat is released above most of the greenhouse layer and radiates to space, which is a genuine planetary loss rather than a local rearrangement. Satellite data calculations by Ali Bin Shahid this year puts that fraction at between 13 and 21 percent, which is the first observational constraint we have on it.
Biological aerosols are the strangest of the three. Forests emit volatile compounds, spores and bacteria that act as the nuclei clouds condense around. Forests are, in a real sense, seeding their own weather. And clouds are the most powerful shortwave lever on the planet, because a cloud returns sunlight to space before it ever becomes heat.
None of this is exotic physics. It is the standard surface energy balance. It is simply not in the accounts.
PG: Biophysical cooling from ecosystem restoration is at least 3 times carbon sequestration on the critical 10 to 20 year timescale, with restored ground cover delivering 2 to 4 °C of local surface cooling in hot areas or hot months?
RDL: The multiplier is right, and I should say up front that it is our own number. We took the biophysical cooling from restoring two billion hectares, compared it with the carbon those same hectares would store over ten to twenty years, and the cooling came out two to four times larger. The physics is standard. What was new is that nobody had put the two side by side.
Here is the simplest way to see why. Carbon is a bank deposit. A young tree puts a little away each year, and after twenty years there is a useful sum. Cooling is a machine that is running now. The moment the leaves are there, they are pumping water into the air and pushing heat off the surface. Over ten or twenty years, which is the window that actually matters to us, the machine has done far more work than the deposit has accumulated. That is the whole gap.
The 2 to 4 degrees is the difference between a standing tropical forest and the bare ground next to it. It belongs to a canopy that has closed over. Ground cover, mulch and soil work do cool, and they cool within a season, but by less. Peak temperature differences can even be larger.
That distinction matters, and not only to scientists. If you protect forest that is already standing, you keep the full 2 to 4 degrees till you cut it. This is extremely valuable natural climate infrastructure. If you replant you get the effect again after new canopy grows, and that takes ten to twenty years in the tropics and longer in cooler places. That is why we need a 100% moratorium on remaining old growth forests NOW!
Planting matters enormously. It is just the second thing you do, not the first.
PG: The best course of protecting assets from stranding is to upgrade the planet?
RDL: The stranded asset conversation has been almost entirely about coal and oil reserves, and that framing is far too narrow. Every financial asset is ultimately a claim on a functioning biosphere. A mortgage assumes the house stays insurable. A sovereign bond assumes the country can feed itself. A food company’s valuation assumes the rain arrives roughly when it used to.
PwC put a number on that in 2023: 55 percent of world GDP, around 58 trillion dollars, is moderately or highly dependent on nature. They also found that more than half the market value of listed companies across nineteen major stock exchanges is exposed to material nature risk. That is not a sector. That is the market.
What makes this concrete rather than theoretical is that the largest investor in the world has now said it in its own disclosures. Norway’s sovereign wealth fund publishes a climate and nature report every year. Three things in the 2024 edition are worth knowing.
“A restored watershed produces water, food, timber and a cooler working landscape while it is protecting your balance sheet”
First, they ran two different models on the same portfolio and got answers ten times apart. Their bottom-up model said physical climate risk would cost their US equities about 2 percent of present value. Their own top-down model said 19 percent, and 27 percent at the tail. They state plainly that they believe the higher number is the more credible one.
Second, and this is the part that matters most to me, they list what neither model includes. Tipping points. Cascading effects. Feedback loops between the climate and the carbon cycle. And, in their own words, climate impacts on natural resources and ecosystem services. The world’s largest fund is telling you, in a published document, that the collapse of the systems we are talking about is simply absent from its risk models.
Third, they tested one small piece of it. They modelled what happens if just three ecosystem services fail by 2030: wild pollinators, timber, and marine fisheries. Three, out of dozens. The answer was about 2 percent of global GDP, some 1.7 trillion dollars, and a 4 percent hit to their own equity holdings. Their chief executive summarised the whole thing in one line: the global economy cannot outrun climate change, so neither can our investments.
So the conclusion sounds strange in a finance meeting and is arithmetically ordinary. There is no sector to rotate into. You cannot diversify away from the biosphere, because every position you hold is written against it. Repairing it is not an ethical add-on to a portfolio. It is the cheapest available way to protect the collateral behind everything you already own.
And unlike most climate spending, it is not a pure cost. A restored watershed produces water, food, timber and a cooler working landscape while it is protecting your balance sheet. You are not buying a green asset. You are repairing the ground the whole portfolio stands on.
PG: We need less than one percent of global GDP to repair the planet? The largest investment after AI?
RDL: Our estimate is around half a percent of global gross domestic product, annually, for twenty years. That is roughly 550 billion dollars a year. A key part of what it buys is support for something like five hundred million smallholder and Indigenous families, who between them steward around a billion hectares, to move to regenerative agriculture and to protect and restore forest and other biomes.
They need to be paid to protect and restore. And let me add one more warning here: agriculture is not something you can learn overnight and everywhere the people working the fields are getting old or leaving for the cities. Food does not grow in supermarkets. But let me get back to the question.
Set that half percent against the shortfall the United Nations Environment Programme (UNEP) already reports for nature-based adaptation finance, which is somewhere between 187 and 359 billion dollars a year. This is not a novel category of spending. It is closing a gap everyone already acknowledges, and getting considerably more for it than adaptation alone.
PG: We desperately need to cool down our planet. I must congratulate you for the brilliant work at the EcoRestoration Alliance and your leadership. Looking forward to your first hand insights on India.
PS: The title is an extract from a quote by the Norwegian Sovereign Fund CEO – Nicolai Tangen!
Sanctuary
August – September, 2026
Link to the article: We Are At The Apex Of A Cliff
LinkedIn post: https://www.linkedin.com/feed/update/urn:li:activity:7494588875198332928/
Pleased to share my feature article ‘We Are at the Apex of a Cliff’ for Sanctuary Asia: August – September 2026 issue. (Link in the comments).
Civilisations thrived in a “goldilocks phase,” but unchecked #greed and #arrogance now threaten planetary balance that we continue taking for granted. Humanity risks losing biodiversity’s “free ecological services.”
Experts urge imagining a post‑Anthropocene world where #coexistence with #nature is central to survival. We must abandon our apex-species arrogance, value across life forms, and urgently redesign economies to align with nature. Unless we wish #extinction and #ecologicalcollapse to define our legacy.
TOI Blogs
July 26, 2026
Link to the full Op-ed: https://timesofindia.indiatimes.com/toi-blogs/money-matters/risk-of-skipping-the-hard-part-of-change-management/articleshow/132636139.cms
Judy Lu recently completed her PhD at Henley Business School, where her research explored how organisations learn from shareholder activism and how these learning processes influence corporate governance and long-term organisational adaptation. Her work bridges academic research and business practice, with a particular focus on corporate governance, sustainability, shareholder management, and organisational learning.
Alongside her academic achievements, Judy is Associate of the Chartered Insurance Institute (CII) and has built a successful career spanning nearly two decades in multinational insurance. As a Multinational Network Manager at QBE Insurance, she has developed deep expertise in global insurance programmes, international insurance regulations, local market practices, and cross-border insurance solutions. This frontline experience has given her a deep understanding of enterprise risk management, international business operations, and capital optimisation, providing valuable practical insights that complement her academic research.
She is passionate about translating rigorous academic research into practical insights for businesses, demonstrating how organisations can turn external pressures – such as shareholder activism – into opportunities for organisational learning, stronger corporate governance, and sustainable long-term value creation.
Praveen Gupta (PG): What is the relationship between organisational learning and shareholder activism?
Judy Lu (JL): Organisational learning is closely linked to shareholder activism because activism acts as an external feedback mechanism that triggers firms to reassess and adjust their governance and strategic practices. Although shareholder proposals are not legally binding, firms cannot ignore them due to reputational, market, and stakeholder consequences. These pressures incentivise firms to learn from activism experiences in order to reduce future targeting. My thesis shows that this learning occurs not only through direct activist engagement but also through observing peer firms and industry-wide activism trends. Overall, shareholder activism functions as both a governance monitoring tool and an organisational learning mechanism that shapes how firms adapt over time.
PG: Did you focus on any particular geography, segments and timeline?
JL: I focus on US Russell 3000 firms from 2006 to 2020 using ISS Voting Analytics data across 68 industries. The US is a leading market for shareholder activism with strong institutional investor participation and well-developed governance mechanisms, making it an ideal setting to study activism behaviour. The Russell 3000 allows me to capture a broad cross-section of firms, including large and small companies, which is important for analysing heterogeneity in learning and responses. The 2006 – 2020 period covers the post-financial crisis expansion of governance activism and the rise of Environment Social & Governance (ESG) and Socially Responsible Investing (SRI) activism, allowing me to study evolving patterns over time.
“Shareholder activism functions as both a governance monitoring tool and an organisational learning mechanism”
PG: How do firms and boards adapt to activism pressures?
JL: Firms and boards adapt to shareholder activism through three main channels: direct experience, peer observation, and governance transformation. First, firms learn from their own activism exposure, which reduces the likelihood of future targeting, particularly in governance-related activism. Second, firms also learn vicariously from peers, with an inverted U-shaped pattern showing that industry-wide activism initially increases exposure but eventually leads to adaptation and reduced targeting. Third, at the board level, activism and governance co-evolve: governance activism is associated with increases in board independence, while board characteristics also influence future activism. However, these learning and adaptation processes are conditional on firm size, age, and industry context. In summary, adaptation to activism is dynamic and multi-layered rather than uniform, involving both behavioural learning and structural governance change.
PG: In what ways is shareholder activism both a challenge and a catalyst for organisational learning and corporate governance change?
JL: Shareholder activism is both a challenge and a catalyst for organisational learning. As a challenge, it acts as an external governance mechanism that exposes weaknesses in boards, management, and corporate practices, increasing reputational and monitoring pressure. But it is also a catalyst for learning, because firms do not just react once – they learn from their own activist experiences and from observing peer firms. My findings show that activism creates cumulative learning processes, where prior exposure reduces future targeting and peer experiences shape industry-wide behaviour through spillover effects. Importantly, these effects vary across governance and SRI activism and across different types of firms. Therefore, activism functions not just as an intervention, but as an ongoing information environment that drives continuous governance adaptation.
“Activism creates cumulative learning processes, where prior exposure reduces future targeting and peer experiences shape industry-wide behaviour through spillover effects”
PG: Whether and how companies targeted by shareholder activism learn from prior experiences?
JL: Yes, companies do learn from prior shareholder activism, but the learning effects are not consistent across all firms. I find that firms with previous activism experience are significantly less likely to be targeted again, suggesting they implement governance or strategic changes that reduce future activism. However, learning is contingent on both the type of activism and firm characteristics. Governance activism generates stronger learning because it addresses core governance issues that firms can respond to relatively quickly.
In contrast, learning from SRI activism is more limited because environmental and social changes often require longer-term organisational transformation. I also find that smaller firms, older firms, and firms in non-environmentally sensitive industries exhibit stronger learning in different contexts. To sum up, organisational learning from shareholder activism is heterogeneous rather than uniform, demonstrating that firms’ ability to learn depends on their organisational characteristics and the nature of the activist demands.
PG: Vicarious learning was also part of your study. What were the findings?
JL: The key finding is that firms learn vicariously from the shareholder activism experiences of their peers. I found an inverted U-shaped relationship between peer activism and subsequent activism. Initially, as activism increases within an industry, firms are more likely to be targeted by the shareholder activists. However, over the time despite a continued increase in industry-wide activism, firms demonstrate a reduction in their activism levels. This nuanced finding underscores the complexity of how firms assimilate and respond to the activism experiences of their peers.
I also found that firms do not learn only from better-performing peers, as the performance gap was not significant. This suggests that shareholder activism functions as an industry-wide information environment, where firms learn broadly from peer experiences rather than selectively from financially superior firms.
“Shareholder activism functions as an industry-wide information environment, where firms learn broadly from peer experiences…”
PG: Why do you need to distinguish between governance activism and SRI activism?
JL: I distinguish between governance activism and SRI activism because they differ in their objectives, historical evolution, and the mechanisms through which they influence firms. Governance activism focuses on traditional governance issues such as board independence and executive compensation, whereas SRI activism addresses broader environmental and social issues. These differences mean that firms learn from them differently. My findings confirm this: governance activism can influence governance structures, particularly board independence, while SRI activism primarily targets firms that already possess stronger diversity characteristics rather than creating demographic change. Separating the two therefore reveals heterogeneous learning processes and governance outcomes that would be hidden if shareholder activism were treated as a single construct.
PG: How significant were ESG and DEI in your study?
ESG and DEI are significant themes in my thesis, but they are not the primary phenomenon under investigation. The central focus of my research is shareholder activism and how firms learn from activism over time. ESG and DEI provide the governance context through which these learning processes operate, particularly in my third empirical study.
In the third study, I investigate the reciprocal relationship between activism and DEI-related board characteristics over time. My findings demonstrate that ESG and DEI matter in two important ways. First, they influence activist targeting. Firms with more gender and ethnic diversity are more likely to attract subsequent SRI activism, suggesting that activists perceive these firms as more receptive to ESG-related engagement rather than using activism primarily to create diversity. Second, activism itself has different capacities to influence governance outcomes. Governance activism can produce modest improvements in board independence, whereas demographic diversity changes much more slowly, indicating that structural governance reforms are more responsive to activism than demographic characteristics.
ESG and DEI help explain why activism should not be treated as a single homogeneous phenomenon. Different activist objectives interact with different governance dimensions, leading to distinct patterns of corporate adaptation and learning.
“Structural governance reforms are more responsive to activism than demographic characteristics”
PG: What would you say are the key learnings from your thesis – for managers, investors and policyholders?
JL: The findings suggest that shareholder activism should be understood as an ongoing governance process rather than a one-off event. For corporate managers, the key implication is that activism provides continuous learning opportunities. Firms that treat activist interventions as signals of governance expectations – both from their own experience and from peer firms – are better able to strengthen governance structures, improve stakeholder engagement, and reduce future vulnerability to activism. Managers need a balanced approach: selectively learning from activism while maintaining firm-specific strategies. The evidence also highlights that governance activism is more effective in driving changes in board independence than demographic diversity, while SRI activism tends to focus on already diverse firms, suggesting boards must ensure diversity translates into substantive governance outcomes rather than symbolic representation.
For investors, the key message is that activism history and responsiveness are important signals of governance quality. Firms that learn from activism tend to demonstrate stronger managerial accountability and lower long-term governance risk. Importantly, activism also generates information spillovers, meaning peer responses within industries are informative for assessing broader governance quality.
For policymakers and regulators, the findings show that shareholder activism complements formal regulation by supporting market-based governance and organisational learning. Policies should therefore enhance transparency and disclosure so that firms and investors can learn from activism outcomes, while avoiding herd-like or symbolic compliance. At the same time, regulators should recognise that board diversity alone does not guarantee effective governance, and focus instead on ensuring that diversity leads to meaningful oversight.
PG: Could you give examples of companies that did well or not so well regarding shareholder activism, learning from peers or DEI?
There are several good examples that illustrate the patterns identified in my research.
One of the strongest examples is ExxonMobil. In 2021, activist hedge fund Engine No.1 succeeded in electing three directors to Exxon’s board despite owning only a very small stake. This became one of the defining examples of shareholder activism influencing corporate governance and climate strategy. From my research perspective, it demonstrates that activism can act as an external learning mechanism, forcing boards to reassess governance practices rather than simply responding to a single proposal. Interestingly, subsequent research has shown that markets generally viewed the board changes positively, particularly for firms facing environmental risks.
A second example is Disney. In 2024 Disney successfully resisted activist investor Nelson Peltz’s board challenge after making strategic and governance changes ahead of the proxy contest. Although management prevailed, the campaign arguably accelerated governance improvements and shareholder engagement, illustrating that firms often adapt before activism succeeds formally.
“Firms benefit from organisational learning because improving governance and transparency early may reduce both activist pressure and future litigation risk”
Looking specifically at DEI, Disney also provides an interesting recent example. In 2025 shareholders overwhelmingly rejected a proposal asking the company to withdraw from the Human Rights Campaign’s Corporate Equality Index. This suggests that even during a period of political backlash against DEI, many shareholders still distinguish between ideological debates and long-term governance considerations.
My research would interpret these cases as evidence that activism is rarely about “winning” or “losing”. Rather, it creates an information environment that encourages firms to reassess governance, anticipate stakeholder expectations, and learn from both their own experiences and those of their peers.
PG: Did you come across any class action suits and trends that relate to your study?
JL: Although class action litigation was not the focus of my thesis, there are interesting connections. Both shareholder activism and securities class actions are external governance mechanisms that increase managerial accountability, although they operate differently.
Activism is generally forward-looking. Investors seek governance reforms, board changes or strategic improvements while remaining shareholders.
Class actions are generally backward-looking. They seek compensation after alleged disclosure failures, securities fraud or governance failures have already occurred.
Increasingly, however, both mechanisms intersect around ESG and disclosure quality. For example, companies now face litigation relating to alleged “greenwashing” or misleading ESG disclosures. These cases reinforce one of my central arguments: firms benefit from organisational learning because improving governance and transparency early may reduce both activist pressure and future litigation risk.
“Issues such as climate risk, cybersecurity, human capital, supply chain resilience and board oversight remain material business risks regardless of political trends”
PG: Any noticeable shift between Trump 1.0 and 2.0?
JL: My data ends in 2020, so I cannot make empirical claims beyond that period. However, viewed through the organisational learning framework, the environment has clearly evolved.
During the latter part of my sample and into the Biden administration, ESG and DEI became increasingly prominent topics for shareholder proposals. More recently, under the return of the Trump administration, the emphasis has shifted. Rather than simply seeing more ESG proposals, we are also seeing more anti-ESG and anti-DEI shareholder proposals.
What is interesting is that shareholder activism itself has not disappeared. Instead, the issues being contested have changed. Activism remains a mechanism through which investors express competing views about long-term corporate strategy.
This actually reinforces one of the broader conclusions of my thesis. Organisational learning is not about responding to one political cycle. It is about developing governance systems that allow firms to adapt to changing stakeholder expectations over time. It is interesting to note that anti-DEI shareholder proposals have roughly tripled since 2020 and ESG proposal support from large US investors has declined significantly since its peak around 2021
The governance landscape has become more politically polarised, but the need for firms to learn, adapt and engage with shareholders has arguably become even more important.
PG: Do well-governed companies continue vigourously practicing ESG today – eventhough regulators tend to be generally muted?
JL: Yes. I think ESG has evolved rather than disappeared.
During my study period, ESG increasingly became a focus of shareholder activism. Today, the language around ESG may be less prominent in some jurisdictions, particularly in the United States, but many well-governed companies continue to integrate environmental, social and governance considerations into mainstream business strategy.
The reason is practical rather than ideological. Issues such as climate risk, cybersecurity, human capital, supply chain resilience and board oversight remain material business risks regardless of political trends.
From the perspective of my research, ESG should be viewed as part of organisational learning. Firms that learn from shareholder feedback tend to build stronger governance systems, improve transparency and become more resilient over time. Whether companies label these activities as “ESG”, “sustainability” or simply “good governance” is arguably less important than whether they genuinely improve decision-making and accountability.
In other words, the terminology may change, but the underlying governance principles remain highly relevant.
PG: Many thanks for these brilliant insights, Judy. Once again, hearty congratulations for the very inspiring work in pursuit of a well earned doctorate.
illuminem
July 14, 2026
Article link: Can insurers help bypass a stalling Earth System by deploying geoengineering? | illuminem
illuminem
July 11, 2026
illuminem link: https://illuminem.com/illuminemvoices/the-environment-does-not-figure-anywhere-in-business-decisionmaking
This article is also published on the Diversity Blog. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy Thought Leaders, their opinions do not necessarily represent those of illuminem.
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