May 15, 2025 • 32 mins
Low-carbon tech investments reached $2.1 trillion last year. But with the whole world trying to work out how to navigate US President Donald Trump’s unpredictable policy agenda, is 2025 still a good time to invest in climate tech? This week on Zero Akshat Rathi interviews Greg Wasserman, head of private company climate investment at Wellington Management, which oversees more than $1 trillion in assets. Wasserman has to make investment decisions here and now about companies and technologies — weighing risks and opportunities in a volatile market.
Explore further:
- Trump’s Big Oil Era Means Green Bargains for Investors
- Companies Pivot From Climate Talk to 'Greenhushing' in Trump Era
- Why ESG Faces Backlash and Its Future Under Trump 2.0
- GOP to Phase Out Biden Energy Credits to Pay for Tax Cuts
Zero is a production of Bloomberg Green. Our producer is Oscar Boyd. Special thanks to: Jess Beck, Sommer Saadi, Mohsis Andam, Amanda Kolson Hurley and Siobhan Wagner. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to zero. I am Akshatarti. This week climate investing
in the Trump era, things are getting a bit uncertain
(00:22):
out there. Tariffs go up, then they come down. Policy
gets announced, then it gets scrapped. The whole world is
working out how to exist in this new era of
policy determined by US President Donald Trump via social media posts.
What is not uncertain, though, is the need for climate
solutions and the need for money to implement those solutions.
(00:45):
So today we are talking to a climate investor, someone
who is to make those decisions here and now about
which companies and technologies to invest in. Greg Wasserman has
been investing in climate companies for nearly twenty years. He
began his career working at Golden Sachs, then became the
head of the Global Solar Initiative at the Clinton Foundation,
(01:06):
and spent eight years after that as a partner at
Al Gore's Generation Investment Management. He now leads the private
company climate investment team at Wellington Management, investing in companies
that are not yet publicly listed. Wellington has well over
one trillion dollars of assets under management. So I asked him,
(01:27):
is twenty twenty five a good time for investing in
climate focused companies, Where are the climate innovations happening, and
how should investors think about handling growing market uncertainties. Also,
we are recording this interview on May twelfth, Monday afternoon,
London time. Worth noting because the news has been changing
(01:47):
quite rapidly these days. Greg, Welcome to the show.
Speaker 2 (01:55):
Good to see you, appreciate being here.
Speaker 1 (01:57):
So you've been investing in climate since two thousand and six,
almost twenty years, and you've been at many places doing this.
So thinking about today and what has changed over the
last twenty years, how do you think the space has evolved,
and what is your thesis for choosing the right companies
to invest in.
Speaker 2 (02:14):
Yeah, it's definitely been a big evolution in the time
that I've been invested across the space, and I really
think there's been a couple key changes. One is, when
I first started investing back in two thousand and six,
most climate related technologies were really expensive. This was early
days of soul or early days of wind. People weren't
(02:34):
even talking about with some of the AI or resilience
or connectivity solutions we have today, and so everything was
just really expensive. And so at that time it was
all about you have these emerging technologies that we think
can play a role in be green. They're very expensive
and we need government support to get down the cost
curve and get them deployed. And everything was really built
around some version of that government support to get things going,
(02:57):
or dependence on willingness of people to pay a green premium. Right,
So either I want green, I'm willing to pay more
for it, or I want to be green and I'm
willing to acceect a worse solution. Right. If you think
about early days of green cars or early days of
you know, plant based foods and things like that that
were just worse green laundry detern it that dan clean.
(03:17):
People are just willing to take that to be green.
And so I think if you roll forward to today,
there's just been a massive technological shift where R and
D and innovation has just gotten things to where the
performance is much better and the cost is much cheaper.
And so that's really flipped that equation on its head
where you know, many times the green solutions now better
and you know, electric vehicles is kind of the obvious
(03:39):
clearest example of that. And so I think you see
that dynamic playing across a lot of technologies that we see.
Then if I think about the market for capital, right,
I'm obviously investing kind of growth equity and private capital
out there, and I think the market there has really
evolved as well, you know, pretty substantially. If you look
back twenty years ago, there were a number of green
(04:00):
funds out there that focused on climate change that were
basically all venture capital funds that were doing asset heavy
deals that VC funds, you know, really shouldn't have been doing.
But that was the one pocket of green capital that's
out there. And then if you roll forward to how
the markets evolved today, there's so much segmentation that's come
out where you now have early stage VC, growth stage VC,
you have buyout, you have private equity, you have infrastructure finance,
(04:23):
you have sector specialists, you have people that do deep tech,
people that do digital, everything in between. And so there's
just much more of a segmentation in the capital that's
out there, which really lets you find better match between
the capital and the risk that wants to take in
the returns that it's seeking. And so there's just way
more capital out there to finance things, and so I
think that's a pretty important evolution that's happened.
Speaker 1 (04:44):
Yeah, my colleagues here at Bloomberg and I have found
that twenty twenty four, so two point one trillion dollars
invested in the energy transition, and anything that starts with
a trillion, you can bet that there's a lot of
specialization and a lot of variety in the way people invest.
And then the other thing they recently wrote a note
about was at least in power generation. Now there are
(05:05):
places in the world where running existing fossil fuel power
plants is more expensive than building clean energy projects. Not
true everywhere, but it is starting to become truer, and
so now there is in fact a brown premium to
running things on fossil fuels. So it's been quite the change.
But let's just situate ourselves in your current role. So
(05:26):
Wellington has more than one trillion dollars under management. How
much of that investment is climate oriented and how big
is your portfolio specifically, both in money terms and the
number of companies you've invested in.
Speaker 2 (05:40):
Right, we have you know, we have billions of dollars
in our climate platform and it really spreads across the
public space and the private space. So we have a
number of public funds that are focused on climate, either
dedicated strategies or just energy investment vehicles that also focus
on climate. We have dedicated strategy that focuses on climate
adaptation on the public side. And then I'm really focused
(06:02):
on the private side on companies that are doing growth
stage deployment of technologies out in the space. And so
we you know, across the firm, we just have a nice,
a nice pool of capital that can really cover the
space pretty broadly.
Speaker 1 (06:15):
And what's the rough average size of an investment that
you make into companies, what stage are they at sort
of growth means what for those companies.
Speaker 2 (06:23):
We really look for companies that are in commercial revenue
and scaling and so not developing their technology and making
sure it works, not deploying it to their first customers
and getting through some pilots and proving that people buy it,
but really one or two steps past that. And so
these are companies that have at least five million of revenue.
The average across our portfolio tends to be more like twenty.
(06:45):
You know, they're generally doubling every year, so these are
pretty high growth. The stage of company we look at
is usually in the series B series C, series D.
If you sort of use venture and growth terms and
we're investing checks, we can do anywhere from ten up
to forty million, just depending on the situation.
Speaker 1 (07:03):
Could you give examples of some of those companies, just
so people might get a sense of how you are
investing in, where you're investing in, what type of companies
these are.
Speaker 2 (07:12):
Yeah, sure, we're invested in a company called SPAM that's
focused on residential electrification and enabling that with a smarter
software enabled circuit, breaker panel, TS Conductor, which has a
next generation transmission conductor for more efficient and higher capacity
transmission build, a company called Ernia that is focused on
data analytics for energy transition project developers, all the way
(07:35):
through to a number of companies focused on the manufacturing side.
Asset Watch that's focused on a hardware software solution that
monitors equipment to make sure it's operating efficiently and prevents breakdowns.
There's a number of others, but it's really quite broad.
I think a theme across everything is we look for
companies that are either addressing the underlying cause of climate
(07:55):
change in the form of carbon emissions, and what are
things that help reduce emissions, and then We also look
at the effects of climate change in extreme weather and
just say, how can we become more resilient to fire, storm, drought, flood,
water shortages of everything that's happening across the board. A
little bit different than a lot of other climate investors
out there, we tend to focus a bit more on
(08:18):
asset light digital solutions versus deep tech science heavy solutions.
What are enablers to do things better fast or cheaper
versus looking for big scientific breakthroughs.
Speaker 1 (08:28):
What does success look like? Of course, you're an investor,
so you're going to look for returns, but you know
returns from private companies can be harder to get as
an investor. And beyond the return side, are there other
metrics on emissions, etc. That you count as part of
your success?
Speaker 2 (08:44):
Obviously, returns is the key one, you know, very importantly
a climate strategy. There's no reason that climate strategy should
have returns that's any different than best in class other
comparable asset classes, just because you're investing climate. And so
it's really about that opportunity that comes from investing in
great founders that have a great idea and can get
that to market and build scale and get an exit,
(09:07):
you know, either through an acquisition or through the public markets,
and then we track the impact that these companies have.
And so for it to fit a climate strategy, like
I said before, it has to either reduce emissions or
it has to build resilience to extreme weather. And so
we actually track for each company how do they do that,
and that could be anything from this company sells widgets
(09:29):
and each widget helps reduce CO two emissions and we
can track that, you know, all the way through to
if you are giving investors and energy transition assets access
to better data so they can make smarter decisions. You
know how many people are out there, how many investors
are out there that now have access to smarter decision
making information, or you know how many assets have been
(09:50):
built on that platform using that tech. It's really just
a broad range of metrics like that that are important
to check the impact these companies are having over time.
Speaker 1 (09:59):
So let's go to the investment environment for climate companies
right now, which has become more complicated. I mean, you're
right that it's evolved over the last twenty years, but
the evolution has been either perhaps been too rapid in
the past few months, given where policies headed, especially in
the US. So we've had this backlash against ESG, which
started even before Donald Trump was elected. How are you
(10:21):
feeling the ESG backlash?
Speaker 2 (10:23):
I think it really depends that. I think that we
feel like there's you know, there's huge opportunity right now.
And if I take your question in a couple pieces,
so one is the first one that you're calling ESG
backlash that's obviously been happening, you know, as we've seen
in the last few months. I think it's largely misunderstood.
I think ESG generally is misunderstood because the way that
some people implement it is about checking boxes and you know,
(10:45):
hitting quotas and things like that. But that's not what
real ESG is. ESG is all about identifying risks and
opportunities and making sure that you're minimizing or maximizing those
ultimately with the goal around investment returns. And so you know,
on the S side of ESG, on social right, we
look at that and think it's all about company culture, right,
(11:08):
making sure that you are taking surveys or your companies
and making sure that you know any problems coming up
in the culture, because that's all about employee retention. Which
is all about driving value for the company. You know,
the epiece is all about opportunity around the environment, which
translates perfectly to you know, value generating opportunities. GE and
(11:28):
governance is all about making sure you don't have many
of these blow ups that we've seen where people have
no boards and there's been poor oversight and it's led
to you know, management teams making really poor decisions and
there hasn't been proper governance around that or ability to exit,
and so we really think about it through that lens.
So it's much more about generating value than ticking boxes.
And so I think the opportunity there is just as
(11:50):
real and just as needed as it's ever been. And
then if I think about the opportunity for climate investing,
there's a lot of different approaches to how you can
invest around climate. I think our approach skews towards the
end that's much more insulated from policy and regulation in
the sense that everything we look at, you know, we
generally look for solutions that deliver a value proposition. It's
(12:14):
not just green. This is kind of what we were
talking about before. And so the buying decision of the customer,
whoever en buyer is is not based on green or
green premium, it's not based on saving carbon, but it's
about value. This is saving me money, it's solving a
pain point, it's reducing waste, you know, which translates back
to money, or it's giving me access to power that
I have access to. And so we really look for
(12:36):
those opportunities, and I think in this market that opportunity
that really hasn't changed obviously for people that invest in
things that were heavily dependent on DOE loan programs and
you know, high incentives for hydrogen or high carbon prices
for carbon capture. It's more complicated right now, but that's
(12:56):
that's not where we focus because those are a bit
more on the green premium sort of end. And then
I think with the whole opportunity around resilience, right and
just resilience to extreme weather, that only becomes stronger in
this current environment. If you see US leadership pulling back
a bit on this issue. One of the things I
love to say about climate change is the reality is
climate change doesn't care about politics. Right, wildfires and storms
(13:20):
and floods are happening more often, they don't care if
it's Republican or Democrat, and the need to build resilience
and adapt and survive through those doesn't matter if people
are Democrats or Republicans. If you have fires, doesn't even
matter if you think that fire is caused by climate
change or not. Just reality is there's a fire and
you have to deal with it. And so the need
(13:41):
for resilience is just as strong, and I think only
getting stronger. I think that's big opportunity.
Speaker 1 (13:45):
Said on the S side, one thing that's notable is
Wellington is still proud about its diversity, Equity and Inclusion section.
It's still there on It's about Us page, something that
we have seen many other companies in the US actually back,
doesn't it. What do you that it might become a
target for the Trump administration.
Speaker 2 (14:05):
Yeah, I in my role, I tend to ignore that
noise and just really focus on my role investing around
climate and I'm proud to be a Wellington and value
our approach which is all about generating value for our
companies and ultimately delivering investment returns.
Speaker 1 (14:21):
How do you weigh the uncertainty that Trumpean policies bring
into investment decisions. You talked a little bit about the
fact that you're not investing based on policy and regulations,
you're not reliant on tax credits from the government. But
it does create an environment that makes it difficult to say,
get a co investor in a project, or get the
(14:43):
companies that are classed as climate companies find customers. So
how exactly do you deal with uncertainty in that instant
as an investor.
Speaker 2 (14:53):
It's definitely complicated and it's very situation specific. I would say,
if I think about the pockets of uncertainty right now,
everyone talks about the Inflation Reduction Act and where that's
going to end up as part of the tax package.
We really care about something like solar, and where solar
ends up. We don't think as much about the hydrogen
side or the carbon capture side, or wind. We don't
(15:14):
really you know, we don't really invest much around wind,
and so for us related to the IRA, it's very
much about solar, and I think that in a lot
of ways, regardless of what happens with the IRA, solar
will still be a very key and growing part of
the energy environment. Tariffs is the other big uncertainty where
I think there's two different levels to think about it.
One is any company either we're invested in or we're
(15:37):
looking at being invested in. How are they directly impacted
by tariffs? And so if they manufacture a product, where
do they manufacture it? And do we have visibility onto
what that tariff situation will be or not. Sometimes that's extential,
sometimes it's not. So you just have to look at
that situation specific and just say, is the likely scenario
cost maybe goes up a little bit if there is
(15:57):
a tariff, or is it so much uncertain that if
the tariffs that are being discussed actually come into play,
the product doesn't make any sense. And then the second
one is just what is the underlying impact to different
sectors that happen from tariffs And so solar A lot
of solar equipment is subject to tariffs because a lot
of it comes from you know, there's a lot made
(16:18):
here in the US, but a lot of comes internationally,
and so you have to think about how costs go
up if a lot of the components are tariff do
you also have to think about the cost of the
competing technologies and how of those go up? Right? A
lot of power equipment is also even for traditionals manufactured internationally.
We also try to think through what are the opportunities
to lean in around that, and so I mentioned before,
we're invested in a number of companies focused on manufacturing
(16:40):
tech and manufacturing optimization and efficiency. If tariffs really come
into play, there's huge opportunities there because there might be
new shoring. Anybody that has manufacturing capacity needs to get
the most out of it, and so that's a big
opportunity set. There's huge opportunities in supply chain tracking, right
if all of a sudden, you need more options around
who who your suppliers are. You need to know where
(17:02):
things are coming from. You need to know where your
supplier supplier suppliers are coming from so that you know
if you're secure or not. Supply chain visibility becomes really important,
and there's just lots of interesting solutions around that that
we think are pretty exciting.
Speaker 1 (17:14):
And we're talking on a day when you know, tariffs
and China went down from one hundred and forty five
percent to thirty percent. Just before I came in to
record the interview, there was a comment from the Treasury
Secretary Scott Bessen saying they could go lower, but ten
percent is the baseline, so they could go below thirty
percent and come down to ten percent. If you look
(17:35):
at tariffs and you said there's opportunity set that comes in,
is there a particular sector that you're holding back on
in investing given the uncertainty around tariffs right now?
Speaker 2 (17:45):
I don't know if i'd say we're holding back on anything.
I think we're being thoughtful about how different tariffs might
impact different spaces in different ways. And so you know,
I touched on something like solar. If you look at
you know, storage and batteries as something with climate space
talks about a lot all of a sudden, a lot
of the batteries and components come from China, and so
what happens with where costs level out and is there
(18:08):
maybe a period of time where they go up a
little bit before they keep coming back down. It's all
about also looking at just supply chains, and our food
ecosystem is heavily globalized, and so you know, we actually
have an investment in a company that tracks food supply
chains and inventory levels and all of this really makes
inventory forecasting and monitoring, you know, even more important. There's
(18:31):
puts and takes here, but we try to make sure
we're being thoughtful about the risks and then being opportunistic
gog or where we see opportunities to lean in.
Speaker 1 (18:43):
We'll be back with more of my conversation with Greg
Wasserman after the short break.
Speaker 3 (18:47):
And Hey, if you're.
Speaker 1 (18:48):
Enjoying this episode, please create and review the show on
Apple Podcasts and Spotify. Your feedback really matters and helps
new listeners discover the show.
Speaker 3 (18:56):
Thank you.
Speaker 1 (19:08):
Now, you mentioned a number of your companies and portfolio
companies are digital, They're focused on software solutions. How has
the development of AI changed your investment strategy.
Speaker 2 (19:19):
It's obviously been the you know, the biggest trend that
everybody's talking about, and I think that it impacts everything
we're looking at on a ton of different levels. Right,
So there's obviously the physical build of AI, and you
know how that's affecting the energy space generally. And so
you know, there's been a huge explosion in data centers,
(19:39):
data center load growth. You know, if you look at
the US, we've had flat load growth for a while.
You know, it's back picking up a lot of the
projections talk about, you know, huge build for data centers
over the next decade. That translates to a lot of
load growth. We do think there's some noise in the
numbers because if you look at the pipeline of data
centers versus what actually gets built, it's it's I don't
(20:00):
know if it's a third or a quarter, but there's
a lot of duplication across the network. But the US
is in a position in the world where we just
we're back to load growth and so that creates a
ton of opportunity around new generation, right whereas that new
generation coming from solar and renewables that have been the
biggest source of new generation, and I think we'll continue
to be. So you'll see fossil plants that had meant
(20:24):
to be decommissioned coming back online or extending their life.
You know, you've seen nuclear plants that were mothballed signing
contracts to come back up. So I think there's just
a lot happening with energy generation. I also think there's
an ongoing huge opportunity in the grid and how you
make the grid more dynamic and the data center and
AI growth just just keep driving that. You don't always
(20:44):
have to have the grid size to meet demand. You
can flex demand and move things up or down. You
can shape shape the load profile with storage. You can
actually do smart things with data center loads and AI loads.
Some ALI eye loads are time sensitive, some are not,
so you know, orchestration software that determines, well, this is
this needs to run right now versus this can run
(21:06):
at three in the morning and just schedule things when
they make sense. That's sort of one window on AI,
you know. I think there's a second one around just
targeted use cases of applying AI to solving climate that
are that are really huge, in particular on I think
some of the things we're seeing on resilience just smarter
(21:26):
response to climate change and that are planning better response
in the moment. And I can give a lot of
opportunities around that, but there's just there's a lot happening.
Speaker 1 (21:35):
Yeah, I can you give me examples of companies that
you find are using AI to try and deal with
climate change.
Speaker 2 (21:44):
Yeah. If you think about the effects of climate change,
so extreme weather, some of that is longer term trends,
right just certain areas are going to be more prone
to occasional flooding over time, They'll be warmer over time.
Some of that's much more. There's a storm that's barreling
down on us right now, Like, what do we do,
and I think AI can play huge opportunities across all that,
(22:08):
in particular on the more acute side where something major
is happening and you need to get whatever data you
can to figure out what you think will happen and
then make a decision based on that. Right. And so
you know, if you are a town manager, somebody needs
to decide do we an issue in evacuation order or not?
(22:29):
You could decide that just a based on what the
storm is telling you, like is it going to hit
or not? Do we issue that? When do you issue that?
You might want to take traffic analysis into that, right,
depending on what time, how early or late you issue it,
traffic may be worse or better and give more people
time versus sitting in traffic jams. When you think about
in the moment, there's a wildfire happening, there's a storm happening,
(22:49):
people call nine to one one nine one call centers
get overloaded, People call their utility that there's power lines out,
and utility call centers get overloaded. And so if you
can have layers of AI that can help take those calls,
analyze those calls, pull in other situational data, right because
it's not just the person calling saying something's happening, but
(23:09):
you have news reports, you have data, you have cameras,
you have sensors. There's a ton of information. And so
if you can have smarter situational awareness that the nine
to one one responder or the firefighter on the ground
that's battling the fire, you can give them better information
to make smarter decisions on what to do. You can
just become more resilient, you know, especially in moments like
that where human emotion gets in the way of reasonable
(23:33):
judgment in times of stress, you know, which obviously is
critical and things like that. We even see things like
that on the corporate side, where you know, there's a
storm happening and you're an airline. Should you cancel the
flights or not? Should you reroute the planes or not?
You know, historically there's people that sit there that are
meteorologists inside the airlines that look at the data and
best guess. You can now have AI that can give
(23:55):
a smart recommendation, you know, here's what I would do.
You still have people make the decision on whether you
do that or not. But there's just so many interesting
layers of that across how you can build resilience.
Speaker 1 (24:04):
Is that something that's already being implemented by companies or
are these just ideas that are coming across your table.
Speaker 2 (24:11):
Yeah, we've seen you know, we've seen companies focused on
AI for nine to one call centers. We've seen companies
focused on AI for utility call centers. We've seen companies
that sell AI to use cameras to track look out
in fields and monitor for fires starting so you can
see there's maybe a little bit of smoke in that,
(24:32):
I think that might be a fire, and go put
that out before that happens. We're even seeing it used
in greenhouses where you can monitor how plants grow under
different circumstances and therefore, as weather changes, you actually know
how specific plants will respond to different types of heat
and water stress, and you can better tailor the nutrients
that go to them or other ways to manage that.
(24:53):
And then a lot of people don't think about this
necessarily as resilience angle, but insurance is a really big one.
You have theseynamics where people can't ensure their house in
California because of the wildfire risk, or insurers pulling out
of Florida because of the flood risk. And a lot
of that is just because it's hard to price specific
property risk and so they just look at the whole
(25:14):
area and reality is, you know, this house might be
very different than the house next door or the risk
depending on what mitigation efforts they have or not. Some
of this needs regulatory change because you can't necessarily price
insurance policies based on some of this, But I think
that's coming, and so just smarter insurance. It's part of
resilience because it's financial protection for you.
Speaker 1 (25:34):
Beyond AI, Are there other areas of technology that excite
you most right now?
Speaker 2 (25:40):
It's really broad across the board. We look at all
of the themes that we care about, and we spend
a lot of time thinking about enablers and just ways
that you can take what's already working and do it better, faster,
or cheaper. And so there's just tons of opportunities with that. Again,
it's you know, if you think about people building energy
transition projects. You mentioned the trillion dollar number before of
(26:03):
investment that's happened in the climate space. A lot of
that's infrastructure, right, people building major solar projects and you know,
utility scale solar battery storage projects and things like that
what's the data and tools and software platforms that just
make them invest betterfest or cheaper and manage the assets better.
And that's anything from data that goes into their modeling
(26:25):
on the projects, that goes into construction tech, it goes
into robotics to automate some of it all the way
through to you know, drones that can monitor plants once
they're built and make sure they're operating efficiently. And some
of the drones can even do repairs. So that's one
huge opportunity. And then we really look at broad themes
(26:45):
around labor challenges and how that translates to opportunities around
automation and robotics and where those intersect with climate benefits
just because a lot of times automated solutions are more
efficient than humans. That could be on the agriculture side,
that could be in the industrial side, and just smarter
supply chains. I touched on that a bit before, but
(27:06):
we're seeing tons of opportunity with food supply chain, industrial
supply chain that we have to look for the climate angle.
So a lot of that's around reduced waste and more
just in time, but all that translates to the current
environment of navigating shocks, which could be climate shops, but
it could also be Tarwerff stocks.
Speaker 1 (27:23):
At Bloombercgreen, We've launched a series this year that looks
at the bottlenecks that are holding back electrification of the economy. Now,
things that are beyond the obvious stuff, so not permitting
reform or high interest rates, which are issues that slow
down electrification, but they're less obvious stuff. So the first
story was looking at the shortage of transformers. We've got
(27:46):
a few future stories coming up. But from your perspective,
what kind of unusual bottlenecks to electrification are you seeing.
Speaker 2 (27:53):
I mentioned one of our companies before Span that sells
a software enabled circuit breaker panel. A huge, huge, unappreciated
bottleneck for electrification is when you take your house and
you start adding an EV Chargerdn't You didn't power your
car from your house before you do? Now because you
had any V charger. You add a heat pump instead
(28:13):
of a gas furnace, and so that's now electric powered
versus gas powered. You do the same thing on the
hot water side, you get an electric hot water heater
instead of a gas hot water heater. People are doing
the induction stoves all that stuff's great for electrification, and
these are great technologies that are better user experience. They
all use more electricity than the thing they're replacing, and
so all of a sudden, the power supply into your
(28:34):
house is a choke hold. And so one way to
solve that is get more power into your house. So
grip up the yard and add a second panel and
have the utility run more lines. The others just be
smart about when things are running in your house and
better utilize the power in that you currently have. And
so our portfolio company SPAN is really focused on that.
So I think that's a huge one around just avoiding
(28:56):
the need to build more transformers and substations and capacity
and grid build out. Just better utilize what you have.
There's even random stuff like there's been a well published
Loze shortage of electricians. Google just the other day actually
announced they were going to start training electricians. But we've
seen platforms that come up that are focused on software
for training electricians. We've even seen some interesting Jenai platforms
(29:21):
popping up around. If you think about electricians work, some
of it's designing the system, some of it's installing the system.
If there's a shortage out there of people, and you say, well,
can Jenai do a better job of designing the system
automatically and therefore the electrician can spend more time actually
installing it. You can solve some of the bottleneck that way.
And so we see a lot of interesting things like
(29:42):
that that we think are quite exciting in early days
of just getting to market, but are pretty disruptive.
Speaker 1 (29:47):
Well, you almost guessed the second story that's not yet
been published, but that's going to look at the shortage
of skilled workers. So it's a real shortage that I've
heard so many people in the industry talk about. Now
another thing that sort of I would say among left
and right and in agreement, that there's perhaps regulation that
is coming in the way of helping the energy transition
(30:08):
in some places or helping electrification in other places. If
you add the power to get rid of one legislation
and add another one, what would you do?
Speaker 2 (30:17):
The one that I would get rid of would be
permitting restrictions. It takes so long to build things. Transmission
is something we think about a lot. It takes forever
to build transmission, but even just anything, right, you know,
we were talking about electrification before, you know, somebody wants
to upgrade their house. It might take months and months
to get the permits. It might take six months to
get a you know, permit to install any V charger
(30:38):
if you need one. And so I think that reducing
you know, red tape around permitting, I think would be
a really big one. And so that's that's probably what
I would look to reduce. I'm definitely not one for
adding regulation generally, but if I were, I would probably
say that any construction decisions need to take into account
(31:01):
the future of where you're building and making sure that
it's resilient for what the future looks like. Now. That
obviously can get quite complicated. But you know, you might
be putting a house somewhere today that is fine, But
in fifty years all the data says that that might
be it might be flooded. And so instead of in
forty years from now you're starting to see floods and
(31:22):
you have to go install some our medial solutions, why
not take into account just requirements that things should be
resilient today. Things should be electric ready today. That's probably
another big one. Just building should be electric ready because
it's it's disruptive to try to build that earlier, and
so if I were to add a regulation, it would
probably be around electric ready and resilient ready. Thank you, Greg,
(31:44):
Thank you great to be here. Really enjoyed the discussion.
Speaker 1 (31:49):
Thank you for listening to zero. And now for the
sound of the week, as the sound of an anchor
dropping from a container ship. Shipping traffic from China to
the US has dropped massively over the last month, meaning
a lot more ships are spending a lot more time
(32:10):
at anchor.
Speaker 2 (32:12):
If you like this.
Speaker 1 (32:12):
Episode, please take a moment to rate and review the
show on Apple Podcasts or Spotify. Share this episode with
a friend or with someone who can make sense of
one trillion dollars. This episode was produced by Oscar Boyd
Mnoomberg's head of podcast is Sage Bowman and head of
Talk is Brendan newnam Our. Theme music is composed by
Wonderly Special. Thanks to Jessica bec Samarsadi Moses Andim and
(32:35):
Amanda Colson Hurley. I'm Markshatrati back soon.
Welcome to zero. I am Akshatarti. This week climate investing
in the Trump era, things are getting a bit uncertain
(00:22):
out there. Tariffs go up, then they come down. Policy
gets announced, then it gets scrapped. The whole world is
working out how to exist in this new era of
policy determined by US President Donald Trump via social media posts.
What is not uncertain, though, is the need for climate
solutions and the need for money to implement those solutions.
(00:45):
So today we are talking to a climate investor, someone
who is to make those decisions here and now about
which companies and technologies to invest in. Greg Wasserman has
been investing in climate companies for nearly twenty years. He
began his career working at Golden Sachs, then became the
head of the Global Solar Initiative at the Clinton Foundation,
(01:06):
and spent eight years after that as a partner at
Al Gore's Generation Investment Management. He now leads the private
company climate investment team at Wellington Management, investing in companies
that are not yet publicly listed. Wellington has well over
one trillion dollars of assets under management. So I asked him,
(01:27):
is twenty twenty five a good time for investing in
climate focused companies, Where are the climate innovations happening, and
how should investors think about handling growing market uncertainties. Also,
we are recording this interview on May twelfth, Monday afternoon,
London time. Worth noting because the news has been changing
(01:47):
quite rapidly these days. Greg, Welcome to the show.
Speaker 2 (01:55):
Good to see you, appreciate being here.
Speaker 1 (01:57):
So you've been investing in climate since two thousand and six,
almost twenty years, and you've been at many places doing this.
So thinking about today and what has changed over the
last twenty years, how do you think the space has evolved,
and what is your thesis for choosing the right companies
to invest in.
Speaker 2 (02:14):
Yeah, it's definitely been a big evolution in the time
that I've been invested across the space, and I really
think there's been a couple key changes. One is, when
I first started investing back in two thousand and six,
most climate related technologies were really expensive. This was early
days of soul or early days of wind. People weren't
(02:34):
even talking about with some of the AI or resilience
or connectivity solutions we have today, and so everything was
just really expensive. And so at that time it was
all about you have these emerging technologies that we think
can play a role in be green. They're very expensive
and we need government support to get down the cost
curve and get them deployed. And everything was really built
around some version of that government support to get things going,
(02:57):
or dependence on willingness of people to pay a green premium. Right,
So either I want green, I'm willing to pay more
for it, or I want to be green and I'm
willing to acceect a worse solution. Right. If you think
about early days of green cars or early days of
you know, plant based foods and things like that that
were just worse green laundry detern it that dan clean.
(03:17):
People are just willing to take that to be green.
And so I think if you roll forward to today,
there's just been a massive technological shift where R and
D and innovation has just gotten things to where the
performance is much better and the cost is much cheaper.
And so that's really flipped that equation on its head
where you know, many times the green solutions now better
and you know, electric vehicles is kind of the obvious
(03:39):
clearest example of that. And so I think you see
that dynamic playing across a lot of technologies that we see.
Then if I think about the market for capital, right,
I'm obviously investing kind of growth equity and private capital
out there, and I think the market there has really
evolved as well, you know, pretty substantially. If you look
back twenty years ago, there were a number of green
(04:00):
funds out there that focused on climate change that were
basically all venture capital funds that were doing asset heavy
deals that VC funds, you know, really shouldn't have been doing.
But that was the one pocket of green capital that's
out there. And then if you roll forward to how
the markets evolved today, there's so much segmentation that's come
out where you now have early stage VC, growth stage VC,
you have buyout, you have private equity, you have infrastructure finance,
(04:23):
you have sector specialists, you have people that do deep tech,
people that do digital, everything in between. And so there's
just much more of a segmentation in the capital that's
out there, which really lets you find better match between
the capital and the risk that wants to take in
the returns that it's seeking. And so there's just way
more capital out there to finance things, and so I
think that's a pretty important evolution that's happened.
Speaker 1 (04:44):
Yeah, my colleagues here at Bloomberg and I have found
that twenty twenty four, so two point one trillion dollars
invested in the energy transition, and anything that starts with
a trillion, you can bet that there's a lot of
specialization and a lot of variety in the way people invest.
And then the other thing they recently wrote a note
about was at least in power generation. Now there are
(05:05):
places in the world where running existing fossil fuel power
plants is more expensive than building clean energy projects. Not
true everywhere, but it is starting to become truer, and
so now there is in fact a brown premium to
running things on fossil fuels. So it's been quite the change.
But let's just situate ourselves in your current role. So
(05:26):
Wellington has more than one trillion dollars under management. How
much of that investment is climate oriented and how big
is your portfolio specifically, both in money terms and the
number of companies you've invested in.
Speaker 2 (05:40):
Right, we have you know, we have billions of dollars
in our climate platform and it really spreads across the
public space and the private space. So we have a
number of public funds that are focused on climate, either
dedicated strategies or just energy investment vehicles that also focus
on climate. We have dedicated strategy that focuses on climate
adaptation on the public side. And then I'm really focused
(06:02):
on the private side on companies that are doing growth
stage deployment of technologies out in the space. And so
we you know, across the firm, we just have a nice,
a nice pool of capital that can really cover the
space pretty broadly.
Speaker 1 (06:15):
And what's the rough average size of an investment that
you make into companies, what stage are they at sort
of growth means what for those companies.
Speaker 2 (06:23):
We really look for companies that are in commercial revenue
and scaling and so not developing their technology and making
sure it works, not deploying it to their first customers
and getting through some pilots and proving that people buy it,
but really one or two steps past that. And so
these are companies that have at least five million of revenue.
The average across our portfolio tends to be more like twenty.
(06:45):
You know, they're generally doubling every year, so these are
pretty high growth. The stage of company we look at
is usually in the series B series C, series D.
If you sort of use venture and growth terms and
we're investing checks, we can do anywhere from ten up
to forty million, just depending on the situation.
Speaker 1 (07:03):
Could you give examples of some of those companies, just
so people might get a sense of how you are
investing in, where you're investing in, what type of companies
these are.
Speaker 2 (07:12):
Yeah, sure, we're invested in a company called SPAM that's
focused on residential electrification and enabling that with a smarter
software enabled circuit, breaker panel, TS Conductor, which has a
next generation transmission conductor for more efficient and higher capacity
transmission build, a company called Ernia that is focused on
data analytics for energy transition project developers, all the way
(07:35):
through to a number of companies focused on the manufacturing side.
Asset Watch that's focused on a hardware software solution that
monitors equipment to make sure it's operating efficiently and prevents breakdowns.
There's a number of others, but it's really quite broad.
I think a theme across everything is we look for
companies that are either addressing the underlying cause of climate
(07:55):
change in the form of carbon emissions, and what are
things that help reduce emissions, and then We also look
at the effects of climate change in extreme weather and
just say, how can we become more resilient to fire, storm, drought, flood,
water shortages of everything that's happening across the board. A
little bit different than a lot of other climate investors
out there, we tend to focus a bit more on
(08:18):
asset light digital solutions versus deep tech science heavy solutions.
What are enablers to do things better fast or cheaper
versus looking for big scientific breakthroughs.
Speaker 1 (08:28):
What does success look like? Of course, you're an investor,
so you're going to look for returns, but you know
returns from private companies can be harder to get as
an investor. And beyond the return side, are there other
metrics on emissions, etc. That you count as part of
your success?
Speaker 2 (08:44):
Obviously, returns is the key one, you know, very importantly
a climate strategy. There's no reason that climate strategy should
have returns that's any different than best in class other
comparable asset classes, just because you're investing climate. And so
it's really about that opportunity that comes from investing in
great founders that have a great idea and can get
that to market and build scale and get an exit,
(09:07):
you know, either through an acquisition or through the public markets,
and then we track the impact that these companies have.
And so for it to fit a climate strategy, like
I said before, it has to either reduce emissions or
it has to build resilience to extreme weather. And so
we actually track for each company how do they do that,
and that could be anything from this company sells widgets
(09:29):
and each widget helps reduce CO two emissions and we
can track that, you know, all the way through to
if you are giving investors and energy transition assets access
to better data so they can make smarter decisions. You
know how many people are out there, how many investors
are out there that now have access to smarter decision
making information, or you know how many assets have been
(09:50):
built on that platform using that tech. It's really just
a broad range of metrics like that that are important
to check the impact these companies are having over time.
Speaker 1 (09:59):
So let's go to the investment environment for climate companies
right now, which has become more complicated. I mean, you're
right that it's evolved over the last twenty years, but
the evolution has been either perhaps been too rapid in
the past few months, given where policies headed, especially in
the US. So we've had this backlash against ESG, which
started even before Donald Trump was elected. How are you
(10:21):
feeling the ESG backlash?
Speaker 2 (10:23):
I think it really depends that. I think that we
feel like there's you know, there's huge opportunity right now.
And if I take your question in a couple pieces,
so one is the first one that you're calling ESG
backlash that's obviously been happening, you know, as we've seen
in the last few months. I think it's largely misunderstood.
I think ESG generally is misunderstood because the way that
some people implement it is about checking boxes and you know,
(10:45):
hitting quotas and things like that. But that's not what
real ESG is. ESG is all about identifying risks and
opportunities and making sure that you're minimizing or maximizing those
ultimately with the goal around investment returns. And so you know,
on the S side of ESG, on social right, we
look at that and think it's all about company culture, right,
(11:08):
making sure that you are taking surveys or your companies
and making sure that you know any problems coming up
in the culture, because that's all about employee retention. Which
is all about driving value for the company. You know,
the epiece is all about opportunity around the environment, which
translates perfectly to you know, value generating opportunities. GE and
(11:28):
governance is all about making sure you don't have many
of these blow ups that we've seen where people have
no boards and there's been poor oversight and it's led
to you know, management teams making really poor decisions and
there hasn't been proper governance around that or ability to exit,
and so we really think about it through that lens.
So it's much more about generating value than ticking boxes.
And so I think the opportunity there is just as
(11:50):
real and just as needed as it's ever been. And
then if I think about the opportunity for climate investing,
there's a lot of different approaches to how you can
invest around climate. I think our approach skews towards the
end that's much more insulated from policy and regulation in
the sense that everything we look at, you know, we
generally look for solutions that deliver a value proposition. It's
(12:14):
not just green. This is kind of what we were
talking about before. And so the buying decision of the customer,
whoever en buyer is is not based on green or
green premium, it's not based on saving carbon, but it's
about value. This is saving me money, it's solving a
pain point, it's reducing waste, you know, which translates back
to money, or it's giving me access to power that
I have access to. And so we really look for
(12:36):
those opportunities, and I think in this market that opportunity
that really hasn't changed obviously for people that invest in
things that were heavily dependent on DOE loan programs and
you know, high incentives for hydrogen or high carbon prices
for carbon capture. It's more complicated right now, but that's
(12:56):
that's not where we focus because those are a bit
more on the green premium sort of end. And then
I think with the whole opportunity around resilience, right and
just resilience to extreme weather, that only becomes stronger in
this current environment. If you see US leadership pulling back
a bit on this issue. One of the things I
love to say about climate change is the reality is
climate change doesn't care about politics. Right, wildfires and storms
(13:20):
and floods are happening more often, they don't care if
it's Republican or Democrat, and the need to build resilience
and adapt and survive through those doesn't matter if people
are Democrats or Republicans. If you have fires, doesn't even
matter if you think that fire is caused by climate
change or not. Just reality is there's a fire and
you have to deal with it. And so the need
(13:41):
for resilience is just as strong, and I think only
getting stronger. I think that's big opportunity.
Speaker 1 (13:45):
Said on the S side, one thing that's notable is
Wellington is still proud about its diversity, Equity and Inclusion section.
It's still there on It's about Us page, something that
we have seen many other companies in the US actually back,
doesn't it. What do you that it might become a
target for the Trump administration.
Speaker 2 (14:05):
Yeah, I in my role, I tend to ignore that
noise and just really focus on my role investing around
climate and I'm proud to be a Wellington and value
our approach which is all about generating value for our
companies and ultimately delivering investment returns.
Speaker 1 (14:21):
How do you weigh the uncertainty that Trumpean policies bring
into investment decisions. You talked a little bit about the
fact that you're not investing based on policy and regulations,
you're not reliant on tax credits from the government. But
it does create an environment that makes it difficult to say,
get a co investor in a project, or get the
(14:43):
companies that are classed as climate companies find customers. So
how exactly do you deal with uncertainty in that instant
as an investor.
Speaker 2 (14:53):
It's definitely complicated and it's very situation specific. I would say,
if I think about the pockets of uncertainty right now,
everyone talks about the Inflation Reduction Act and where that's
going to end up as part of the tax package.
We really care about something like solar, and where solar
ends up. We don't think as much about the hydrogen
side or the carbon capture side, or wind. We don't
(15:14):
really you know, we don't really invest much around wind,
and so for us related to the IRA, it's very
much about solar, and I think that in a lot
of ways, regardless of what happens with the IRA, solar
will still be a very key and growing part of
the energy environment. Tariffs is the other big uncertainty where
I think there's two different levels to think about it.
One is any company either we're invested in or we're
(15:37):
looking at being invested in. How are they directly impacted
by tariffs? And so if they manufacture a product, where
do they manufacture it? And do we have visibility onto
what that tariff situation will be or not. Sometimes that's extential,
sometimes it's not. So you just have to look at
that situation specific and just say, is the likely scenario
cost maybe goes up a little bit if there is
(15:57):
a tariff, or is it so much uncertain that if
the tariffs that are being discussed actually come into play,
the product doesn't make any sense. And then the second
one is just what is the underlying impact to different
sectors that happen from tariffs And so solar A lot
of solar equipment is subject to tariffs because a lot
of it comes from you know, there's a lot made
(16:18):
here in the US, but a lot of comes internationally,
and so you have to think about how costs go
up if a lot of the components are tariff do
you also have to think about the cost of the
competing technologies and how of those go up? Right? A
lot of power equipment is also even for traditionals manufactured internationally.
We also try to think through what are the opportunities
to lean in around that, and so I mentioned before,
we're invested in a number of companies focused on manufacturing
(16:40):
tech and manufacturing optimization and efficiency. If tariffs really come
into play, there's huge opportunities there because there might be
new shoring. Anybody that has manufacturing capacity needs to get
the most out of it, and so that's a big
opportunity set. There's huge opportunities in supply chain tracking, right
if all of a sudden, you need more options around
who who your suppliers are. You need to know where
(17:02):
things are coming from. You need to know where your
supplier supplier suppliers are coming from so that you know
if you're secure or not. Supply chain visibility becomes really important,
and there's just lots of interesting solutions around that that
we think are pretty exciting.
Speaker 1 (17:14):
And we're talking on a day when you know, tariffs
and China went down from one hundred and forty five
percent to thirty percent. Just before I came in to
record the interview, there was a comment from the Treasury
Secretary Scott Bessen saying they could go lower, but ten
percent is the baseline, so they could go below thirty
percent and come down to ten percent. If you look
(17:35):
at tariffs and you said there's opportunity set that comes in,
is there a particular sector that you're holding back on
in investing given the uncertainty around tariffs right now?
Speaker 2 (17:45):
I don't know if i'd say we're holding back on anything.
I think we're being thoughtful about how different tariffs might
impact different spaces in different ways. And so you know,
I touched on something like solar. If you look at
you know, storage and batteries as something with climate space
talks about a lot all of a sudden, a lot
of the batteries and components come from China, and so
what happens with where costs level out and is there
(18:08):
maybe a period of time where they go up a
little bit before they keep coming back down. It's all
about also looking at just supply chains, and our food
ecosystem is heavily globalized, and so you know, we actually
have an investment in a company that tracks food supply
chains and inventory levels and all of this really makes
inventory forecasting and monitoring, you know, even more important. There's
(18:31):
puts and takes here, but we try to make sure
we're being thoughtful about the risks and then being opportunistic
gog or where we see opportunities to lean in.
Speaker 1 (18:43):
We'll be back with more of my conversation with Greg
Wasserman after the short break.
Speaker 3 (18:47):
And Hey, if you're.
Speaker 1 (18:48):
Enjoying this episode, please create and review the show on
Apple Podcasts and Spotify. Your feedback really matters and helps
new listeners discover the show.
Speaker 3 (18:56):
Thank you.
Speaker 1 (19:08):
Now, you mentioned a number of your companies and portfolio
companies are digital, They're focused on software solutions. How has
the development of AI changed your investment strategy.
Speaker 2 (19:19):
It's obviously been the you know, the biggest trend that
everybody's talking about, and I think that it impacts everything
we're looking at on a ton of different levels. Right,
So there's obviously the physical build of AI, and you
know how that's affecting the energy space generally. And so
you know, there's been a huge explosion in data centers,
(19:39):
data center load growth. You know, if you look at
the US, we've had flat load growth for a while.
You know, it's back picking up a lot of the
projections talk about, you know, huge build for data centers
over the next decade. That translates to a lot of
load growth. We do think there's some noise in the
numbers because if you look at the pipeline of data
centers versus what actually gets built, it's it's I don't
(20:00):
know if it's a third or a quarter, but there's
a lot of duplication across the network. But the US
is in a position in the world where we just
we're back to load growth and so that creates a
ton of opportunity around new generation, right whereas that new
generation coming from solar and renewables that have been the
biggest source of new generation, and I think we'll continue
to be. So you'll see fossil plants that had meant
(20:24):
to be decommissioned coming back online or extending their life.
You know, you've seen nuclear plants that were mothballed signing
contracts to come back up. So I think there's just
a lot happening with energy generation. I also think there's
an ongoing huge opportunity in the grid and how you
make the grid more dynamic and the data center and
AI growth just just keep driving that. You don't always
(20:44):
have to have the grid size to meet demand. You
can flex demand and move things up or down. You
can shape shape the load profile with storage. You can
actually do smart things with data center loads and AI loads.
Some ALI eye loads are time sensitive, some are not,
so you know, orchestration software that determines, well, this is
this needs to run right now versus this can run
(21:06):
at three in the morning and just schedule things when
they make sense. That's sort of one window on AI,
you know. I think there's a second one around just
targeted use cases of applying AI to solving climate that
are that are really huge, in particular on I think
some of the things we're seeing on resilience just smarter
(21:26):
response to climate change and that are planning better response
in the moment. And I can give a lot of
opportunities around that, but there's just there's a lot happening.
Speaker 1 (21:35):
Yeah, I can you give me examples of companies that
you find are using AI to try and deal with
climate change.
Speaker 2 (21:44):
Yeah. If you think about the effects of climate change,
so extreme weather, some of that is longer term trends,
right just certain areas are going to be more prone
to occasional flooding over time, They'll be warmer over time.
Some of that's much more. There's a storm that's barreling
down on us right now, Like, what do we do,
and I think AI can play huge opportunities across all that,
(22:08):
in particular on the more acute side where something major
is happening and you need to get whatever data you
can to figure out what you think will happen and
then make a decision based on that. Right. And so
you know, if you are a town manager, somebody needs
to decide do we an issue in evacuation order or not?
(22:29):
You could decide that just a based on what the
storm is telling you, like is it going to hit
or not? Do we issue that? When do you issue that?
You might want to take traffic analysis into that, right,
depending on what time, how early or late you issue it,
traffic may be worse or better and give more people
time versus sitting in traffic jams. When you think about
in the moment, there's a wildfire happening, there's a storm happening,
(22:49):
people call nine to one one nine one call centers
get overloaded, People call their utility that there's power lines out,
and utility call centers get overloaded. And so if you
can have layers of AI that can help take those calls,
analyze those calls, pull in other situational data, right because
it's not just the person calling saying something's happening, but
(23:09):
you have news reports, you have data, you have cameras,
you have sensors. There's a ton of information. And so
if you can have smarter situational awareness that the nine
to one one responder or the firefighter on the ground
that's battling the fire, you can give them better information
to make smarter decisions on what to do. You can
just become more resilient, you know, especially in moments like
that where human emotion gets in the way of reasonable
(23:33):
judgment in times of stress, you know, which obviously is
critical and things like that. We even see things like
that on the corporate side, where you know, there's a
storm happening and you're an airline. Should you cancel the
flights or not? Should you reroute the planes or not?
You know, historically there's people that sit there that are
meteorologists inside the airlines that look at the data and
best guess. You can now have AI that can give
(23:55):
a smart recommendation, you know, here's what I would do.
You still have people make the decision on whether you
do that or not. But there's just so many interesting
layers of that across how you can build resilience.
Speaker 1 (24:04):
Is that something that's already being implemented by companies or
are these just ideas that are coming across your table.
Speaker 2 (24:11):
Yeah, we've seen you know, we've seen companies focused on
AI for nine to one call centers. We've seen companies
focused on AI for utility call centers. We've seen companies
that sell AI to use cameras to track look out
in fields and monitor for fires starting so you can
see there's maybe a little bit of smoke in that,
(24:32):
I think that might be a fire, and go put
that out before that happens. We're even seeing it used
in greenhouses where you can monitor how plants grow under
different circumstances and therefore, as weather changes, you actually know
how specific plants will respond to different types of heat
and water stress, and you can better tailor the nutrients
that go to them or other ways to manage that.
(24:53):
And then a lot of people don't think about this
necessarily as resilience angle, but insurance is a really big one.
You have theseynamics where people can't ensure their house in
California because of the wildfire risk, or insurers pulling out
of Florida because of the flood risk. And a lot
of that is just because it's hard to price specific
property risk and so they just look at the whole
(25:14):
area and reality is, you know, this house might be
very different than the house next door or the risk
depending on what mitigation efforts they have or not. Some
of this needs regulatory change because you can't necessarily price
insurance policies based on some of this, But I think
that's coming, and so just smarter insurance. It's part of
resilience because it's financial protection for you.
Speaker 1 (25:34):
Beyond AI, Are there other areas of technology that excite
you most right now?
Speaker 2 (25:40):
It's really broad across the board. We look at all
of the themes that we care about, and we spend
a lot of time thinking about enablers and just ways
that you can take what's already working and do it better, faster,
or cheaper. And so there's just tons of opportunities with that. Again,
it's you know, if you think about people building energy
transition projects. You mentioned the trillion dollar number before of
(26:03):
investment that's happened in the climate space. A lot of
that's infrastructure, right, people building major solar projects and you know,
utility scale solar battery storage projects and things like that
what's the data and tools and software platforms that just
make them invest betterfest or cheaper and manage the assets better.
And that's anything from data that goes into their modeling
(26:25):
on the projects, that goes into construction tech, it goes
into robotics to automate some of it all the way
through to you know, drones that can monitor plants once
they're built and make sure they're operating efficiently. And some
of the drones can even do repairs. So that's one
huge opportunity. And then we really look at broad themes
(26:45):
around labor challenges and how that translates to opportunities around
automation and robotics and where those intersect with climate benefits
just because a lot of times automated solutions are more
efficient than humans. That could be on the agriculture side,
that could be in the industrial side, and just smarter
supply chains. I touched on that a bit before, but
(27:06):
we're seeing tons of opportunity with food supply chain, industrial
supply chain that we have to look for the climate angle.
So a lot of that's around reduced waste and more
just in time, but all that translates to the current
environment of navigating shocks, which could be climate shops, but
it could also be Tarwerff stocks.
Speaker 1 (27:23):
At Bloombercgreen, We've launched a series this year that looks
at the bottlenecks that are holding back electrification of the economy. Now,
things that are beyond the obvious stuff, so not permitting
reform or high interest rates, which are issues that slow
down electrification, but they're less obvious stuff. So the first
story was looking at the shortage of transformers. We've got
(27:46):
a few future stories coming up. But from your perspective,
what kind of unusual bottlenecks to electrification are you seeing.
Speaker 2 (27:53):
I mentioned one of our companies before Span that sells
a software enabled circuit breaker panel. A huge, huge, unappreciated
bottleneck for electrification is when you take your house and
you start adding an EV Chargerdn't You didn't power your
car from your house before you do? Now because you
had any V charger. You add a heat pump instead
(28:13):
of a gas furnace, and so that's now electric powered
versus gas powered. You do the same thing on the
hot water side, you get an electric hot water heater
instead of a gas hot water heater. People are doing
the induction stoves all that stuff's great for electrification, and
these are great technologies that are better user experience. They
all use more electricity than the thing they're replacing, and
so all of a sudden, the power supply into your
(28:34):
house is a choke hold. And so one way to
solve that is get more power into your house. So
grip up the yard and add a second panel and
have the utility run more lines. The others just be
smart about when things are running in your house and
better utilize the power in that you currently have. And
so our portfolio company SPAN is really focused on that.
So I think that's a huge one around just avoiding
(28:56):
the need to build more transformers and substations and capacity
and grid build out. Just better utilize what you have.
There's even random stuff like there's been a well published
Loze shortage of electricians. Google just the other day actually
announced they were going to start training electricians. But we've
seen platforms that come up that are focused on software
for training electricians. We've even seen some interesting Jenai platforms
(29:21):
popping up around. If you think about electricians work, some
of it's designing the system, some of it's installing the system.
If there's a shortage out there of people, and you say, well,
can Jenai do a better job of designing the system
automatically and therefore the electrician can spend more time actually
installing it. You can solve some of the bottleneck that way.
And so we see a lot of interesting things like
(29:42):
that that we think are quite exciting in early days
of just getting to market, but are pretty disruptive.
Speaker 1 (29:47):
Well, you almost guessed the second story that's not yet
been published, but that's going to look at the shortage
of skilled workers. So it's a real shortage that I've
heard so many people in the industry talk about. Now
another thing that sort of I would say among left
and right and in agreement, that there's perhaps regulation that
is coming in the way of helping the energy transition
(30:08):
in some places or helping electrification in other places. If
you add the power to get rid of one legislation
and add another one, what would you do?
Speaker 2 (30:17):
The one that I would get rid of would be
permitting restrictions. It takes so long to build things. Transmission
is something we think about a lot. It takes forever
to build transmission, but even just anything, right, you know,
we were talking about electrification before, you know, somebody wants
to upgrade their house. It might take months and months
to get the permits. It might take six months to
get a you know, permit to install any V charger
(30:38):
if you need one. And so I think that reducing
you know, red tape around permitting, I think would be
a really big one. And so that's that's probably what
I would look to reduce. I'm definitely not one for
adding regulation generally, but if I were, I would probably
say that any construction decisions need to take into account
(31:01):
the future of where you're building and making sure that
it's resilient for what the future looks like. Now. That
obviously can get quite complicated. But you know, you might
be putting a house somewhere today that is fine, But
in fifty years all the data says that that might
be it might be flooded. And so instead of in
forty years from now you're starting to see floods and
(31:22):
you have to go install some our medial solutions, why
not take into account just requirements that things should be
resilient today. Things should be electric ready today. That's probably
another big one. Just building should be electric ready because
it's it's disruptive to try to build that earlier, and
so if I were to add a regulation, it would
probably be around electric ready and resilient ready. Thank you, Greg,
(31:44):
Thank you great to be here. Really enjoyed the discussion.
Speaker 1 (31:49):
Thank you for listening to zero. And now for the
sound of the week, as the sound of an anchor
dropping from a container ship. Shipping traffic from China to
the US has dropped massively over the last month, meaning
a lot more ships are spending a lot more time
(32:10):
at anchor.
Speaker 2 (32:12):
If you like this.
Speaker 1 (32:12):
Episode, please take a moment to rate and review the
show on Apple Podcasts or Spotify. Share this episode with
a friend or with someone who can make sense of
one trillion dollars. This episode was produced by Oscar Boyd
Mnoomberg's head of podcast is Sage Bowman and head of
Talk is Brendan newnam Our. Theme music is composed by
Wonderly Special. Thanks to Jessica bec Samarsadi Moses Andim and
(32:35):
Amanda Colson Hurley. I'm Markshatrati back soon.
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.