Mobilizing Trillions How Capital Markets Can Deliver Real Climate Impact

1
00:00:09,040 --> 00:00:11,240
Welcome back to Sustainability
Forward.

2
00:00:11,640 --> 00:00:15,240
I am Rishi your host and with me
is my Co host Carmen.

3
00:00:15,400 --> 00:00:18,720
Hi, Carmen, How are you?
Good Rishi, nice to be back.

4
00:00:19,480 --> 00:00:24,320
Nice to be back today, Carmen.
We are asking a big question and

5
00:00:24,320 --> 00:00:28,480
the question is how do you move
the machinery of capital markets

6
00:00:28,480 --> 00:00:33,680
to deliver real world climate
results and deliver these

7
00:00:33,680 --> 00:00:38,880
results fast from investor
stewardship and disclosure to

8
00:00:38,880 --> 00:00:42,800
nature and biodiversity?
We are today digging into what

9
00:00:42,960 --> 00:00:47,320
what actually works, where
regulation helps or hinders, and

10
00:00:47,320 --> 00:00:50,880
how we measure impact.
Beyond the glossy pledges of

11
00:00:50,880 --> 00:00:55,080
which you've seen many, our
guest today has spent decades

12
00:00:55,600 --> 00:00:58,080
turning good intentions into
practical change across

13
00:00:58,080 --> 00:01:00,040
nonprofits, government, and
finance.

14
00:01:00,520 --> 00:01:04,640
So if you care about
credibility, not greenwashing,

15
00:01:04,959 --> 00:01:07,320
this episode is for you.
Carmen, would you please

16
00:01:07,320 --> 00:01:10,920
introduce our guests?
Yes, with great pleasure, Rishi.

17
00:01:11,040 --> 00:01:12,760
I'm looking forward to this
episode.

18
00:01:13,120 --> 00:01:18,920
So today guest is Steven Rosten
is the Chief Program Officer at

19
00:01:18,920 --> 00:01:23,080
Ceres and the founding Managing
Director of the Ceres

20
00:01:23,120 --> 00:01:26,200
Accelerator for sustainable
capital markets.

21
00:01:26,960 --> 00:01:31,760
He brings 40 years plus of
leading mission driven

22
00:01:31,760 --> 00:01:36,520
enterprises and now he guides
Ceres program strategy to

23
00:01:36,520 --> 00:01:39,920
mobilize capital markets for
climate sustainability.

24
00:01:40,800 --> 00:01:44,360
Steven has launched and LED
organization across sectors

25
00:01:44,680 --> 00:01:48,160
including Citizen Energy
Corporation, Environmental

26
00:01:48,160 --> 00:01:54,520
Futures, Perkins School for the
Blind, Citizen Schools, the JFK

27
00:01:54,520 --> 00:01:57,840
Library Foundation and
Constellations New England

28
00:01:57,840 --> 00:02:02,560
Electricity Brokerage.
He has worked at local, state,

29
00:02:02,640 --> 00:02:06,360
federal and international
levels, serves on numerous

30
00:02:06,360 --> 00:02:09,960
boards, and he's a frequent
speaker and writer.

31
00:02:10,479 --> 00:02:14,360
Stephen Holes, ABA, with honors
in political science from

32
00:02:14,360 --> 00:02:18,320
Williams College and an MBA from
Northwestern Universities

33
00:02:18,600 --> 00:02:22,440
Stanbour School of Management.
So, Stephen, welcome to the

34
00:02:22,440 --> 00:02:24,920
show.
Thank you so much.

35
00:02:24,920 --> 00:02:27,000
I appreciate that kind
introduction.

36
00:02:28,400 --> 00:02:35,520
So Steve, we want to start with
a with a background about your

37
00:02:35,520 --> 00:02:40,680
own career in sustainability.
What brought you to where you

38
00:02:40,680 --> 00:02:44,160
are today and kind of during
this journey, what kind of aha

39
00:02:44,160 --> 00:02:47,160
moments have you had as it
relates to sustainability?

40
00:02:50,640 --> 00:02:56,760
That I've had a number of cases
where seeing people who have

41
00:02:56,760 --> 00:03:02,040
taken on a big job, a big area
and made an impact work on some

42
00:03:02,040 --> 00:03:06,960
of the early folks with electric
vehicles, with recycling when

43
00:03:06,960 --> 00:03:11,200
Earth Day was starting.
And what is clear is folks in my

44
00:03:11,200 --> 00:03:14,880
generation have really made a
lot of mistakes that we've LED

45
00:03:14,880 --> 00:03:20,360
down the road where we're
utilizing too many resources so

46
00:03:20,360 --> 00:03:22,400
that our children and
grandchildren.

47
00:03:22,600 --> 00:03:24,400
And I think of this very
concretely.

48
00:03:24,400 --> 00:03:26,960
I have a grant, 2 1/2 year old
granddaughter named Macy.

49
00:03:27,200 --> 00:03:28,880
What Macy's life is going to be
like.

50
00:03:29,960 --> 00:03:34,600
And so I am an incurable
optimist despite a lot of the

51
00:03:34,600 --> 00:03:39,920
challenges, because I have seen
many people who have been

52
00:03:39,920 --> 00:03:43,440
effective in making change and
bending the curve of our

53
00:03:43,440 --> 00:03:46,600
emissions, of our
sustainability, use of water,

54
00:03:46,600 --> 00:03:52,280
biodiversity.
And it's quite interesting what

55
00:03:52,280 --> 00:03:54,000
you said.
So a lot of mistakes.

56
00:03:54,280 --> 00:03:58,000
So an optimistic would say a lot
of mistakes equals a lot of

57
00:03:58,000 --> 00:04:01,840
experience and that we should
bring with us, right.

58
00:04:02,520 --> 00:04:07,760
And that's a little bit more
about Saras for people to know

59
00:04:07,760 --> 00:04:11,240
this company, what's the
mission, why it matters today

60
00:04:11,760 --> 00:04:14,840
and what you're doing there as a
Chief Program officer.

61
00:04:16,000 --> 00:04:17,680
Yes.
So series we've been around for

62
00:04:17,680 --> 00:04:21,360
about 30-7 years and we started
with investors, large capital

63
00:04:21,360 --> 00:04:23,880
investors.
So our investor network a few

64
00:04:23,880 --> 00:04:28,040
100 investors collectively about
$40 trillion of assets.

65
00:04:28,280 --> 00:04:31,800
So big asset managers, asset
owners, and they fundamentally

66
00:04:31,800 --> 00:04:36,600
believe that if the companies
they invest in think about

67
00:04:36,600 --> 00:04:38,960
climate risk and climate
opportunities, they're going to

68
00:04:38,960 --> 00:04:40,280
make more money.
It's very simple.

69
00:04:40,640 --> 00:04:43,120
They look at this from a
fiduciary duty perspective.

70
00:04:43,320 --> 00:04:46,000
This is not like, oh, they're
trying to trying to invest their

71
00:04:46,000 --> 00:04:48,160
money.
And then the side, oh, there's

72
00:04:48,160 --> 00:04:49,640
that little thing called the
environment.

73
00:04:49,640 --> 00:04:52,920
We'll think about that.
This is core to the risks and

74
00:04:52,920 --> 00:04:54,440
the opportunities for these
companies.

75
00:04:54,760 --> 00:04:57,800
Our world's going through a
dramatic change from clean

76
00:04:57,800 --> 00:05:01,520
energy and use of new products
and, and we which we can talk

77
00:05:01,520 --> 00:05:04,840
about and series.
Our members and the folks who

78
00:05:04,840 --> 00:05:09,040
work with large investors, large
companies, policy makers at the

79
00:05:09,040 --> 00:05:12,400
state, national and
international level all believe

80
00:05:12,400 --> 00:05:16,160
fundamentally that climate risk
is financial risk.

81
00:05:16,320 --> 00:05:19,440
And that if you understand that
risk, you'll do better from a

82
00:05:19,440 --> 00:05:21,960
fiduciary perspective.
And we'll also do better from a

83
00:05:21,960 --> 00:05:25,280
planet's perspective.
And that we work on a variety of

84
00:05:25,280 --> 00:05:30,480
programs from steel and
electricity and oil and gas and

85
00:05:30,760 --> 00:05:34,200
nature, biodiversity, water,
financial, financial sector,

86
00:05:34,200 --> 00:05:36,720
banks, insurance.
And I work with the amazing

87
00:05:36,720 --> 00:05:43,120
teams on those various programs.
Now, Steve, one of the questions

88
00:05:43,120 --> 00:05:52,800
I had around series is, is it
essentially kind of bringing

89
00:05:52,800 --> 00:05:56,320
more relevant information to the
investment community?

90
00:05:56,320 --> 00:06:00,680
Is it building tools tactically?
What are the things it is doing

91
00:06:00,680 --> 00:06:05,000
for for its membership body?
Absolutely, Yeah.

92
00:06:05,000 --> 00:06:09,280
So, so we generate a lot of
thought leadership meetings,

93
00:06:09,280 --> 00:06:13,080
reports, webinars, articles.
So for example, we just did a

94
00:06:13,080 --> 00:06:18,000
report recently on water and
data centers, and data centers

95
00:06:18,000 --> 00:06:21,280
use an enormous amount of water.
And this highlighted some case

96
00:06:21,280 --> 00:06:24,200
studies.
So if you're an investor or if

97
00:06:24,200 --> 00:06:27,080
you're a company using a data
center, if you're an investor

98
00:06:27,080 --> 00:06:29,320
going to invest in a company
that's going to be building data

99
00:06:29,320 --> 00:06:31,920
centers, you should be asking
these questions, not just

100
00:06:31,920 --> 00:06:36,360
because there is water risk.
And in the United States, 1/3 of

101
00:06:36,360 --> 00:06:39,120
the data centers are being built
in areas where there's not

102
00:06:39,120 --> 00:06:42,360
enough water anyway.
But it'll mean farmers don't do

103
00:06:42,360 --> 00:06:44,040
their work.
Housing gets stopped.

104
00:06:44,200 --> 00:06:46,360
So it affects communities it
affects.

105
00:06:46,840 --> 00:06:50,360
That means they'll be permitting
and citing issues because of

106
00:06:50,360 --> 00:06:53,480
local politics.
So that's just one of literally

107
00:06:53,480 --> 00:06:58,080
hundreds of examples I could
give from insurance and steel

108
00:06:58,080 --> 00:07:00,560
and, and, and across the board
sectors.

109
00:07:00,760 --> 00:07:03,800
So we provide information for
investors and then they make

110
00:07:03,800 --> 00:07:06,800
their own decisions.
And the other thing is we bring

111
00:07:06,800 --> 00:07:08,360
them together and they learn
from each other.

112
00:07:08,360 --> 00:07:11,360
So we have a working group.
If you're a group of investors

113
00:07:11,360 --> 00:07:14,000
and you care about a certain
topic, you can talk to other

114
00:07:14,000 --> 00:07:16,760
investors about that topic and
just learn from each other.

115
00:07:16,960 --> 00:07:19,320
So again, we represent hundreds
of investors.

116
00:07:19,560 --> 00:07:25,120
They all think differently.
Some are more impact investors,

117
00:07:25,520 --> 00:07:27,920
some are more mainstream
investors, but they all

118
00:07:27,920 --> 00:07:31,120
understand that climate risk is
financial risk.

119
00:07:33,080 --> 00:07:38,760
And Stephen, you mentioned a
word that I, I like and not I

120
00:07:38,760 --> 00:07:40,960
like it in terms of clarity that
is risk.

121
00:07:42,200 --> 00:07:46,600
Now we are an environment living
in environment where it looks

122
00:07:46,600 --> 00:07:51,440
like talking about the problem
around climate is quite

123
00:07:51,440 --> 00:07:55,120
controversial, has becoming
quite controversial.

124
00:07:55,920 --> 00:07:59,360
He's also talking about risk
controversial today.

125
00:08:00,800 --> 00:08:03,680
Or we are all aligned that there
is a risk and we need to do

126
00:08:03,680 --> 00:08:06,800
something out of it and that is
better that we do something out

127
00:08:06,800 --> 00:08:10,160
of it because otherwise we will
see the negative effort about

128
00:08:10,200 --> 00:08:11,720
it.
Yeah.

129
00:08:11,920 --> 00:08:15,440
So we don't get into a
political, we're a non partisan

130
00:08:15,440 --> 00:08:17,520
organization.
We work with people in all

131
00:08:17,520 --> 00:08:22,640
political parties at the state
and national level and including

132
00:08:22,640 --> 00:08:24,040
on our board and things like
that.

133
00:08:24,280 --> 00:08:27,880
And we don't get into a debate
about the philosophy of it or

134
00:08:27,880 --> 00:08:30,080
any of that.
It's just we look at the, the,

135
00:08:30,160 --> 00:08:35,600
the business issues, you know,
if you're a, I'll give you an

136
00:08:35,600 --> 00:08:39,480
example, if you're a company
that in the United States that

137
00:08:39,480 --> 00:08:43,159
gets something through the
Panama Canal, the Panama Canals

138
00:08:43,159 --> 00:08:47,240
had a drought that means 40%
less ships have gone through

139
00:08:47,240 --> 00:08:50,320
recently.
So if you're planning for some

140
00:08:50,320 --> 00:08:54,040
widget to come through the
Panama Canal, 40% chance it's

141
00:08:54,040 --> 00:08:57,040
going to be late.
That's a business risk.

142
00:08:57,240 --> 00:09:00,280
Or another example, I talked to
a company in Southern California

143
00:09:00,400 --> 00:09:03,760
where there's not enough water.
They got a big order for to

144
00:09:03,760 --> 00:09:09,520
build a piece of equipment and
they couldn't get a building

145
00:09:09,520 --> 00:09:11,800
permit because they couldn't get
a water permit.

146
00:09:12,160 --> 00:09:14,120
So that means that it turned
down that order.

147
00:09:14,120 --> 00:09:15,600
That's 10s of millions of
dollars.

148
00:09:16,000 --> 00:09:18,760
That's not, we don't, we're not
debating the philosophy of it.

149
00:09:18,920 --> 00:09:22,480
That's a business risk.
So we focus on the fiduciary

150
00:09:22,480 --> 00:09:26,280
duty, the safety and soundness
of these financial institutions

151
00:09:26,480 --> 00:09:29,320
and businesses.
And we also understand that

152
00:09:29,320 --> 00:09:31,120
there's an enormous opportunity
for growth.

153
00:09:31,400 --> 00:09:36,200
Last year, 94% of the energy
added to the grid in the United

154
00:09:36,200 --> 00:09:39,200
States was renewable.
That was not, not, that's not

155
00:09:39,200 --> 00:09:42,160
because of politics, that's
because it's the lowest cost.

156
00:09:42,320 --> 00:09:46,160
Clean energy is low cost energy.
Let me say that again, clean

157
00:09:46,160 --> 00:09:49,080
energy is low cost energy.
So if someone, if one of your

158
00:09:49,080 --> 00:09:52,640
listeners says all I care about
is just I want low cost energy

159
00:09:52,840 --> 00:09:56,120
and I wanted to come online in
the next year or two, that leads

160
00:09:56,120 --> 00:09:58,920
to renewable energy.
So we think very much about it

161
00:09:58,920 --> 00:10:03,440
from a business perspective.
And the last quick point is one

162
00:10:03,440 --> 00:10:06,280
of the things that's growing and
growing interest is resiliency

163
00:10:06,600 --> 00:10:10,680
that because of the floods and
fires and and other physical

164
00:10:10,680 --> 00:10:15,920
risks that there is broad
consensus across all political

165
00:10:16,000 --> 00:10:20,600
perspective that we need more
resiliency more in addition to

166
00:10:20,600 --> 00:10:25,680
the decarbonization.
And I think, Steve, we've

167
00:10:25,680 --> 00:10:29,960
already, we've already gone into
the meat of the discussion which

168
00:10:29,960 --> 00:10:34,200
is what you know, what are the
drivers or levers to shift

169
00:10:34,200 --> 00:10:36,040
capital towards sustainable
investment.

170
00:10:36,040 --> 00:10:40,840
And like you highlighted, it's
good business sense to invest

171
00:10:41,240 --> 00:10:44,320
sustainably.
Are there any other levers that

172
00:10:44,880 --> 00:10:49,280
that we should think of as we as
kind of the capital shifts to

173
00:10:49,280 --> 00:10:54,200
our sustainable investments?
Well, there are this both

174
00:10:54,440 --> 00:10:57,160
protecting against the risk and
seeking the opportunity.

175
00:10:57,240 --> 00:11:00,560
So protecting against the risk
is the fires, floods, tornadoes

176
00:11:00,560 --> 00:11:03,160
and other things.
And you know, in the United

177
00:11:03,160 --> 00:11:07,480
States in the 80s we had $1
billion storm every three

178
00:11:07,480 --> 00:11:12,480
months, 1980s three months.
Last year it was every 13 days.

179
00:11:12,680 --> 00:11:16,440
And those storms are growing.
The most expensive event that

180
00:11:16,440 --> 00:11:19,240
we've had in the history of the
United States has been the LA

181
00:11:19,240 --> 00:11:24,480
fire last January, $250 billion.
So that again there is if you're

182
00:11:24,480 --> 00:11:27,360
thinking about whether it's a
big business or a local dry.

183
00:11:27,360 --> 00:11:31,560
I was, I was touring the burnt
out areas where a person's home

184
00:11:31,560 --> 00:11:32,760
is built.
And I asked him is he going to

185
00:11:32,760 --> 00:11:34,520
rebuild?
He said, well, it's not just his

186
00:11:34,520 --> 00:11:38,040
home, his kids school was burnt,
their church was burnt, their

187
00:11:38,040 --> 00:11:42,440
whole community was burnt.
So, so in that community in LA

188
00:11:42,680 --> 00:11:46,600
after the fire, millions of
dollars of municipal bonds were

189
00:11:46,600 --> 00:11:49,360
downgraded because they weren't
sure if they'd get paid back.

190
00:11:49,360 --> 00:11:53,080
So there's a lot of ripples on
the risk people.

191
00:11:53,200 --> 00:11:55,480
If they can't get insurance,
they can't get a mortgage.

192
00:11:56,280 --> 00:11:58,240
So it affects housing, it
affects many other things.

193
00:11:58,240 --> 00:12:00,760
So there's a risk side, but then
there's also the opportunity

194
00:12:00,760 --> 00:12:02,240
side.
According to the UN, we're

195
00:12:02,240 --> 00:12:05,360
spending around $2 trillion.
The world's spending around $2

196
00:12:05,360 --> 00:12:08,360
trillion now on new and emerging
technologies.

197
00:12:08,520 --> 00:12:10,600
That number's going to grow to
around 4 trillion.

198
00:12:10,800 --> 00:12:13,280
So that means if you're a
business, there's lots of

199
00:12:13,280 --> 00:12:16,400
opportunities.
There's a risk of if you're a

200
00:12:16,400 --> 00:12:19,800
spark plug maker, EVs don't have
spark plugs, so you're not going

201
00:12:19,800 --> 00:12:21,560
to sell more of those.
We are going to sell more

202
00:12:21,560 --> 00:12:23,960
batteries.
So there's both the risk side

203
00:12:24,200 --> 00:12:28,320
and the opportunity side on the
business side, but also if you

204
00:12:28,320 --> 00:12:30,760
think about what do your
customers want, they're poll

205
00:12:30,760 --> 00:12:34,360
after poll after poll that
consumers want sustainable

206
00:12:34,360 --> 00:12:38,440
products, younger people even at
a higher percentage than than

207
00:12:38,440 --> 00:12:43,000
than older individuals.
So if you want to sell more and

208
00:12:43,000 --> 00:12:45,880
again, you can't greenwash, but
if you want to legitimately say

209
00:12:45,880 --> 00:12:48,400
what you're doing has to be
based in fact, there's a

210
00:12:48,400 --> 00:12:51,800
customer interest there as well.
But there's also regulatory

211
00:12:51,800 --> 00:12:57,880
risks and and legal risks.
And this really triggers

212
00:12:57,880 --> 00:13:01,520
innovation, innovation,
technical innovation from

213
00:13:01,520 --> 00:13:06,040
business point of view.
Steven, can you talk about the

214
00:13:06,040 --> 00:13:10,760
success stories of real change
that you experienced with your

215
00:13:10,760 --> 00:13:12,920
work?
Sure.

216
00:13:13,080 --> 00:13:17,960
There are, you know, hundreds or
thousands from steel makers that

217
00:13:17,960 --> 00:13:22,680
are making low emission steel
now or low emission concrete

218
00:13:22,880 --> 00:13:27,200
that have the same properties
and are pretty close to the same

219
00:13:27,200 --> 00:13:32,640
price to, as I say, renewable
energy or 94% of the energy

220
00:13:32,640 --> 00:13:36,520
added to the grid in the United
States was renewable last year.

221
00:13:36,520 --> 00:13:40,680
So all kinds, we, the world's
using more renewable than coal

222
00:13:40,680 --> 00:13:46,200
for the first time ever.
So there are all kinds of

223
00:13:46,200 --> 00:13:48,040
products.
I'll take another example.

224
00:13:48,040 --> 00:13:52,000
I just met with a company that
takes chopsticks literally.

225
00:13:52,000 --> 00:13:55,680
Think of those pieces of wood
that you use for maybe 30

226
00:13:55,680 --> 00:13:58,520
minutes when you're eating and
then, well, she makes them into

227
00:13:58,520 --> 00:14:01,200
furniture now.
So kind of a circular economy.

228
00:14:02,160 --> 00:14:06,520
There are States and countries
that are requiring disclosure.

229
00:14:06,520 --> 00:14:10,520
So there's 37 countries, plus
the state of California, which

230
00:14:10,520 --> 00:14:12,960
if it were its own country would
be the 4th largest economy in

231
00:14:12,960 --> 00:14:16,400
the world, are now requiring
corporate climate disclosure.

232
00:14:16,520 --> 00:14:20,320
So there are hundreds of
innovative technologies from

233
00:14:20,320 --> 00:14:26,880
thinking about aviation fuels
and marine to EVs to water

234
00:14:27,320 --> 00:14:31,920
protection, to biodiversity and
nature, to insurance policies.

235
00:14:32,080 --> 00:14:34,440
And again, there are hundreds
and hundreds of examples.

236
00:14:34,640 --> 00:14:36,560
And that's great, but it's not
fast enough.

237
00:14:37,920 --> 00:14:42,160
Literally, our world can't wait.
We can't wait.

238
00:14:42,280 --> 00:14:46,520
And so we need more companies,
more and more public officials

239
00:14:46,520 --> 00:14:50,120
and more investors to look at
these risks and look at them

240
00:14:50,120 --> 00:14:53,880
yesterday.
Great.

241
00:14:55,680 --> 00:14:58,120
Let's let's look a little bit
into a crystal ball.

242
00:14:58,600 --> 00:15:03,640
Let's see, looking at time
horizon of 5-10 years from now,

243
00:15:03,640 --> 00:15:06,720
what you think would be the top
trend shaping the capital

244
00:15:06,720 --> 00:15:08,680
market?
What's your view?

245
00:15:09,800 --> 00:15:13,480
Well, there are many other
trends shaping capital markets

246
00:15:13,520 --> 00:15:15,960
outside of climate from, you
know, AI obviously have an

247
00:15:15,960 --> 00:15:21,760
enormous impact on how we do our
work, employment, all kinds of

248
00:15:21,760 --> 00:15:25,800
other things.
Population, there are studies

249
00:15:25,800 --> 00:15:28,480
show that the world's population
is going to level off and start

250
00:15:28,480 --> 00:15:31,240
to decline.
Education, I mean, there are a

251
00:15:32,040 --> 00:15:35,280
lot of politics, the role of
various countries, obviously

252
00:15:35,280 --> 00:15:38,800
what US is doing and that
affects the role of Europe and

253
00:15:38,800 --> 00:15:40,800
China.
So the many other factors that

254
00:15:40,800 --> 00:15:44,000
I'm I I wouldn't consider myself
an expert on, but in terms of

255
00:15:44,000 --> 00:15:47,640
climate and sustainability is I
think that we're going to look

256
00:15:47,640 --> 00:15:54,400
back and see that sustainable
products, whether it be energy

257
00:15:54,400 --> 00:15:58,280
use to automobiles, to consumer
products, they're much more in

258
00:15:58,280 --> 00:16:01,040
the mainstream 510 years from
now than they are today.

259
00:16:01,040 --> 00:16:03,520
We're going to look back and
say, it's amazing that there was

260
00:16:03,520 --> 00:16:06,520
this debate about is climate
change real or not?

261
00:16:07,360 --> 00:16:10,720
We're going to the next
generation is going to assume

262
00:16:10,720 --> 00:16:13,240
things, you know, in terms of
the use of this.

263
00:16:14,000 --> 00:16:18,360
AI will use a lot of energy, but
also will help us solve

264
00:16:18,360 --> 00:16:21,880
problems, whether it be in
medicine or in climate that we

265
00:16:21,880 --> 00:16:23,480
haven't been able to address
before.

266
00:16:24,200 --> 00:16:28,320
Series just did a big report.
Looking at it helps using AI to

267
00:16:28,320 --> 00:16:32,760
help understand data.
So that's why I am an incurable

268
00:16:32,760 --> 00:16:37,560
optimist and think that the
future will be brighter, whether

269
00:16:37,560 --> 00:16:40,640
it's brighter fast enough.
But there'll also be a lot of

270
00:16:40,640 --> 00:16:43,160
pain, just as we've seen
already.

271
00:16:43,240 --> 00:16:47,640
You know, last year half a
million people died around the

272
00:16:47,640 --> 00:16:50,280
world because of extreme heat.
Half a million people.

273
00:16:51,200 --> 00:16:55,640
And so we have to address these
issues rapidly, thoughtfully and

274
00:16:55,960 --> 00:17:01,400
and across borders.
You know, see, one of the

275
00:17:01,400 --> 00:17:04,839
questions that we get in many of
our discussions, sometimes from

276
00:17:04,839 --> 00:17:09,280
our listeners as well, is in the
world of sustainable investing,

277
00:17:09,280 --> 00:17:13,680
how do we distinguish credible
action from greenwashing?

278
00:17:13,960 --> 00:17:17,599
And is there any work that
Sirius has done in this area?

279
00:17:18,560 --> 00:17:21,680
Absolutely.
You need to have a common set of

280
00:17:21,680 --> 00:17:24,200
definitions.
If, for example, in the United

281
00:17:24,200 --> 00:17:27,000
States and many other countries,
they require an audited

282
00:17:27,000 --> 00:17:28,880
financial statement for a public
company.

283
00:17:29,640 --> 00:17:32,240
And so that means everyone does
the same format.

284
00:17:32,520 --> 00:17:34,720
You have a balance sheet, you
have an income statement, and

285
00:17:34,720 --> 00:17:37,280
then people can believe in that
basic information.

286
00:17:37,440 --> 00:17:39,920
Well, when that was put in place
decades ago, that was very

287
00:17:39,920 --> 00:17:42,320
controversial.
People are saying, oh, you can't

288
00:17:42,320 --> 00:17:44,880
have that, it's too complicated,
we'll be sharing competitive

289
00:17:44,880 --> 00:17:46,840
secrets, etcetera.
That's what we need here.

290
00:17:46,840 --> 00:17:48,480
We need to have consistent
information.

291
00:17:48,960 --> 00:17:53,080
So management you can't manage
what you can't measure.

292
00:17:53,520 --> 00:17:58,400
So the fact that 37 countries
are either have approved or in

293
00:17:58,400 --> 00:18:01,800
the process of approving
consistent form of corporate

294
00:18:01,800 --> 00:18:03,880
climate disclosure is a big
step.

295
00:18:03,880 --> 00:18:05,480
And Syria's been very active in
that.

296
00:18:05,720 --> 00:18:11,280
We help to draft the rule.
The sorry, the law in California

297
00:18:11,440 --> 00:18:13,560
that's now going to it's been
passed is now going to the

298
00:18:13,560 --> 00:18:16,360
regulatory process.
So first is climate disclosure

299
00:18:16,360 --> 00:18:18,760
is critical.
Second thing is you need

300
00:18:18,760 --> 00:18:21,520
transition plans.
If you say to a company, you're

301
00:18:21,520 --> 00:18:25,720
here today, we're going to be in
five, 1020 years to reduce your

302
00:18:25,720 --> 00:18:27,680
emissions, which is again, think
about that.

303
00:18:27,760 --> 00:18:30,680
It's reducing your risk and what
are you going to do to increase

304
00:18:30,680 --> 00:18:33,440
your opportunities.
So you need to have that and

305
00:18:33,440 --> 00:18:35,640
they need to be public and they
need to have a consistent

306
00:18:35,640 --> 00:18:38,960
benchmark.
So what we don't need is a

307
00:18:38,960 --> 00:18:41,960
climate tower Babble.
There's lots of people saying

308
00:18:41,960 --> 00:18:44,080
climate things, but they're
using different terms and

309
00:18:44,080 --> 00:18:48,680
methodologies and that can lead
to greenwashing and we've seen

310
00:18:48,680 --> 00:18:51,920
lots of examples of that.
So we need to have this basic

311
00:18:51,920 --> 00:18:55,080
understanding.
That's why I am excited these 37

312
00:18:55,080 --> 00:18:58,360
countries moving forward.
Now, those 37 countries, when

313
00:18:58,360 --> 00:19:01,880
you put them together, that
represents over 60% of the

314
00:19:01,880 --> 00:19:06,880
world's GDP, so that it will
send a clear message to the

315
00:19:06,880 --> 00:19:10,040
economies and that and then in
addition is California, which

316
00:19:10,040 --> 00:19:13,040
will add to that.
So that's we're getting more

317
00:19:13,040 --> 00:19:15,720
information.
Investors want it, customers

318
00:19:15,720 --> 00:19:18,320
want it, employees want it,
boards want it.

319
00:19:18,600 --> 00:19:22,240
And so we think that that's a
reason for hope.

320
00:19:22,480 --> 00:19:26,200
But companies also have to be
very careful that they're not

321
00:19:26,200 --> 00:19:29,480
overstating.
They can't, you know, in any

322
00:19:29,480 --> 00:19:31,840
field, whether it be climate or
anything else, they have to be.

323
00:19:32,640 --> 00:19:34,840
They can market what they're
doing, but they shouldn't over

324
00:19:34,840 --> 00:19:36,320
market it.
They shouldn't promise what they

325
00:19:36,320 --> 00:19:40,760
haven't be able to deliver.
So that that brings us kind of

326
00:19:40,760 --> 00:19:46,280
to the question of what is the
role of policy and regulation in

327
00:19:46,280 --> 00:19:50,040
all of this, right.
And in your view, Steve, where

328
00:19:50,040 --> 00:19:54,160
do you see a regulation as being
the most critical when it comes

329
00:19:54,160 --> 00:20:00,960
to sustainable investing?
Yeah, so the writer HL Mencken

330
00:20:00,960 --> 00:20:03,080
once said this is not his exact
quote.

331
00:20:03,080 --> 00:20:05,640
But for every complex problem is
a simple answer that's always

332
00:20:05,640 --> 00:20:08,920
wrong.
So solving this is complicated

333
00:20:09,680 --> 00:20:11,120
and we need everyone at the
table.

334
00:20:11,320 --> 00:20:14,680
So policymakers and regulators
are have to be there.

335
00:20:15,400 --> 00:20:18,320
And in, you know, what we've
seen is in countries where

336
00:20:18,320 --> 00:20:22,600
policy makers and regulators are
moving forward, they're they're,

337
00:20:22,600 --> 00:20:24,960
they're, they're coming up with
solutions faster.

338
00:20:25,320 --> 00:20:28,440
In some other countries, you
know, where there's a debate

339
00:20:28,440 --> 00:20:30,600
about is climate change real or
a hoax?

340
00:20:30,720 --> 00:20:34,040
It's going to slow things down.
So we fundamentally believe in

341
00:20:34,040 --> 00:20:38,040
the economy series believes in
in the free market, as long as

342
00:20:38,040 --> 00:20:40,040
it's good information.
But that's to be good,

343
00:20:40,040 --> 00:20:44,200
consistent, clear information.
But they're also areas that you

344
00:20:44,200 --> 00:20:48,160
know, when you, when society
knows, I'll take methane for

345
00:20:48,160 --> 00:20:50,760
example.
Methane is very toxic.

346
00:20:50,760 --> 00:20:54,960
It's around 10 times the
emissions impact than CO2.

347
00:20:55,200 --> 00:20:57,920
And we have to regulate that and
we have to reduce methane.

348
00:20:58,520 --> 00:21:02,160
A lot is being done by private
sector and we're now actually

349
00:21:02,160 --> 00:21:05,120
working with oil companies,
we're working with farms to

350
00:21:05,120 --> 00:21:07,960
reduce and others to reduce
methane, but more needs to be

351
00:21:07,960 --> 00:21:09,680
done.
So it's a partnership between

352
00:21:09,760 --> 00:21:11,200
the public and the private
sector.

353
00:21:11,280 --> 00:21:15,160
We fundamentally believe in the
in the market and investors, but

354
00:21:15,160 --> 00:21:17,280
they can't do it alone.
It's too big of an issue.

355
00:21:19,520 --> 00:21:24,440
And we recently also recorded an
episode we charged on maintain

356
00:21:24,440 --> 00:21:27,600
and transparency and and these
problems.

357
00:21:27,600 --> 00:21:29,800
So we are we are aligned with
that.

358
00:21:30,360 --> 00:21:40,400
And Steven, one question here on
there is any aspect on this

359
00:21:40,400 --> 00:21:43,600
topic that we are currently not
investigating enough or not

360
00:21:43,600 --> 00:21:50,280
working enough something that is
under looked in this topic?

361
00:21:51,840 --> 00:21:54,920
There are many areas, I'll just
give you 3 quick examples, The

362
00:21:54,920 --> 00:21:56,960
insurance industry.
People think when they think of

363
00:21:56,960 --> 00:21:59,240
insurance, they think of it as
kind of a dull industry.

364
00:21:59,480 --> 00:22:02,360
Well, the insurance is in the
middle of all, whether you're

365
00:22:02,360 --> 00:22:07,040
looking at the opportunities for
clean energy, wind or solar or

366
00:22:07,040 --> 00:22:13,400
bio fuel fuels or geothermal or
others, or just people getting a

367
00:22:13,400 --> 00:22:16,000
mortgage.
And you know, whether it be, you

368
00:22:16,000 --> 00:22:20,160
know, any, anyone in any in, in
countries where they in the

369
00:22:20,160 --> 00:22:22,760
United States, if you can't get
insurance, you can't get a

370
00:22:22,760 --> 00:22:25,840
mortgage.
And so that's affect housing.

371
00:22:26,320 --> 00:22:29,680
It's a particular risk for
friends and neighbors that are

372
00:22:29,880 --> 00:22:32,400
more marginalized and living on
the edge financially.

373
00:22:32,400 --> 00:22:34,960
So the insurance industry and
there's a lot of great

374
00:22:34,960 --> 00:22:38,880
solutions.
There's some critical innovative

375
00:22:38,920 --> 00:22:41,360
in innovators in this area.
So insurance is 1.

376
00:22:41,560 --> 00:22:47,000
The second is water risk that we
do not have enough water at the

377
00:22:47,000 --> 00:22:49,800
way we're using it now.
And water isn't in the right

378
00:22:49,800 --> 00:22:50,960
places.
There's some places where

379
00:22:50,960 --> 00:22:55,680
there's too much floods, you
know, and, and last year in

380
00:22:55,680 --> 00:22:58,840
Bangladesh, I think the number
was 30 million people.

381
00:22:58,840 --> 00:23:01,480
But I might be off a little bit.
You know, we're forced to move

382
00:23:01,760 --> 00:23:04,880
because of floods.
So water risk and there are many

383
00:23:04,880 --> 00:23:07,560
areas where there's droughts and
that's those numbers are

384
00:23:07,560 --> 00:23:09,640
growing.
And particularly things like

385
00:23:09,640 --> 00:23:12,200
data centers grow.
That's going to take the amount.

386
00:23:12,320 --> 00:23:14,920
There's a data center complex
being built one place in the

387
00:23:14,920 --> 00:23:18,120
United States now that will take
as much water as the entire city

388
00:23:18,120 --> 00:23:21,120
of New Orleans.
And so that's going to put

389
00:23:21,280 --> 00:23:24,760
enormous risk on aquifers.
So we need to think about water

390
00:23:24,760 --> 00:23:28,000
stewardship in in in more
thoughtful way.

391
00:23:28,240 --> 00:23:31,360
And then the other area is Heavy
Industries that people think,

392
00:23:31,360 --> 00:23:32,680
oh, you can't do anything about
that.

393
00:23:32,680 --> 00:23:35,880
Well, there's are, there's so
many creative approaches in

394
00:23:35,880 --> 00:23:40,600
cement and aluminum and steel
and many other areas that we can

395
00:23:40,600 --> 00:23:44,560
and we can't reach a safe future
without dealing with those

396
00:23:44,560 --> 00:23:46,520
areas.
So there are many other areas,

397
00:23:46,520 --> 00:23:50,120
but I would say the insurance
sector, water and Heavy

398
00:23:50,120 --> 00:23:53,640
Industries are among areas that
need more attention.

399
00:23:55,240 --> 00:23:58,480
Thank you, Steven, and I'm
bringing towards the conclusion

400
00:23:59,840 --> 00:24:02,840
of this incredible talk.
So do you have any practical

401
00:24:02,840 --> 00:24:08,240
steps, any advices for investor
and executives based on your

402
00:24:08,240 --> 00:24:09,800
experience?
Yeah.

403
00:24:10,080 --> 00:24:12,840
So if you're an individual
investor, meaning think about

404
00:24:12,840 --> 00:24:16,160
your own pension, ask whoever is
managing your money or wherever

405
00:24:16,160 --> 00:24:18,400
you have it, what are they
thinking about climate risk?

406
00:24:18,680 --> 00:24:21,840
And this is not a political
question, just what questions

407
00:24:21,840 --> 00:24:24,280
are they asking of the companies
they invest in?

408
00:24:24,600 --> 00:24:28,400
Are they thinking about that if
you're more of an institutional

409
00:24:28,400 --> 00:24:31,560
investor, so you're managing
money, you know, think about the

410
00:24:31,560 --> 00:24:34,520
people at your manager money in
the United States.

411
00:24:34,520 --> 00:24:36,480
I don't know the numbers in
other countries.

412
00:24:36,600 --> 00:24:39,240
In the United States, the
average person working today is

413
00:24:39,240 --> 00:24:42,320
going to retire in 26 years.
Think about the world's going to

414
00:24:42,320 --> 00:24:44,760
be like in 26 years when they
want to pull that money out for

415
00:24:44,760 --> 00:24:47,280
their retirement.
And what will the fires and

416
00:24:47,280 --> 00:24:49,760
floods and trans be like?
What will the new technologies

417
00:24:49,760 --> 00:24:51,880
be?
What will the energy mix be hot?

418
00:24:51,880 --> 00:24:55,280
What kind of materials will we
be using on those areas?

419
00:24:55,280 --> 00:24:59,920
So, so to think about build this
into your risk analysis, just as

420
00:25:00,200 --> 00:25:04,360
I think you should build in
questions about pandemic and AI

421
00:25:04,360 --> 00:25:07,040
and crypto into your analysis
too.

422
00:25:07,920 --> 00:25:11,560
The way one investor said it to
me is they're not thinking about

423
00:25:11,560 --> 00:25:14,120
the next quarter, they're
thinking about the next quarter

424
00:25:14,120 --> 00:25:16,600
century.
And for long term, if you're

425
00:25:16,600 --> 00:25:20,440
thinking about that way, then
you have to think about these

426
00:25:20,440 --> 00:25:25,160
risks and these enormous,
spectacular opportunities to

427
00:25:25,160 --> 00:25:26,600
grow.
You know, if you miss those

428
00:25:26,600 --> 00:25:29,760
opportunities, you're going to
miss ways to make a lot of money

429
00:25:30,400 --> 00:25:33,080
and support the clean energy.
I went to just a dinner last

430
00:25:33,080 --> 00:25:34,920
night.
There's enormous, exciting

431
00:25:34,920 --> 00:25:37,520
entrepreneurs here doing lots of
clean energy work.

432
00:25:39,400 --> 00:25:42,440
Absolutely.
Steven, you, as you said, you

433
00:25:42,440 --> 00:25:47,680
are a self-proclaimed optimist,
incurable optimist.

434
00:25:47,680 --> 00:25:49,080
I think that's how that's how
you put it.

435
00:25:49,520 --> 00:25:53,400
So what gives you hope for the
future in this in this domain?

436
00:25:55,040 --> 00:26:00,520
What gives me hope is despite
what sometimes you read in the

437
00:26:00,520 --> 00:26:03,920
headlines or debate, companies
are continuing to do what they

438
00:26:03,920 --> 00:26:06,280
said.
Companies understand that Mother

439
00:26:06,280 --> 00:26:08,440
Nature doesn't know who's
elected president or Prime

440
00:26:08,440 --> 00:26:11,440
Minister, so they're making
thoughtful decisions.

441
00:26:11,440 --> 00:26:13,120
Not everyone the same way I
would do.

442
00:26:13,120 --> 00:26:17,720
But overall, not too long ago I
was in New York Climate Week and

443
00:26:17,720 --> 00:26:21,840
heard dozens of companies doing
creative things, investors

444
00:26:21,840 --> 00:26:24,120
asking really thoughtful
questions.

445
00:26:24,320 --> 00:26:27,280
The level of information we're
getting now is so much more than

446
00:26:27,280 --> 00:26:29,680
it used to be in the United
States.

447
00:26:29,760 --> 00:26:33,560
Sub national state officials
that are taking bold leadership

448
00:26:33,560 --> 00:26:37,320
in areas around the world,
countries and entrepreneurs.

449
00:26:37,320 --> 00:26:42,200
So, you know, collectively when
the cops started, you know,

450
00:26:42,200 --> 00:26:46,200
we're about to have cop 30 and
cop started that we were on the

451
00:26:46,200 --> 00:26:50,320
world was on a trajectory to, to
grow by 5°C.

452
00:26:50,640 --> 00:26:54,560
Today we're on a, you know,
maybe it's two, maybe it's 2

453
00:26:54,560 --> 00:26:57,960
1/2, maybe we can get it back to
closer to 1 1/2 or something,

454
00:26:58,360 --> 00:27:01,880
depending on what will happen.
So there's still a lot to do,

455
00:27:01,880 --> 00:27:04,520
but collectively we've bent the
curve.

456
00:27:05,080 --> 00:27:09,240
We've bent the curve, and that
means there'll be less floods,

457
00:27:09,240 --> 00:27:14,800
less fires, Still too many.
But, you know, we've done, we

458
00:27:14,800 --> 00:27:17,800
collectively, we've done a lot.
We need to do a lot more to

459
00:27:17,800 --> 00:27:22,360
prevent more climate migrants.
There's, you know, projected to

460
00:27:22,360 --> 00:27:25,840
be, you know, hundreds of
millions of people who are going

461
00:27:25,840 --> 00:27:28,760
to be forced to leave their
homes if we don't do more

462
00:27:28,760 --> 00:27:30,480
faster.
So we've done a lot.

463
00:27:31,080 --> 00:27:33,200
There are creative people doing
work every day.

464
00:27:33,440 --> 00:27:36,800
But it's not enough.
We have to go faster for all of

465
00:27:36,800 --> 00:27:38,840
us, including my granddaughter
Macy.

466
00:27:41,480 --> 00:27:46,120
Great, great insights, Steve.
And, and that was essentially

467
00:27:46,120 --> 00:27:49,080
our, our look at the things that
that matter.

468
00:27:49,360 --> 00:27:53,480
We talked about policy signals
and their importance.

469
00:27:53,920 --> 00:27:57,400
We talked about fiduciary duty,
which is, which is something

470
00:27:57,400 --> 00:27:59,840
that we should keep front and
centre all the time.

471
00:27:59,840 --> 00:28:03,280
We talked about risk and talked
about availability and and

472
00:28:03,280 --> 00:28:06,800
quality of data as well.
And that is essentially the, the

473
00:28:06,800 --> 00:28:09,600
those are the ingredients for
the playbook for mobilizing

474
00:28:09,600 --> 00:28:14,720
trillions at scale over the next
5-10 years.

475
00:28:14,720 --> 00:28:17,360
We'll, we'll keep tracking where
the opportunity lies, right?

476
00:28:17,360 --> 00:28:21,640
Which sectors are most exposed,
how water, nature, biodiversity

477
00:28:22,400 --> 00:28:24,960
get priced into investment
decisions.

478
00:28:24,960 --> 00:28:28,320
But this has been a great, great
episode, Steve.

479
00:28:28,320 --> 00:28:31,320
So thank you for for
participating here at with us

480
00:28:31,320 --> 00:28:34,480
that sustainability forward.
Well, thank you both for

481
00:28:34,480 --> 00:28:37,360
sustainability forward for
raising these important issues

482
00:28:37,640 --> 00:28:41,440
and clearly that without public
awareness, I'd be less

483
00:28:41,440 --> 00:28:44,360
optimistic.
So both of you are playing a

484
00:28:44,360 --> 00:28:48,480
critical role in this work and
your listeners and our our

485
00:28:48,480 --> 00:28:51,520
important stakeholders.
And I encourage all of them to

486
00:28:51,680 --> 00:28:54,720
to, to, you know, think about
when they're acting with their

487
00:28:54,720 --> 00:28:56,960
money, you know, when they when
they call their insurance

488
00:28:56,960 --> 00:28:58,840
company, what's your insurance?
Ask their company what they're

489
00:28:58,840 --> 00:29:02,120
thinking about climate when they
buy products and services and

490
00:29:02,120 --> 00:29:05,360
they participate in local
community or church or if

491
00:29:05,360 --> 00:29:07,360
they're CEO of a couple,
whatever they're doing, the

492
00:29:07,360 --> 00:29:10,520
people they interact with, ask
them what are they doing to to

493
00:29:10,520 --> 00:29:14,080
be prepared for this change, to
protect against risk, to look

494
00:29:14,080 --> 00:29:16,600
for opportunity that we all need
to do it more.

495
00:29:16,600 --> 00:29:19,560
And again, your listeners are
very important audience.

496
00:29:21,720 --> 00:29:26,120
So to our audience, if this
episode and and the contents

497
00:29:26,120 --> 00:29:29,400
that we publish resonates with
you, please follow rate and

498
00:29:29,400 --> 00:29:31,280
share the show Sustainability
Forward.

499
00:29:32,040 --> 00:29:34,400
You can find a lot more details
on our website,

500
00:29:34,720 --> 00:29:41,200
www.sustainabilityforward.com
and listen to us on all major

501
00:29:41,200 --> 00:29:43,720
podcast platforms.
As you know, we are under the

502
00:29:43,720 --> 00:29:47,400
banner Sustainability Forward
the podcast on LinkedIn as well.

503
00:29:47,400 --> 00:29:51,880
Thanks for tuning in, Carmen.
Thank you for Co hosting the

504
00:29:51,880 --> 00:29:54,040
show as well.
Steve, thank you once again.

505
00:29:56,680 --> 00:29:59,120
Thank you.
Thank you.