In this episode of The Middle Road, host Nishant Malhotra talks with Peter Fusaro, a renowned leader in green energy and environmental finance. The conversation offers a deep insight into the evolving landscape of sustainable finance and the transition to green energy. Fusaro, with his extensive experience in clean tech startups, discusses the vital role of innovative financial solutions like impact and catastrophic bonds in contributing to global development.
The episode explores the transformative potential of microgrid projects in providing electricity to billions and facilitating resilience against catastrophic events. Peter underlines the critical role of energy storage in empowering renewable energy sources and talks about new technologies in the Advanced Battery field. The critical spots in decarbonizing the global economy, such as the hydrogen industry and sustainable agriculture, are also highlighted.
The dialogue delves into future prospects of sustainable practices worldwide, like reforestation, agroforestry, sustainable fishing, and vertical farming. In the backdrop of climate change, the need for adaptation and innovation in energy, food, and water sectors is emphasized. Discussing the emerging significance of impact investing, the conversation highlights the role of venture capital, sovereign wealth funds, startups.
The talk concludes with the importance of measuring carbon footprints and reducing them and a vibrant discussion on the prospects of the carbon credits market. This episode provides listeners an inside look into the sustainable initiatives globally, including carbon markets, sustainable finance, and green technology. The role of public-private partnerships in driving innovative solutions to address climate change issues gets a notable mention.
Exploration of alternative sustainable energy sources like hydrogen, prospects in the mobility and transportation space, and the lack of standardization and benchmarking in sustainable finance are some of the many points discussed. The vision for a greener future where clean energy, education, and water are accessible to all closes the conversation on a hopeful note. This episode serves as a comprehensive guide to the potential of green energy and environmental finance globally.
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Episode Transcript
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(00:00):
Hello, everyone. Hi, this is Nishant Malhotra from The Middle Road.
Today I have a very exciting guest. Today I'll be speaking with Peter Fusaro.
And predominantly the theme for today's podcast is green energy and environmental finance.
So there are going to be a lot of podcasts on around sustainable finance now.
I want to first thank Peter Fusaro, who's a global leader on green energy and
(00:23):
environmental finance for speaking with me today.
So we're here and I warmly welcome you. you.
It's a pleasure to be here and share my knowledge.
Thank you. Just give a brief description. Peter Fusaro is a veteran figure in
clean energy and environmental finance with nearly 50 years of experience spanning
the private and public sectors.
He's currently a managing director at Weald & Company, a focus on financing
(00:47):
solutions for decarbonization and founded the 23-year running Wall Street Green
Summit on Sustainable Finance.
Now, this is a huge deal and I'll be be also asking a question on this particular subject.
He's passionate about accelerating the global transition to transability.
He's also authored 17 books on energy, including the best seller,
What Went Wrong at Enron.
(01:08):
So I remember there's a very good documentary, The Smartest Guys in the Room
on Enron, if you remember, Peter.
Yes, there are 22 books on Enron. He also wrote a bestseller.
Served as an advisor or entrepreneur across numerous clean tech startups and
served as an external advisory board member of the ERB Institute for Global
(01:31):
Sustainable Enterprise School of Business, University of Michigan.
Just to give also, I'm also an alum of University of Michigan.
I did my master's in public administration from Gerrit Ford School of Public Policy.
Thanks, a very warm welcome and I really appreciate taking time speaking with me.
I'll start of course is that the social finance landscape is changing tremendously.
This is including in climate action.
(01:53):
Innovative bond finance usually finance also nature-based solutions,
biodiversity, gender equity, and some of the themes like I've covered enormously on the middle road.
There are, of course, other themes in this sustainable sector. Now, from impact bonds,
wherein the Middle Road, I've designed a course on this particular subject to
catastrophic bonds, speak to how this social financing innovation would change
(02:16):
the way we raise private capital for the global development sector.
Yes, you also should add that we're starting to see the reinsurance industry
become more active, as well as the green bond initiatives.
Just to give you an overlay, venture capital in the last year and a half has
come down, unfortunately.
(02:38):
It may resurge, but we have an expression in New York, they're sitting on dry powder.
They're not deploying as much capital, about half as much as they used to.
However, who's stepping into the financial void today are sovereign wealth funds,
strategic investors that are very interested in the energy transition,
and some of the highly qualified family offices who have always been first movers on sustainability.
(03:01):
But I foresee this year is actually better than last year because there's just
an impetus now for climate solutions, and that needs more fuel,
a.k.a. money, to get the job done.
Yeah, that's true. I mean, when you talked about catastrophic bond,
that's the reinsurance industry or the industry you correctly talked about.
(03:25):
Now, you've also worked on microgrid projects. Now, one of them is based in
India, Grameen Surya Bijli Foundation in Delhi, where you work.
How do you see micro grip projects changing development sector,
both in India and other countries?
You could talk about both from an advanced country's perspective or from an emerging market space.
Actually, I see microgrids, as you just mentioned, in both sectors.
(03:50):
For developing countries, it makes a lot of sense to leapfrog technology for
those people who do not have access to the electric power grid.
And that's over a billion people globally. It's not a small number.
So they can benefit from microgrids, specifically marrying solar batteries, LED lamps, etc.
(04:10):
For the more developed world, we need more resilience due to climate change,
storms, and other catastrophic events.
So the game really is twofold. Get the costs down for microgrids.
Schneider Electric has been one of the leaders in microgrids,
by the way, and they're a big French conglomerate.
(04:31):
But we need more impetus here because, in my opinion, and the reason I did work
in India with the NGO, was we wanted to help people in the community that were
not connected to the grid.
So everybody looks at central power stations, which are large-scale,
big megawatt facilities.
We're talking very small scale, which is easily sighted. It doesn't have to
(04:55):
even be near transmission lines.
It can be nearby. And we're seeing this done in the U.S., for example,
for senior citizen homes, for police stations, fire stations,
because as we're starting to see the severity of storms throughout the world increasing and fires,
flooding, rainfall.
Tremendous events that have all been predicted, but no one really wanted to listen.
(05:19):
And now we need to make the grid more resilient, but we also have to think about
distributed energy as a much more viable solution.
You're right. Like you have, you know, one of the reasons why I talked about
catastrophic bond was also the World Bank came out with the bond in the Chile.
So, you know, of course, grid could be one of the answers.
(05:41):
And now people are also taking a lot of insurance against. So this sort of particular
innovation has come, which was already there within the private industry,
but it's come within the social impact space now in terms of sustainable development.
Peter worked very extensively in the clean tech venture capital funds,
and you also have worked in hedge funds.
(06:02):
So these are sort of on, you know, portfolio construction.
So these are alternative investments wherein you have, you know,
returns which are not normal.
So when you look at startups, which are very difficult to value,
you know, specifically in the early stage, you do not have a free cash flow
model to actually, you know, it's totally on assumptions, which you will take.
So what are the key attributes which you look for startups, especially when
(06:25):
you're looking at the clean tech sector? And then I'll ask about more other sectors.
I have vetted over 2000 companies in my career in the clean tech sector. sector.
I was an entrepreneur in residence at Columbia Tech Ventures,
which is part of Columbia University.
I've been very involved with early-stage startups who, frankly,
(06:46):
lack capital but have good ideas.
What's really the missing link and what I focus on now is the management team.
Can the people that are doing the work execute and commercialize a strategy?
It is not easy to work in a startup. I've actually been involved in four startups.
I kind of know what I'm talking about.
And so you really need to think long term. The better news is we're starting
(07:10):
to see more government funding for startups as grants and forgivable loans.
But really, the community is what we're talking about.
Here in New York, we have 400 startups within the incubators and in other countries.
And similarly, there's clusters of startups, which is good because Because there's
(07:32):
a need to share knowledge and information.
For example, if you have someone who's very good in business development in
one startup, they may be helpful to someone in the other startup and the incubators.
But this is difficult because most of them are going to fail.
It's just unfortunate. It's a fact of life. Most startups are not going to make it.
And what I've also seen, because I've been a judge in the cleantech open for
(07:55):
the Northeast, that's in Boston and New York specifically, even great ideas
coming out of MIT, IT, sometimes they're lacking things like,
does the market need this solution?
Who are the competitors? I always hear there are no competitors.
There are always competitors. So it's very important to do competitive analysis.
So it's kind of like financial models are nice. They're just predictions.
(08:21):
Management's the most important to me. Can you have the right people?
And I'm working with not a startup, a company that's burned $125 million,
but they've changed their entire management team in the last two years.
So even as they grow, they still need the best people.
And like I said, do the market analysis, do the competitive analysis,
(08:43):
and make sure there's something there.
I'm a graduate of Carnegie Mellon. I went back to Carnegie Mellon to speak to
the students a few years ago on startups, and they're saying,
well, start a company in your dorm room.
I'm not so sure everybody can be Mark Zuckerberg and Facebook.
I think, frankly, you need some skill set of knowledge to actually have a more viable startup.
(09:04):
A better idea I'm starting to see is a lot of the large strategic energy companies
and original equipment manufacturers have what I I call technology scouts.
They are looking for the next best technology. They're not going to invent it themselves.
They're going to invest in that technology company and probably,
(09:26):
down the road, acquire that technology company because startups really are the
lifeblood of innovation and entrepreneurship.
They're not big bureaucratic behemoths. They're pretty small,
10, 20 people. Some are a little larger, but really people with a good idea and do execution.
And what I coach people is get a large strategic investor involved.
(09:50):
So, for example, I'm involved with a company with reversible hydrogen fuel cells.
They won Shell Game Changers. Another company, which I'm helping out a little
bit, called Voltpost, to plug in for EVs from Lightposts got very big investors
involved from the energy sector.
(10:10):
So in this case, Exelon and another utility. So you need to have,
Some guidance from the large companies, they can be very helpful because they
can give you a value proposition that's higher.
They can give you the use case that's better. Do we need this technology?
And as I said, they are scouring new technology companies all throughout the world.
(10:34):
It's not like all siloed in New York. It's everywhere.
So the point being, the startups need money, obviously, hired good people.
Sometimes those people work for sweat equity. They don't get paid anything,
which is, I think, unfair, but that's a fact of life.
And we just see a tremendous movement from startup now to accelerators.
(10:58):
So there's a lot of talk about accelerators, which are a little more advanced
stage startups, and then movement into commercialization scale.
I don't foresee everything being an initial public offering.
I see a lot of what we call trade sales, large companies buying the startups.
And just to put it on the table, energy is 73% of greenhouse gases.
(11:21):
So the energy sector is front and center, the most opportune time for decarbonization.
We're talking probably a trillion-dollar
ticket in the next 30 years to decarbonize the global economy.
And so when you look at like areas, which areas will be bullish at the present?
(11:42):
Like, you know, this is a very vast segment, clean water, sustainable agriculture.
That is where I think some of the things are happening. Sustainable agriculture,
which I keep, you know, hitting on.
Energy efficiency, of course, has been going on for a long time.
Or into sustainable infrastructure and buildings.
How do you think, how would you rank some of them?
I'm very involved in hydrogen. So pushing past EVs, hydrogen for power production, hydrogen.
(12:08):
Fuel cell vehicles. I think energy storage is seminal for solar,
wind, and all the intermittent renewable resources.
And I went to an advanced battery conference that the Department of Energy put on in New York last week.
And there's a lot of interest now from large companies to get more larger facilities for energy storage.
(12:32):
I'm talking advanced battery technology, fuel cell technology,
new kinds of batteries, not just lithium-ion, but zinc-air batteries, airflow batteries.
This is material science play, and it's even a nanotechnology science play.
So those are the areas that I'm focused on.
The more mature markets, obviously, are solar and wind. Solar costs have come
(12:55):
down, as we all know, about 95% from 15 years ago, and that's made that readily
deployable around the world. You can deploy solar energy everywhere.
Wind costs have come down about 65%. What's happening in that sector,
they're building larger turbines.
So they're re-footprinting existing turbines for larger facilities.
(13:16):
And in the US, we now have the beginning of offshore wind, which is much more advanced in Europe.
And even parts of Asia, like Taiwan, have offshore wind.
So that's a technology play using kind of oil and gas platforms to put technology on those platforms.
So those are the ones I'm focused on. I've also looked pretty heavily in nature-based solutions,
(13:39):
agroforestry, repurposing distressed land, using biotechnology to create better
value for farmers and also pay those farmers, farmers, as well as replant trees.
So that's sort of a reforestation play as well as an agroforestry play.
And lately, I've gotten more involved in sustainable fishing.
(14:01):
As we know, due to climate change, the catch of fish is declining,
particularly in northern climates like Norway, Alaska, and New Zealand.
And so there's now a school of thought to perhaps site fish farms in southern,
warmer waters. And so, I'm involved with a company doing that offshore Panama, offshore Bali.
(14:23):
Because protein is going to be very seminal going forward throughout the world
as the population continues to increase.
And I think fish are going to be a supplement to red meat in many jurisdictions.
I don't eat red meat, for example. I choose not to eat red meat.
But other people will start moving more. So, the demand for protein is going to get bigger.
(14:47):
And I think there'll be a greater opportunity. The problem I've seen on vertical
farming, however, I've seen no one have a real successful model.
And I have worked with a vertical farm in Brooklyn.
It's difficult to scale, commercialize. And yes, you can make green leafy vegetables.
You can make spicy leafy vegetables. But it's kind of a niche market.
(15:09):
And we haven't seen a model. And hundreds of millions of dollars have been deployed
in the sector with plenty, with arrow barrel farms, et cetera.
We have not found a solution for vertical farming, but sustainable agriculture
front and center is very important.
How we grow our food, can we provide food for more people?
I mentioned the need for protein. So that's also important. And then you mentioned water.
(15:34):
So my holy trinity is energy, food, and water.
They're the world's three largest businesses. Energy is a $6 trillion business.
Agriculture is a $5 trillion business. Water is a $3 trillion dollar business. So size does matter.
All of these sectors are impacted by climate change.
And we just have really good thinking going on that people say, how can I do this better?
(15:59):
Do I need a technology fix? Do I need more money to scale? So I'm actually quite
enthusiastic for this year, 2024.
I know people last year were a little hesitant in the venture capital space,
But that's starting to shift to sovereign wealth funds, which are now investing
in startups for the first time.
We're seeing a lot more activity because in the past, they've looked for what
(16:22):
we call big tickets, $50 million, $500 million.
They're starting to go downstream to smaller tickets.
Viable startups don't need a lot of money to get going.
$1 million, $2 million, $5 million, $10 million. Where I sit,
I work with more advanced companies.
We raise $25 to $100 million for these companies to scale and commercialize.
(16:44):
But the good news is there's lots of people in the sector.
The bad news is academia is a little behind this sector.
I've worked with Stanford and Oxford in the last three years.
They've just set up sustainability colleges. And so we need more programming
from academia as well as movement of technology.
(17:09):
Which is mostly engineering or applied engineering solutions.
So I think when you look at sustainability writ large, you have to look at everything.
You have to look at architecture. You have to look at engineering.
You have to look at finance. You have to look at behavior. You have to look
at communication. communication.
I mean, AI is getting a lot of play in the sector, which is good,
but it can't do everything. We still need human beings that are trained.
(17:31):
So there's a lot of emphasis now on what we call in the US workforce development
to retrain workers to work in this new sector, which I'll just call sustainability.
It really didn't have a name. So at Columbia, they call it the climate school,
and Stanford, Oxford have different names. Everybody has a a different name. It doesn't matter.
(17:54):
Point is, this is just starting to move.
The better news is the last three years, we've actually seen this sector starting
to mature for things like ESG investing, for things like carbon markets.
There's a lot of opportunity that really wasn't there before.
Thank you. You know, that was a very in-depth analysis.
(18:15):
And, you know, hearing you, there are a couple of questions that came in.
First, I just wanted maybe, you know, I'm not very familiar with the term when
you talk about vertical farming.
Are you speaking about sustainable agriculture? Yes, I'm talking about basically
indoor agriculture, inside buildings.
Using aquaponics, using the fish poop as a nutrient, using LED lamps so the
(18:40):
plants get lighting, and using advanced computer technology.
That's kind of it in a nutshell.
So it's really indoor agriculture. culture
yeah you see it in a lot of movies also
in hollywood movies or you know a lot of things which are also coming out
from europe us and europe i i we
i've seen that happen but of course it it's not
(19:00):
on a very grand scale like you really mentioned that
it would take some some sort of an idea or you
know out of the box thinking i wanted to just follow up on
a couple of things when i talked about clean energy sustainable
agriculture i was also reading the chris report a lot
of fantastic work is going on in the u.s now i mean in
the sense from there i got an idea you know you talked about
(19:21):
reforestation you talked about sustainable like
buildings that's where i started getting an idea
how they're trying to improve the efficiency of infrastructure or
buildings also and you know so many things which you
talked about so you would you say that you know action i
think europe is doing a lot of a lot good work now u.s is right on the top of
course you know china is is doing India is also doing Singapore also on the
(19:43):
you know if you look at the Asian countries in Japan you know one of the best
from the first countries in the world actually to come out with the AG matrix
I think for the pension funds a lot of work how would you are you really satisfied
with a lot of things which are happening in the US now?
Yes. Don't believe the headlines. Trump's going to do this and climate's denying.
Look, this is how it works. Most of the jobs in clean energy are in Republican,
(20:08):
what we call red states already.
They're not going to stop 300,000 solar jobs. I'm just giving an example of one sector.
We're just starting to build an offshore wind force in in the Northeast.
If you want to listen to the headlines, oh, this pension fund from Florida,
this pension fund from Texas can't invest in ESG, so what?
(20:32):
They are losing what I used to call environmental alpha.
They're not going to get the benefit of many of these companies that are going
to be extremely profitable in this sector.
Directionally, the US, under the Biden administration, with the climate bill,
(20:52):
but they also had the infrastructure bill and the CHIPS Act.
So there's a lot of government funding going out the door right now to about 2030.
I've worked as a policymaker many decades ago at the Department of Energy.
So I've worked in the private sector, and I'm more focused on private sector
monies. Now, where is that money coming from?
(21:13):
Strategic investors, energy companies, original equipment manufacturers,
people that actually understand their space and need to innovate.
Sovereign wealth funds, big ones, Norway, Abu Dhabi, Singapore.
These are huge funds, which I've talked to, and they are very active.
Family offices, very wealthy families want to give back.
(21:36):
They have made hundreds of millions or billions of dollars, very active in what
I'll call the impact investing space.
So you can hear things that things have to have a purpose, investing with a purpose.
But my game is impact investing.
This has a benefit to humankind.
(21:58):
And the game very simply is human health and welfare.
So I'll just take you back on my journey real quick. I've worked on air quality
issues my entire career,
taking the lead out of gasoline with with the Environmental Protection Agency
in the 1970s, working on the Prius in the 1990s with Toyota.
(22:19):
Always about air quality. Air quality is still a killer. Over 9 million people
last year died from air pollution.
It's a problem. It's a problem. It can be fixed.
When I was told that we couldn't take the lead out of gasoline,
we have gasoline shortages, I said, no, we're going to go do this.
And the private sector innovated because engineers solved the problems and there
(22:42):
were no gasoline shortages. So what I'm getting at, if you can,
Frame public policy with a regulatory outcome that is beneficial.
Let the private sector innovate. In other words, don't pick technology winners.
You'll be very surprised how innovation and entrepreneurship,
and even in large corporations, they call it intrapreneurship.
(23:05):
You'll see them innovate, do things differently, because it can't be the same way.
We are in the beginning of a transition to sustainability, just the beginning.
As I mentioned before, the $100 trillion that came out of my conference last
year, and now it's all over the internet, nobody's denying it's going to be
a very large number to decarbonize, to get sustainable, to start moving things.
(23:31):
So I'm actually starting to talk about the energy transformation rather than transition.
This is an industry that's going to be around.
Energy is the world's largest business. People need transportation, mobility.
People need heating and cooling. People need lighting. So it's sort of there.
It's very ever-present.
And it's how the fossil fuel industry adapts to this change is really what's going on right now.
(23:56):
So for example, there's a lot of impetus now to capture methane.
Methane emissions leaks are 22 times the carbon intensity of CO2,
carbon dioxide. It's a big problem globally.
So what they do is flare gas, pipelines leak. That's going to be solved.
The Biden administration is already working on that. There's a company called
(24:17):
Cefiro Methane, which is looking at carbon credits for this.
So people can look at some innovation in how to solve a problem,
not looking at it the same way we used to look at it. And don't forget,
we're talking about a very massive business.
Every country has an energy industry company, an electric and or gas utility, or several.
(24:40):
The U.S. has almost 45 utilities, a little different than most countries.
So there's a lot of innovation occurring. And what they're starting to talk
about the last five years is the utility of the future.
What is that going to look like? Is that going to be a utility of microgrids,
like we have some being built in Brooklyn?
Is that going to be a utility that has batteries and energy storage and solar
(25:02):
on rooftops or solar on ground?
This is a very different world we're entering.
We are going to start looking at measurement of carbon intensity in many different
manifestations. manifestations.
And the thing to really watch is scope three emissions, all the way down the
value chain, because we're now starting to see companies like Apple Computer
(25:23):
asking their suppliers in Taiwan to measure their carbon footprint.
So the first step in this journey for many corporations is to measure the carbon footprint.
That gives you a number, but that doesn't give you a solution.
You have to do the other side, which is how do you reduce that carbon footprint?
And that's where where the innovation is catching on. But many software companies
(25:47):
in the last two and a half years have been funded over $100 million,
100 million euro just on the carbon accounting.
That's an important part of this, because you have to measure,
verify, and then bring in the solutions providers.
So that's why we're just starting on this. And my own opinion is,
(26:07):
by 2030, no large corporation will be carbon neutral without buying carbon credits.
And that market has been sized by Wood Mackenzie and Edinburgh Scotland at $22
trillion, which would make it the largest commodity market ever created.
Well, that's fascinating. I mean, to hear, you know, of course,
(26:29):
there's a carbon tax in Europe.
That's a great way of, you know, actually even negative externalities because
of the carbon. So yeah, a lot of work.
And like you gave a very good reference that about 100 million euros is the
sort of amount spent by you on carbon accounting. Am I correct here? Yeah.
(26:49):
That's fascinating. It was, it's, I'm having a senior moment here, Patch.
Check out Patch Software and Silvera, both those companies. One's in the UK, one's in France.
Okay. In the US, two got funded. One's called Watershed and the other's called Persephone.
So that's four that I know of. And I've never seen so much money poured into,
(27:14):
I'll call them, you know, later stage startup, carbon accounting companies,
and they have all the bells and whistles.
They do measurement all the way to the desktop.
They're using machine learning, AI, all the tricks of the trade, but it's necessity.
Those clients have the need. Most corporations can't measure their carbon footprint.
(27:38):
So there's two markets here. One are large corporations. The other are private
equity funds, which have portfolio companies, which also need to decarbonize.
And here in New York, for example, there are 4,000 private equity funds.
There are thousands of these companies.
You correctly mentioned, you know, you want to drive in private capital and
(27:59):
then you have to have regulation.
So you need a PPP, which is the 17th system development goal and public private partnership.
That's how the world, that's how I consider that, you know, that's how the government
would enable or facilitate the creation of innovation within a lot of these areas,
which has been like you described as a market failure, because they've not been
able to sort of find a solution.
(28:21):
There's no one solution. That's the first problem. The second problem is every
part of the world is a different fuel mix. It's not uniform. It's not simple.
That's why there won't be one global carbon market. Same problem.
Emissions are different in different areas of the world.
Secondly, the coverage isn't there. So what you're describing is the compliance
market, which we have in the EU, which we have in California,
(28:43):
which we have in Quebec, other parts of the world.
But that doesn't cover the whole market. So we need a larger plan,
which we've now started to see gestate in what's called the voluntary carbon
market. It's small. It's growing.
But that will start becoming a larger market because companies,
particularly if I'm a corporation, I can't have reputational risk buying bad carbon credits.
(29:08):
They have to be very well ratified, verified, and validated.
I'll give you an example, and most people don't know this. Amazon worked with
Vera, which is the voluntary carbon registry, for a new standard which came
out in December called Abacus.
Abacus is the highest standard of carbon credit for nature-based solutions.
(29:31):
So, even corporations want that rigor for buying credits because they can't
have a bad reputation, become a bad actor.
So, you're going to see a movement more towards standardization at higher standards
for the voluntary market, and that's going to be a very big market.
Hmm that's true actually before i come to the next question which is on tax tax and money i,
(29:56):
wanted to also follow up on other things so you talked about a lot
of innovation which is happening within batteries right now i think
one of the most innovative companies in ev sector is tesla i
mean it defined the whole sector then there is another company which is in china
which is coming up is byd and byd is actually known to have more efficient batteries
am i correct here do you think that could have been an anchor point for some
of the innovation that people are looking is to have better batteries because
(30:19):
it's going to make EV market much more sustainable, more cheaper, maybe more affordable.
Exactly. And if you look at EV sales last year, they were 18% globally.
So we're now starting to see the hockey stick in EV and we need better batteries.
One of the companies I work with, they use a nano coating to reduce the heat
(30:40):
of lithium ion batteries.
Everybody knows lithium ion battery is hot. You feel your cell phone,
you feel your your laptop. It is hot.
And so that's a problem. So we need better material science and better battery manufacturers.
I don't care where the batteries come from, if they're better.
Tesla was the first mover. You have to understand, they were the first mover.
(31:00):
The world is going beyond Tesla. There's going to be many different opportunities
in a battery space, but also in the mobility, transportation space.
Like I said, I'm very involved with fuel cell. But fuel cell vehicles are a
very small part of the global markets.
It's basically internal combustion engines moving to EVs, which are growing
(31:23):
rapidly, very rapidly, and then a very small segment for hydrogen.
Now, why I like hydrogen so much, because I've driven hydrogen fuel cell cars,
and I've looked at the tailpipe, and it makes water vapor.
So hydrogen Hydrogen is the most abundant element in the universe,
and the emission is water vapor.
(31:44):
I don't know how many years we are away. I've been involved with something called
the Hydrogen Council, which is now about 200 corporates in Brussels.
So we're starting to see very large companies get very involved in hydrogen.
Doing things like switching out methane, CH4, and using hydrogen in equipment.
So they're testing it. Green hydrogen, that's what you're saying, right? Yeah. Yeah.
(32:07):
About, I mean, a couple of, there's a lot of use of that in electrical trains and high-speed trains.
It's been used in Europe. It's being used also in China.
I think India took a couple of trains, also using green hydrogen for,
you know, so I think that's one of the areas where there's going to be a lot of, that's very true.
And this could be within the parlance of mobility within the railway sector
(32:32):
also. Yeah, they've also used it in shipping.
Norway and Japan have had hydrogen ships, but this is small.
The point is we need a global fleet of tankers is not running on hydrogen.
So the point is, it's here.
Can we accelerate that? So my mission, and I've been in this sector since Earth
(32:52):
Day 1970, my mission is to accelerate and commercialize solutions.
And people used to laugh at me when I used to tell them I wanted to make the
world a better place. But I've been to 50 countries. I've been all over the world.
We can lift all the boats. Why should people suffer health risks using energy?
It should be cleaner. And it can be because all of a sudden,
(33:15):
we call it bending the cost curve.
All of a sudden, something that was very expensive becomes very affordable.
And we've done that already with solar. And we've done that with wind.
We're going to do that across the board. You're going to see this with batteries as well.
I think of Germany and France are doing a lot within the green energy space, in the green hydrogen.
That's what I had read about. Maybe I'm not. Running trains.
(33:36):
They're running trains. Yeah.
Next question is, you know, thanks a lot. I mean, that was a very detailed discussion
on one particular topic.
And I think we had a very deep dive on this. That was an excellent discussion.
My next question, of course, is on tax monies. You know, Singapore recently
launched tax money for sustainable finance.
Now, how do you think that we change the sustainable finance globally?
(33:57):
I believe a lot of people are doing. Tax monies are very important.
WHO has done a lot of work within this space as well for different things.
And EU, of course, has been taking a lead over much in green space.
Now, what would your thoughts be on that?
I don't quite understand. You talk about taxonomies for sustainable finance.
We don't have that yet. That's the problem. We have no standardization.
(34:20):
This is what's lacking in the ESG sector. We have a lot of different companies
reporting on ESG, but what are they actually measuring?
So I spoke at the CFA Society almost four years ago now about working together
to create common standards.
Now, I know that sounds very simple, but companies are making a lot of money
(34:42):
selling their data. So they have not done this.
So it's a real problem because what are you measuring? What are you reporting?
What are the accounting standards?
We don't have uniformity. And I don't know when we're going to have it,
but we need that. It would be very helpful for the sustainable finance sector to benchmark that.
But like I said, that hasn't happened yet.
(35:03):
Singapore has launched. I think some work is going on in the Asian sector also.
I don't think so they have launched
it, but there's some sort of framework being put in for in that space.
So yeah, that's true that we need a taxonomy and people actually,
and we are actually moving towards that.
I think that's going to standardize a lot of things in ESG that will make it
(35:23):
much more simple, that make it much more easier for accounting purposes.
Now, when you look at clean tech, and you spoke a lot about clean tech,
that's a sector which is more within the business and development sectors.
See, clean tech impact for the less or the underprivileged section of the society.
Where do you think that could be? Well, I think the analog I'll give you is cell phones.
(35:44):
So when I was in India in 1970, 1996, people were buying cell phones.
And I couldn't figure this out. And I was asking people, why are they buying
cell phones when they're not connected yet?
The point being, you can go from not using landlines to cell phones.
I mentioned before, you can go to the microgrid and bypass the central power
(36:06):
station, which is extremely expensive.
I think there are opportunities in what people are now starting to call the
South, the emerging South,
to use better technologies that may be developed in the North,
but can be deployed where there's a mass of humanity and go faster.
(36:27):
So, we can see the innovation, the initiatives, but as I said,
my own attitude is the technology can come from anywhere.
It is not siloed in the US or China or Singapore or Japan.
It's everywhere. everywhere people are looking at this question
(36:49):
how do i fix it how do i
make the world a better place through reducing carbon how
do i make energy more affordable for more people how do
i make water more affordable how do i make education more affordable one of
the things i was working on in kenya was to basically go from fixed landline
cell towers and bring it to mobile and these gentlemen are still working on
(37:12):
that they start bringing it into kenya can roll it all across across sub-Saharan Africa.
The point is being there's no obstacle to that.
Capital is an obstacle, I guess you could call it that, but the innovation is
there. The need is great.
If you travel like I have traveled, I have traveled to developing countries
as well as developed countries.
(37:34):
Many Americans don't see that. They don't know. They're unaware. aware.
If you're aware and more people are traveling globally, you have more opportunity
in my opinion to transport ideas and better information and more knowledge.
Unfortunately, there's no clearinghouse for all of this. There just isn't.
But there are some side pockets of intellectual capital, like some platforms
(38:00):
are starting to... I'm not saying they're a library, but they're starting to get more uniform.
Actually, I did ask about EVs, but, you know, there was a follow-up question.
And I think I'll sort of anyway ask about that.
You also mentioned that you worked with Toyota Prius development team on power issues.
(38:20):
That was in the mid-90s. The electric vehicle segment has, like, drastically changed.
Of course, Tesla, I talked about, then VYD, but then GM, Volkswagen,
Toyota, Stalantis. And they are all, you know, we have upstarts like Rivian,
Lucid Motors, Polestar, Zengpen Motors.
I don't know how to pronounce Peng or Zengpen Motors. Also doing some fantastic work.
(38:43):
Now, why I'm trying to ask this question is not about only innovation and batteries.
For example, battery swapping is something which I think the first idea came
to Israel. There was a company known as Betterwork.
Very bad idea. Very bad idea. But then maybe because the country was much smaller.
No, it's a dumb idea, battery swapping.
The better idea is building infrastructure for recharging.
(39:06):
So what's going on there? I mentioned Voltpost.
Voltpost is a small company here in New York that you can plug into your EV into the lamppost.
Another one's called Hevo Power. Hevo is wireless recharging of EVs.
So we're starting to look at a need for better infrastructure for EV charging.
(39:27):
But then there were certain roadblocks, at least in the U.S.,
and there was a report that people are not able to, that you need to put a full interception in space.
Do you think that maybe something like, which is like more of a hybrid,
could also be a good idea at this point in time?
No, not anymore. I think the market's passed them by. I think Toyota's starting
to get on the EV bandwagon now.
(39:49):
But it's really an infrastructure issue. We don't have enough recharging centers.
That's what we need. Some of the ideas were to put the recharging centers next
to the railroad stations so people could drive their cars there.
We need more infrastructure. That's the biggest hurdle.
And the point is, there's also what level.
So I rented a Tesla, and I drove 100 miles from here to a hotel,
(40:13):
and I put my battery, put my recharger into the car, and it took eight hours to recharge.
And a friend of mine said, well, you know, Peter, it gets cold.
That's going to discharge the battery. And it did.
That was called level one batteries of recharging. Very slow. Too slow.
So we also need fast charging. So we started to look at level two, level three.
(40:36):
It's you know it's like here's the first generation
okay we got started now we're
like two generations above that and so
we have to have better technology fast charging
basically more easily deployable not
too expensive etc so it's this is the numbers i'm looking at for evs are astronomical
(40:59):
and then the source i'm looking at is bloomberg nor energy finance you could
go download from them they put out a report usually in february do all the different
cleantech sectors it's free and the point is we don't have we don't have enough.
Infrastructure for recharging yet that's so chicken in the egg maybe i want
to go electric but where do i recharge and you can actually do the search on your iphone.
(41:24):
And I think we, of course, demand is not exponential. That's true.
It's changing around globally.
There's a company from WinFast that's sort of made a headway.
It's coming to the, it's already there in the US.
You're absolutely correct. Sort of take an analogy, like when we had,
you know, earlier mobile phones that took a lot of time, just a five to 10 minutes
charge could last you for, you know, a couple of hours or more.
(41:45):
So I think that's how the battery would also change when you are speaking of EV.
It's going to go up and much better and much better over a period of time.
Maybe a shorter period of time you'll have much more focus on
that because now there's a demand there is a sort of a market for
ev i talked about this experience you have eight years as an
ex you worked as an external advisory board member at erb institute for global
(42:07):
sustainable finance at ross school it's a fascinating school ross i did two
electives there it's a very good school at university of michigan and our book
how was the experience you know you you sort of have won a lot of hats in your
life and this was more of an academic things you have done a lot you You spoke,
you were doing work at Columbia.
You went to Carnegie Mellon at Pittsburgh, a fantastic city.
(42:30):
What was your experience and your takeaways from your work at University of Michigan and Arbor?
Well, the University of Michigan's program was unique at the time.
I'm not sure today, but it was basically an MBA in the Ross School of Business
and a finance degree and an MA in the School of Natural Resource.
(42:51):
It was a double degree, very rigorous.
And we downsized the program to 30 people a year.
So it's a very small program, maybe 500 graduates total in the last 25 years.
However, the reason I was attracted, the students invited, I gave a talk there
and they said, why can't you be on our advisory board?
I was also on the advisory board of Bard College, MBA in sustainability.
(43:13):
At Columbia, I was a professor teaching renewable energy project finance to
second year grad students.
So my thesis is very simple. Thank you.
We can't make transformative change without young people.
And I committed myself to this almost 25 years ago.
I've mentored over 300 young people, specifically on their career development.
(43:35):
I've opened doors for them. They get jobs.
Tomorrow, I'm meeting eight young people every hour on the hour at the Cornell
Club here in New York City.
I just firmly believe that it's important to mentor young people in this sector,
as as I've mentioned, doesn't have a lot of academic rigor yet.
And we'll call it sustainable finance, for lack of a better term.
(43:58):
My mom was a college professor.
So my role model is a little different than most people. So I've worked in policy.
I've worked in academia. I've worked in technology. And I've worked in finance.
Yeah, I wear a lot of hats.
And they all are interrelated. So they're not simple. But I'll give you my joke now.
So I told the people at the University of In Michigan, I had a call option on
(44:22):
young people. Then they always laughed at me because that meant in the money.
I'm very committed to the next generation or generations because it's very important.
This is the world they're inheriting. This is the world they can make great changes.
And one of the things also I want to follow up is like you talked about the dual degree.
(44:43):
So they had a dual degree also with public policy. I think it runs for three
years where you get an MBA degree and an MPA or MPP degree.
I'm not exactly sure how that works out, MP or it's MPP.
Now i know because a couple two three people from my
badge or bad senior were actually involved in you
know a dual degree and if the right time
(45:04):
is of course when you're pretty you're much younger it's much easier to bend
your mind or you know to sort of change your views because it becomes much more
difficult as you outgrow or as you grow with age i mean change is of course
constant but change might not be that significant as you age over a period of
time and that's good you you You know,
I have a lot of interest in mentoring students.
(45:25):
Now I come to another very important question. You have been,
you know, at the forefront of Wall Street Green Summit on Sustainable Finance.
It's one of the largest of its kind.
What prompted you to start this event? Because when you started,
it wasn't like green was a major, major name at that point in time.
(45:45):
You're much ahead of the curve, you'd say.
I was 25 years ahead of the curve easily. easily people
on wall street thought i was different two people
at one of the exchanges thought i had two heads because i was talking about renewable
energy 25 years ago and a
woman came to me says i want to do a conference on negawatts and i said no no
no nobody cares about negawatts you know this is amory lovins not not using
(46:10):
energy energy efficiency and i said no we're going to do a conference on negawatts
energy efficiency carbon and renewables and then we We got started and at different venues,
McGraw Hill Conference Center, Bloomberg, Reuters, New York Times Center.
And I've had 9000 people come to the event over 20 years.
We'll have 200 people at the Canadian Consulate next month. Well, March.
(46:34):
I do it once a year.
Deliberately. It's my brand. People know it.
And in New York, from what was like, I just want to make money,
they have an expression in Wall Street called the edge.
I just want the edge. Everybody has the edge. Well, now it's the environmental edge.
Now it's a way to make money doing the right thing.
(46:56):
Those are the terms I invented, green trading, green finance,
almost 25 years ago, deliberately, because I want the outcome.
That's what I'm concerned about, the outcome.
How do you make the world a better place? You can't just say that.
You got to do the work. And I've done the work.
That's the difference. You just can't write a paper about it. You got to go do it.
So I've just decided. The nicest thing that's happened to me is one of my students
(47:22):
from my class at Columbia is now the CEO and founder of that wireless recharging company.
Another of my students thanked me almost 20 years ago to get her started on
environmental finances. She's on the board of directors of Vera.
One of them's at the World Bank running
a clean fund. Another one's at ESG manager at a big fund in New York.
(47:44):
So I'm kind of pleased that I've had the opportunity to mentor the young people
en masse, many more than you realize.
But the reason is we have to make the transformation together.
We have to build the community. It's a global community.
It's not going to COP. I don't go to COP. It's not 70,000 people doing press
(48:07):
release. I'm talking about the hard work.
My dad had an expression. It's called heavy lifting.
This is the heaviest lift we've ever seen, climate change. This is hard.
Believe me, if it was easy, everybody would do it, but some of us want to do
it. And look, I tried to message during COVID that there's a correlation of
(48:28):
infectious disease and climate change.
Nobody wanted to hear that. And I worked with Harvard Medical School,
Swiss Re, at Columbia University on that almost 23 years ago.
So there's things you don't even think about.
Oh, a virus couldn't be impacted by climate.
Of course it can. Insect-borne, water-borne, but nobody wanted to hear that story.
(48:51):
So I've done a lot of things people don't want to hear about but I just have
one trait I'm extremely stubborn,
and my wife has an expression don't quit before the miracle so I just don't
quit I don't quit, I'm still here I'm still standing,
and from, people come up to me you know, my wife works for Apple Computer and
(49:15):
we're doing green stuff, you stick out like a sore thumb on Wall Street,
not anymore not anymore more.
They had to change. They couldn't see the change because they had to make money
doing the change. That's okay.
But that made the change. This is huge. This is the biggest business opportunity we've ever seen.
(49:35):
Talking about decarbonization, I'm talking about carbon markets.
I'm talking about innovative, clean technology.
I'm talking about transitioning energy, food, and water. This is huge.
It's never happened before.
The good news is the whole world can do this.
Look, I was eating organic food in Pittsburgh in 1970 at a food co-op.
(49:56):
How many years ago was that?
People, you're a student, you're eating organic food. Well, now it's very mainstream.
What I've learned is change takes time.
Sometimes too long. Yeah, that's true. I actually went to a vegan restaurant
in Seattle, and I think it was a buffet, and it was one of the best food I ever had.
(50:16):
Things are changing so much. Although I eat non-vegetarian food,
white meat, chicken or fish, very rarely red meat.
But to come to the last question, I think we had a very detailed discussion,
very informative, and it was a very classic discussion. I think there's so many points covered.
It will be such an interesting discussion for anybody who wants to know what
are the latest technology, what is happening in the green finance space.
(50:39):
So I really want to thank you for that.
So the last and of course the final question is always the aha question.
Whatever experience you want to share, you could share one experience or many
experiences here that, you know, brings happy thoughts?
Well, the experience very simply is building community.
That's what I'm up to. So I'll just give you an example.
(50:59):
Some friends from the hedge fund community came to me and says,
well, how about if we do a virtual cap intro event with your conference now?
We haven't announced this yet. We're going to announce it soon.
I said, OK, because you've got to marry investors to technology people.
So my game, very simply, is there was no community.
So how do you build the community? The good news is there is an amazing,
(51:22):
sustainable community now.
I mean, I remember something called the Carbonauts.
There are climate tech cocktails. There are people looking at sustainable fashion.
What's happened is this thing has exploded in every direction and every manifestation
of every discipline of every business in the world. It's there.
(51:44):
That's what's changed. And it's taken 50 years. Don't forget,
it's Earth Day, April 22nd, 1970, in Pittsburgh with my Solar Power t-shirt.
That's 54 years ago.
I think we are in the most best of times, to quote Dickens, because now's the
(52:05):
time for innovation and creativity.
And it's coming from all age groups, but I bank on the young people.
So the young people are the army, and the older people are the commanders.
It's fine. We've never had this opportunity.
(52:26):
And by the way, it never had any of these names. It wasn't called Green.
It wasn't called Sustainability. It wasn't called anything.
Anything. It had no name. That's true. That's true.
Even I, when I see young people, I feel the same thing, you know,
that I should mentor them or, you know, the other sort of energy,
which is going to take forward.
(52:47):
Like you said, you know, the older kinds, they are more of commanders or,
you know, how they're going to be different. Give me an example.
Tomorrow, I'm meeting with somebody from the Maldives. I'm meeting with somebody from Australia.
I'm meeting with somebody from two people from India.
That's a typical day in my life. Of course, I live in New York City with 200 nationalities.
(53:09):
Everybody's here, but that's the world I live in.
They're all different cultures, all different peoples, but they're all interested
in the same thing. The greatest city in the world, New York.
I mean, that's a city to be.
A city which is of different level, fantastic experience.
Living in that city and, you know, living, being in that place itself is so
(53:29):
phenomenal that nowadays New York has also become one of the startup hubs.
Like you said, I think you mentioned that there are thousands,
4,000 maybe in Chukot, Harmony, but it's just become another Silicon Valley
sort of. It's become a climate tech city.
That's what's happened here. It's just started to get branded as that.
But a lot of people you don't know have done a lot of hard work to make this happen.
(53:53):
Thanks a lot. You could add if I missed out something, but I think we had a
very, very detailed, very informative discussion.
I really want to thank you. You took time. We have such a busy schedule,
but I'm glad we had this conversation.
If you want to add any message or you want to talk about anything which I could
have missed out, you're welcome to do so. No, but thank you very much for inviting
(54:15):
me. This is the time for sustainability.
That's the key. That's the punchline.
Okay. Thanks a lot. Thank you very much. Keep in touch. Bye-bye.
Hello, everyone. Hi, this is Nishant Malhotra from The Middle Road.
Today I have a very exciting guest. Today I'll be speaking with Peter Fusaro.
And predominantly the theme for today's podcast is green energy and environmental finance.
So there are going to be a lot of podcasts on around sustainable finance now.
I want to first thank Peter Fusaro, who's a global leader on green energy and
(00:23):
environmental finance for speaking with me today.
So we're here and I warmly welcome you. you.
It's a pleasure to be here and share my knowledge.
Thank you. Just give a brief description. Peter Fusaro is a veteran figure in
clean energy and environmental finance with nearly 50 years of experience spanning
the private and public sectors.
He's currently a managing director at Weald & Company, a focus on financing
(00:47):
solutions for decarbonization and founded the 23-year running Wall Street Green
Summit on Sustainable Finance.
Now, this is a huge deal and I'll be be also asking a question on this particular subject.
He's passionate about accelerating the global transition to transability.
He's also authored 17 books on energy, including the best seller,
What Went Wrong at Enron.
(01:08):
So I remember there's a very good documentary, The Smartest Guys in the Room
on Enron, if you remember, Peter.
Yes, there are 22 books on Enron. He also wrote a bestseller.
Served as an advisor or entrepreneur across numerous clean tech startups and
served as an external advisory board member of the ERB Institute for Global
(01:31):
Sustainable Enterprise School of Business, University of Michigan.
Just to give also, I'm also an alum of University of Michigan.
I did my master's in public administration from Gerrit Ford School of Public Policy.
Thanks, a very warm welcome and I really appreciate taking time speaking with me.
I'll start of course is that the social finance landscape is changing tremendously.
This is including in climate action.
(01:53):
Innovative bond finance usually finance also nature-based solutions,
biodiversity, gender equity, and some of the themes like I've covered enormously on the middle road.
There are, of course, other themes in this sustainable sector. Now, from impact bonds,
wherein the Middle Road, I've designed a course on this particular subject to
catastrophic bonds, speak to how this social financing innovation would change
(02:16):
the way we raise private capital for the global development sector.
Yes, you also should add that we're starting to see the reinsurance industry
become more active, as well as the green bond initiatives.
Just to give you an overlay, venture capital in the last year and a half has
come down, unfortunately.
(02:38):
It may resurge, but we have an expression in New York, they're sitting on dry powder.
They're not deploying as much capital, about half as much as they used to.
However, who's stepping into the financial void today are sovereign wealth funds,
strategic investors that are very interested in the energy transition,
and some of the highly qualified family offices who have always been first movers on sustainability.
(03:01):
But I foresee this year is actually better than last year because there's just
an impetus now for climate solutions, and that needs more fuel,
a.k.a. money, to get the job done.
Yeah, that's true. I mean, when you talked about catastrophic bond,
that's the reinsurance industry or the industry you correctly talked about.
(03:25):
Now, you've also worked on microgrid projects. Now, one of them is based in
India, Grameen Surya Bijli Foundation in Delhi, where you work.
How do you see micro grip projects changing development sector,
both in India and other countries?
You could talk about both from an advanced country's perspective or from an emerging market space.
Actually, I see microgrids, as you just mentioned, in both sectors.
(03:50):
For developing countries, it makes a lot of sense to leapfrog technology for
those people who do not have access to the electric power grid.
And that's over a billion people globally. It's not a small number.
So they can benefit from microgrids, specifically marrying solar batteries, LED lamps, etc.
(04:10):
For the more developed world, we need more resilience due to climate change,
storms, and other catastrophic events.
So the game really is twofold. Get the costs down for microgrids.
Schneider Electric has been one of the leaders in microgrids,
by the way, and they're a big French conglomerate.
(04:31):
But we need more impetus here because, in my opinion, and the reason I did work
in India with the NGO, was we wanted to help people in the community that were
not connected to the grid.
So everybody looks at central power stations, which are large-scale,
big megawatt facilities.
We're talking very small scale, which is easily sighted. It doesn't have to
(04:55):
even be near transmission lines.
It can be nearby. And we're seeing this done in the U.S., for example,
for senior citizen homes, for police stations, fire stations,
because as we're starting to see the severity of storms throughout the world increasing and fires,
flooding, rainfall.
Tremendous events that have all been predicted, but no one really wanted to listen.
(05:19):
And now we need to make the grid more resilient, but we also have to think about
distributed energy as a much more viable solution.
You're right. Like you have, you know, one of the reasons why I talked about
catastrophic bond was also the World Bank came out with the bond in the Chile.
So, you know, of course, grid could be one of the answers.
(05:41):
And now people are also taking a lot of insurance against. So this sort of particular
innovation has come, which was already there within the private industry,
but it's come within the social impact space now in terms of sustainable development.
Peter worked very extensively in the clean tech venture capital funds,
and you also have worked in hedge funds.
(06:02):
So these are sort of on, you know, portfolio construction.
So these are alternative investments wherein you have, you know,
returns which are not normal.
So when you look at startups, which are very difficult to value,
you know, specifically in the early stage, you do not have a free cash flow
model to actually, you know, it's totally on assumptions, which you will take.
So what are the key attributes which you look for startups, especially when
(06:25):
you're looking at the clean tech sector? And then I'll ask about more other sectors.
I have vetted over 2000 companies in my career in the clean tech sector. sector.
I was an entrepreneur in residence at Columbia Tech Ventures,
which is part of Columbia University.
I've been very involved with early-stage startups who, frankly,
(06:46):
lack capital but have good ideas.
What's really the missing link and what I focus on now is the management team.
Can the people that are doing the work execute and commercialize a strategy?
It is not easy to work in a startup. I've actually been involved in four startups.
I kind of know what I'm talking about.
And so you really need to think long term. The better news is we're starting
(07:10):
to see more government funding for startups as grants and forgivable loans.
But really, the community is what we're talking about.
Here in New York, we have 400 startups within the incubators and in other countries.
And similarly, there's clusters of startups, which is good because Because there's
(07:32):
a need to share knowledge and information.
For example, if you have someone who's very good in business development in
one startup, they may be helpful to someone in the other startup and the incubators.
But this is difficult because most of them are going to fail.
It's just unfortunate. It's a fact of life. Most startups are not going to make it.
And what I've also seen, because I've been a judge in the cleantech open for
(07:55):
the Northeast, that's in Boston and New York specifically, even great ideas
coming out of MIT, IT, sometimes they're lacking things like,
does the market need this solution?
Who are the competitors? I always hear there are no competitors.
There are always competitors. So it's very important to do competitive analysis.
So it's kind of like financial models are nice. They're just predictions.
(08:21):
Management's the most important to me. Can you have the right people?
And I'm working with not a startup, a company that's burned $125 million,
but they've changed their entire management team in the last two years.
So even as they grow, they still need the best people.
And like I said, do the market analysis, do the competitive analysis,
(08:43):
and make sure there's something there.
I'm a graduate of Carnegie Mellon. I went back to Carnegie Mellon to speak to
the students a few years ago on startups, and they're saying,
well, start a company in your dorm room.
I'm not so sure everybody can be Mark Zuckerberg and Facebook.
I think, frankly, you need some skill set of knowledge to actually have a more viable startup.
(09:04):
A better idea I'm starting to see is a lot of the large strategic energy companies
and original equipment manufacturers have what I I call technology scouts.
They are looking for the next best technology. They're not going to invent it themselves.
They're going to invest in that technology company and probably,
(09:26):
down the road, acquire that technology company because startups really are the
lifeblood of innovation and entrepreneurship.
They're not big bureaucratic behemoths. They're pretty small,
10, 20 people. Some are a little larger, but really people with a good idea and do execution.
And what I coach people is get a large strategic investor involved.
(09:50):
So, for example, I'm involved with a company with reversible hydrogen fuel cells.
They won Shell Game Changers. Another company, which I'm helping out a little
bit, called Voltpost, to plug in for EVs from Lightposts got very big investors
involved from the energy sector.
(10:10):
So in this case, Exelon and another utility. So you need to have,
Some guidance from the large companies, they can be very helpful because they
can give you a value proposition that's higher.
They can give you the use case that's better. Do we need this technology?
And as I said, they are scouring new technology companies all throughout the world.
(10:34):
It's not like all siloed in New York. It's everywhere.
So the point being, the startups need money, obviously, hired good people.
Sometimes those people work for sweat equity. They don't get paid anything,
which is, I think, unfair, but that's a fact of life.
And we just see a tremendous movement from startup now to accelerators.
(10:58):
So there's a lot of talk about accelerators, which are a little more advanced
stage startups, and then movement into commercialization scale.
I don't foresee everything being an initial public offering.
I see a lot of what we call trade sales, large companies buying the startups.
And just to put it on the table, energy is 73% of greenhouse gases.
(11:21):
So the energy sector is front and center, the most opportune time for decarbonization.
We're talking probably a trillion-dollar
ticket in the next 30 years to decarbonize the global economy.
And so when you look at like areas, which areas will be bullish at the present?
(11:42):
Like, you know, this is a very vast segment, clean water, sustainable agriculture.
That is where I think some of the things are happening. Sustainable agriculture,
which I keep, you know, hitting on.
Energy efficiency, of course, has been going on for a long time.
Or into sustainable infrastructure and buildings.
How do you think, how would you rank some of them?
I'm very involved in hydrogen. So pushing past EVs, hydrogen for power production, hydrogen.
(12:08):
Fuel cell vehicles. I think energy storage is seminal for solar,
wind, and all the intermittent renewable resources.
And I went to an advanced battery conference that the Department of Energy put on in New York last week.
And there's a lot of interest now from large companies to get more larger facilities for energy storage.
(12:32):
I'm talking advanced battery technology, fuel cell technology,
new kinds of batteries, not just lithium-ion, but zinc-air batteries, airflow batteries.
This is material science play, and it's even a nanotechnology science play.
So those are the areas that I'm focused on.
The more mature markets, obviously, are solar and wind. Solar costs have come
(12:55):
down, as we all know, about 95% from 15 years ago, and that's made that readily
deployable around the world. You can deploy solar energy everywhere.
Wind costs have come down about 65%. What's happening in that sector,
they're building larger turbines.
So they're re-footprinting existing turbines for larger facilities.
(13:16):
And in the US, we now have the beginning of offshore wind, which is much more advanced in Europe.
And even parts of Asia, like Taiwan, have offshore wind.
So that's a technology play using kind of oil and gas platforms to put technology on those platforms.
So those are the ones I'm focused on. I've also looked pretty heavily in nature-based solutions,
(13:39):
agroforestry, repurposing distressed land, using biotechnology to create better
value for farmers and also pay those farmers, farmers, as well as replant trees.
So that's sort of a reforestation play as well as an agroforestry play.
And lately, I've gotten more involved in sustainable fishing.
(14:01):
As we know, due to climate change, the catch of fish is declining,
particularly in northern climates like Norway, Alaska, and New Zealand.
And so there's now a school of thought to perhaps site fish farms in southern,
warmer waters. And so, I'm involved with a company doing that offshore Panama, offshore Bali.
(14:23):
Because protein is going to be very seminal going forward throughout the world
as the population continues to increase.
And I think fish are going to be a supplement to red meat in many jurisdictions.
I don't eat red meat, for example. I choose not to eat red meat.
But other people will start moving more. So, the demand for protein is going to get bigger.
(14:47):
And I think there'll be a greater opportunity. The problem I've seen on vertical
farming, however, I've seen no one have a real successful model.
And I have worked with a vertical farm in Brooklyn.
It's difficult to scale, commercialize. And yes, you can make green leafy vegetables.
You can make spicy leafy vegetables. But it's kind of a niche market.
(15:09):
And we haven't seen a model. And hundreds of millions of dollars have been deployed
in the sector with plenty, with arrow barrel farms, et cetera.
We have not found a solution for vertical farming, but sustainable agriculture
front and center is very important.
How we grow our food, can we provide food for more people?
I mentioned the need for protein. So that's also important. And then you mentioned water.
(15:34):
So my holy trinity is energy, food, and water.
They're the world's three largest businesses. Energy is a $6 trillion business.
Agriculture is a $5 trillion business. Water is a $3 trillion dollar business. So size does matter.
All of these sectors are impacted by climate change.
And we just have really good thinking going on that people say, how can I do this better?
(15:59):
Do I need a technology fix? Do I need more money to scale? So I'm actually quite
enthusiastic for this year, 2024.
I know people last year were a little hesitant in the venture capital space,
But that's starting to shift to sovereign wealth funds, which are now investing
in startups for the first time.
We're seeing a lot more activity because in the past, they've looked for what
(16:22):
we call big tickets, $50 million, $500 million.
They're starting to go downstream to smaller tickets.
Viable startups don't need a lot of money to get going.
$1 million, $2 million, $5 million, $10 million. Where I sit,
I work with more advanced companies.
We raise $25 to $100 million for these companies to scale and commercialize.
(16:44):
But the good news is there's lots of people in the sector.
The bad news is academia is a little behind this sector.
I've worked with Stanford and Oxford in the last three years.
They've just set up sustainability colleges. And so we need more programming
from academia as well as movement of technology.
(17:09):
Which is mostly engineering or applied engineering solutions.
So I think when you look at sustainability writ large, you have to look at everything.
You have to look at architecture. You have to look at engineering.
You have to look at finance. You have to look at behavior. You have to look
at communication. communication.
I mean, AI is getting a lot of play in the sector, which is good,
but it can't do everything. We still need human beings that are trained.
(17:31):
So there's a lot of emphasis now on what we call in the US workforce development
to retrain workers to work in this new sector, which I'll just call sustainability.
It really didn't have a name. So at Columbia, they call it the climate school,
and Stanford, Oxford have different names. Everybody has a a different name. It doesn't matter.
(17:54):
Point is, this is just starting to move.
The better news is the last three years, we've actually seen this sector starting
to mature for things like ESG investing, for things like carbon markets.
There's a lot of opportunity that really wasn't there before.
Thank you. You know, that was a very in-depth analysis.
(18:15):
And, you know, hearing you, there are a couple of questions that came in.
First, I just wanted maybe, you know, I'm not very familiar with the term when
you talk about vertical farming.
Are you speaking about sustainable agriculture? Yes, I'm talking about basically
indoor agriculture, inside buildings.
Using aquaponics, using the fish poop as a nutrient, using LED lamps so the
(18:40):
plants get lighting, and using advanced computer technology.
That's kind of it in a nutshell.
So it's really indoor agriculture. culture
yeah you see it in a lot of movies also
in hollywood movies or you know a lot of things which are also coming out
from europe us and europe i i we
i've seen that happen but of course it it's not
(19:00):
on a very grand scale like you really mentioned that
it would take some some sort of an idea or you
know out of the box thinking i wanted to just follow up on
a couple of things when i talked about clean energy sustainable
agriculture i was also reading the chris report a lot
of fantastic work is going on in the u.s now i mean in
the sense from there i got an idea you know you talked about
(19:21):
reforestation you talked about sustainable like
buildings that's where i started getting an idea
how they're trying to improve the efficiency of infrastructure or
buildings also and you know so many things which you
talked about so you would you say that you know action i
think europe is doing a lot of a lot good work now u.s is right on the top of
course you know china is is doing India is also doing Singapore also on the
(19:43):
you know if you look at the Asian countries in Japan you know one of the best
from the first countries in the world actually to come out with the AG matrix
I think for the pension funds a lot of work how would you are you really satisfied
with a lot of things which are happening in the US now?
Yes. Don't believe the headlines. Trump's going to do this and climate's denying.
Look, this is how it works. Most of the jobs in clean energy are in Republican,
(20:08):
what we call red states already.
They're not going to stop 300,000 solar jobs. I'm just giving an example of one sector.
We're just starting to build an offshore wind force in in the Northeast.
If you want to listen to the headlines, oh, this pension fund from Florida,
this pension fund from Texas can't invest in ESG, so what?
(20:32):
They are losing what I used to call environmental alpha.
They're not going to get the benefit of many of these companies that are going
to be extremely profitable in this sector.
Directionally, the US, under the Biden administration, with the climate bill,
(20:52):
but they also had the infrastructure bill and the CHIPS Act.
So there's a lot of government funding going out the door right now to about 2030.
I've worked as a policymaker many decades ago at the Department of Energy.
So I've worked in the private sector, and I'm more focused on private sector
monies. Now, where is that money coming from?
(21:13):
Strategic investors, energy companies, original equipment manufacturers,
people that actually understand their space and need to innovate.
Sovereign wealth funds, big ones, Norway, Abu Dhabi, Singapore.
These are huge funds, which I've talked to, and they are very active.
Family offices, very wealthy families want to give back.
(21:36):
They have made hundreds of millions or billions of dollars, very active in what
I'll call the impact investing space.
So you can hear things that things have to have a purpose, investing with a purpose.
But my game is impact investing.
This has a benefit to humankind.
(21:58):
And the game very simply is human health and welfare.
So I'll just take you back on my journey real quick. I've worked on air quality
issues my entire career,
taking the lead out of gasoline with with the Environmental Protection Agency
in the 1970s, working on the Prius in the 1990s with Toyota.
(22:19):
Always about air quality. Air quality is still a killer. Over 9 million people
last year died from air pollution.
It's a problem. It's a problem. It can be fixed.
When I was told that we couldn't take the lead out of gasoline,
we have gasoline shortages, I said, no, we're going to go do this.
And the private sector innovated because engineers solved the problems and there
(22:42):
were no gasoline shortages. So what I'm getting at, if you can,
Frame public policy with a regulatory outcome that is beneficial.
Let the private sector innovate. In other words, don't pick technology winners.
You'll be very surprised how innovation and entrepreneurship,
and even in large corporations, they call it intrapreneurship.
(23:05):
You'll see them innovate, do things differently, because it can't be the same way.
We are in the beginning of a transition to sustainability, just the beginning.
As I mentioned before, the $100 trillion that came out of my conference last
year, and now it's all over the internet, nobody's denying it's going to be
a very large number to decarbonize, to get sustainable, to start moving things.
(23:31):
So I'm actually starting to talk about the energy transformation rather than transition.
This is an industry that's going to be around.
Energy is the world's largest business. People need transportation, mobility.
People need heating and cooling. People need lighting. So it's sort of there.
It's very ever-present.
And it's how the fossil fuel industry adapts to this change is really what's going on right now.
(23:56):
So for example, there's a lot of impetus now to capture methane.
Methane emissions leaks are 22 times the carbon intensity of CO2,
carbon dioxide. It's a big problem globally.
So what they do is flare gas, pipelines leak. That's going to be solved.
The Biden administration is already working on that. There's a company called
(24:17):
Cefiro Methane, which is looking at carbon credits for this.
So people can look at some innovation in how to solve a problem,
not looking at it the same way we used to look at it. And don't forget,
we're talking about a very massive business.
Every country has an energy industry company, an electric and or gas utility, or several.
(24:40):
The U.S. has almost 45 utilities, a little different than most countries.
So there's a lot of innovation occurring. And what they're starting to talk
about the last five years is the utility of the future.
What is that going to look like? Is that going to be a utility of microgrids,
like we have some being built in Brooklyn?
Is that going to be a utility that has batteries and energy storage and solar
(25:02):
on rooftops or solar on ground?
This is a very different world we're entering.
We are going to start looking at measurement of carbon intensity in many different
manifestations. manifestations.
And the thing to really watch is scope three emissions, all the way down the
value chain, because we're now starting to see companies like Apple Computer
(25:23):
asking their suppliers in Taiwan to measure their carbon footprint.
So the first step in this journey for many corporations is to measure the carbon footprint.
That gives you a number, but that doesn't give you a solution.
You have to do the other side, which is how do you reduce that carbon footprint?
And that's where where the innovation is catching on. But many software companies
(25:47):
in the last two and a half years have been funded over $100 million,
100 million euro just on the carbon accounting.
That's an important part of this, because you have to measure,
verify, and then bring in the solutions providers.
So that's why we're just starting on this. And my own opinion is,
(26:07):
by 2030, no large corporation will be carbon neutral without buying carbon credits.
And that market has been sized by Wood Mackenzie and Edinburgh Scotland at $22
trillion, which would make it the largest commodity market ever created.
Well, that's fascinating. I mean, to hear, you know, of course,
(26:29):
there's a carbon tax in Europe.
That's a great way of, you know, actually even negative externalities because
of the carbon. So yeah, a lot of work.
And like you gave a very good reference that about 100 million euros is the
sort of amount spent by you on carbon accounting. Am I correct here? Yeah.
(26:49):
That's fascinating. It was, it's, I'm having a senior moment here, Patch.
Check out Patch Software and Silvera, both those companies. One's in the UK, one's in France.
Okay. In the US, two got funded. One's called Watershed and the other's called Persephone.
So that's four that I know of. And I've never seen so much money poured into,
(27:14):
I'll call them, you know, later stage startup, carbon accounting companies,
and they have all the bells and whistles.
They do measurement all the way to the desktop.
They're using machine learning, AI, all the tricks of the trade, but it's necessity.
Those clients have the need. Most corporations can't measure their carbon footprint.
(27:38):
So there's two markets here. One are large corporations. The other are private
equity funds, which have portfolio companies, which also need to decarbonize.
And here in New York, for example, there are 4,000 private equity funds.
There are thousands of these companies.
You correctly mentioned, you know, you want to drive in private capital and
(27:59):
then you have to have regulation.
So you need a PPP, which is the 17th system development goal and public private partnership.
That's how the world, that's how I consider that, you know, that's how the government
would enable or facilitate the creation of innovation within a lot of these areas,
which has been like you described as a market failure, because they've not been
able to sort of find a solution.
(28:21):
There's no one solution. That's the first problem. The second problem is every
part of the world is a different fuel mix. It's not uniform. It's not simple.
That's why there won't be one global carbon market. Same problem.
Emissions are different in different areas of the world.
Secondly, the coverage isn't there. So what you're describing is the compliance
market, which we have in the EU, which we have in California,
(28:43):
which we have in Quebec, other parts of the world.
But that doesn't cover the whole market. So we need a larger plan,
which we've now started to see gestate in what's called the voluntary carbon
market. It's small. It's growing.
But that will start becoming a larger market because companies,
particularly if I'm a corporation, I can't have reputational risk buying bad carbon credits.
(29:08):
They have to be very well ratified, verified, and validated.
I'll give you an example, and most people don't know this. Amazon worked with
Vera, which is the voluntary carbon registry, for a new standard which came
out in December called Abacus.
Abacus is the highest standard of carbon credit for nature-based solutions.
(29:31):
So, even corporations want that rigor for buying credits because they can't
have a bad reputation, become a bad actor.
So, you're going to see a movement more towards standardization at higher standards
for the voluntary market, and that's going to be a very big market.
Hmm that's true actually before i come to the next question which is on tax tax and money i,
(29:56):
wanted to also follow up on other things so you talked about a lot
of innovation which is happening within batteries right now i think
one of the most innovative companies in ev sector is tesla i
mean it defined the whole sector then there is another company which is in china
which is coming up is byd and byd is actually known to have more efficient batteries
am i correct here do you think that could have been an anchor point for some
of the innovation that people are looking is to have better batteries because
(30:19):
it's going to make EV market much more sustainable, more cheaper, maybe more affordable.
Exactly. And if you look at EV sales last year, they were 18% globally.
So we're now starting to see the hockey stick in EV and we need better batteries.
One of the companies I work with, they use a nano coating to reduce the heat
(30:40):
of lithium ion batteries.
Everybody knows lithium ion battery is hot. You feel your cell phone,
you feel your your laptop. It is hot.
And so that's a problem. So we need better material science and better battery manufacturers.
I don't care where the batteries come from, if they're better.
Tesla was the first mover. You have to understand, they were the first mover.
(31:00):
The world is going beyond Tesla. There's going to be many different opportunities
in a battery space, but also in the mobility, transportation space.
Like I said, I'm very involved with fuel cell. But fuel cell vehicles are a
very small part of the global markets.
It's basically internal combustion engines moving to EVs, which are growing
(31:23):
rapidly, very rapidly, and then a very small segment for hydrogen.
Now, why I like hydrogen so much, because I've driven hydrogen fuel cell cars,
and I've looked at the tailpipe, and it makes water vapor.
So hydrogen Hydrogen is the most abundant element in the universe,
and the emission is water vapor.
(31:44):
I don't know how many years we are away. I've been involved with something called
the Hydrogen Council, which is now about 200 corporates in Brussels.
So we're starting to see very large companies get very involved in hydrogen.
Doing things like switching out methane, CH4, and using hydrogen in equipment.
So they're testing it. Green hydrogen, that's what you're saying, right? Yeah. Yeah.
(32:07):
About, I mean, a couple of, there's a lot of use of that in electrical trains and high-speed trains.
It's been used in Europe. It's being used also in China.
I think India took a couple of trains, also using green hydrogen for,
you know, so I think that's one of the areas where there's going to be a lot of, that's very true.
And this could be within the parlance of mobility within the railway sector
(32:32):
also. Yeah, they've also used it in shipping.
Norway and Japan have had hydrogen ships, but this is small.
The point is we need a global fleet of tankers is not running on hydrogen.
So the point is, it's here.
Can we accelerate that? So my mission, and I've been in this sector since Earth
(32:52):
Day 1970, my mission is to accelerate and commercialize solutions.
And people used to laugh at me when I used to tell them I wanted to make the
world a better place. But I've been to 50 countries. I've been all over the world.
We can lift all the boats. Why should people suffer health risks using energy?
It should be cleaner. And it can be because all of a sudden,
(33:15):
we call it bending the cost curve.
All of a sudden, something that was very expensive becomes very affordable.
And we've done that already with solar. And we've done that with wind.
We're going to do that across the board. You're going to see this with batteries as well.
I think of Germany and France are doing a lot within the green energy space, in the green hydrogen.
That's what I had read about. Maybe I'm not. Running trains.
(33:36):
They're running trains. Yeah.
Next question is, you know, thanks a lot. I mean, that was a very detailed discussion
on one particular topic.
And I think we had a very deep dive on this. That was an excellent discussion.
My next question, of course, is on tax monies. You know, Singapore recently
launched tax money for sustainable finance.
Now, how do you think that we change the sustainable finance globally?
(33:57):
I believe a lot of people are doing. Tax monies are very important.
WHO has done a lot of work within this space as well for different things.
And EU, of course, has been taking a lead over much in green space.
Now, what would your thoughts be on that?
I don't quite understand. You talk about taxonomies for sustainable finance.
We don't have that yet. That's the problem. We have no standardization.
(34:20):
This is what's lacking in the ESG sector. We have a lot of different companies
reporting on ESG, but what are they actually measuring?
So I spoke at the CFA Society almost four years ago now about working together
to create common standards.
Now, I know that sounds very simple, but companies are making a lot of money
(34:42):
selling their data. So they have not done this.
So it's a real problem because what are you measuring? What are you reporting?
What are the accounting standards?
We don't have uniformity. And I don't know when we're going to have it,
but we need that. It would be very helpful for the sustainable finance sector to benchmark that.
But like I said, that hasn't happened yet.
(35:03):
Singapore has launched. I think some work is going on in the Asian sector also.
I don't think so they have launched
it, but there's some sort of framework being put in for in that space.
So yeah, that's true that we need a taxonomy and people actually,
and we are actually moving towards that.
I think that's going to standardize a lot of things in ESG that will make it
(35:23):
much more simple, that make it much more easier for accounting purposes.
Now, when you look at clean tech, and you spoke a lot about clean tech,
that's a sector which is more within the business and development sectors.
See, clean tech impact for the less or the underprivileged section of the society.
Where do you think that could be? Well, I think the analog I'll give you is cell phones.
(35:44):
So when I was in India in 1970, 1996, people were buying cell phones.
And I couldn't figure this out. And I was asking people, why are they buying
cell phones when they're not connected yet?
The point being, you can go from not using landlines to cell phones.
I mentioned before, you can go to the microgrid and bypass the central power
(36:06):
station, which is extremely expensive.
I think there are opportunities in what people are now starting to call the
South, the emerging South,
to use better technologies that may be developed in the North,
but can be deployed where there's a mass of humanity and go faster.
(36:27):
So, we can see the innovation, the initiatives, but as I said,
my own attitude is the technology can come from anywhere.
It is not siloed in the US or China or Singapore or Japan.
It's everywhere. everywhere people are looking at this question
(36:49):
how do i fix it how do i
make the world a better place through reducing carbon how
do i make energy more affordable for more people how do
i make water more affordable how do i make education more affordable one of
the things i was working on in kenya was to basically go from fixed landline
cell towers and bring it to mobile and these gentlemen are still working on
(37:12):
that they start bringing it into kenya can roll it all across across sub-Saharan Africa.
The point is being there's no obstacle to that.
Capital is an obstacle, I guess you could call it that, but the innovation is
there. The need is great.
If you travel like I have traveled, I have traveled to developing countries
as well as developed countries.
(37:34):
Many Americans don't see that. They don't know. They're unaware. aware.
If you're aware and more people are traveling globally, you have more opportunity
in my opinion to transport ideas and better information and more knowledge.
Unfortunately, there's no clearinghouse for all of this. There just isn't.
But there are some side pockets of intellectual capital, like some platforms
(38:00):
are starting to... I'm not saying they're a library, but they're starting to get more uniform.
Actually, I did ask about EVs, but, you know, there was a follow-up question.
And I think I'll sort of anyway ask about that.
You also mentioned that you worked with Toyota Prius development team on power issues.
(38:20):
That was in the mid-90s. The electric vehicle segment has, like, drastically changed.
Of course, Tesla, I talked about, then VYD, but then GM, Volkswagen,
Toyota, Stalantis. And they are all, you know, we have upstarts like Rivian,
Lucid Motors, Polestar, Zengpen Motors.
I don't know how to pronounce Peng or Zengpen Motors. Also doing some fantastic work.
(38:43):
Now, why I'm trying to ask this question is not about only innovation and batteries.
For example, battery swapping is something which I think the first idea came
to Israel. There was a company known as Betterwork.
Very bad idea. Very bad idea. But then maybe because the country was much smaller.
No, it's a dumb idea, battery swapping.
The better idea is building infrastructure for recharging.
(39:06):
So what's going on there? I mentioned Voltpost.
Voltpost is a small company here in New York that you can plug into your EV into the lamppost.
Another one's called Hevo Power. Hevo is wireless recharging of EVs.
So we're starting to look at a need for better infrastructure for EV charging.
(39:27):
But then there were certain roadblocks, at least in the U.S.,
and there was a report that people are not able to, that you need to put a full interception in space.
Do you think that maybe something like, which is like more of a hybrid,
could also be a good idea at this point in time?
No, not anymore. I think the market's passed them by. I think Toyota's starting
to get on the EV bandwagon now.
(39:49):
But it's really an infrastructure issue. We don't have enough recharging centers.
That's what we need. Some of the ideas were to put the recharging centers next
to the railroad stations so people could drive their cars there.
We need more infrastructure. That's the biggest hurdle.
And the point is, there's also what level.
So I rented a Tesla, and I drove 100 miles from here to a hotel,
(40:13):
and I put my battery, put my recharger into the car, and it took eight hours to recharge.
And a friend of mine said, well, you know, Peter, it gets cold.
That's going to discharge the battery. And it did.
That was called level one batteries of recharging. Very slow. Too slow.
So we also need fast charging. So we started to look at level two, level three.
(40:36):
It's you know it's like here's the first generation
okay we got started now we're
like two generations above that and so
we have to have better technology fast charging
basically more easily deployable not
too expensive etc so it's this is the numbers i'm looking at for evs are astronomical
(40:59):
and then the source i'm looking at is bloomberg nor energy finance you could
go download from them they put out a report usually in february do all the different
cleantech sectors it's free and the point is we don't have we don't have enough.
Infrastructure for recharging yet that's so chicken in the egg maybe i want
to go electric but where do i recharge and you can actually do the search on your iphone.
(41:24):
And I think we, of course, demand is not exponential. That's true.
It's changing around globally.
There's a company from WinFast that's sort of made a headway.
It's coming to the, it's already there in the US.
You're absolutely correct. Sort of take an analogy, like when we had,
you know, earlier mobile phones that took a lot of time, just a five to 10 minutes
charge could last you for, you know, a couple of hours or more.
(41:45):
So I think that's how the battery would also change when you are speaking of EV.
It's going to go up and much better and much better over a period of time.
Maybe a shorter period of time you'll have much more focus on
that because now there's a demand there is a sort of a market for
ev i talked about this experience you have eight years as an
ex you worked as an external advisory board member at erb institute for global
(42:07):
sustainable finance at ross school it's a fascinating school ross i did two
electives there it's a very good school at university of michigan and our book
how was the experience you know you you sort of have won a lot of hats in your
life and this was more of an academic things you have done a lot you You spoke,
you were doing work at Columbia.
You went to Carnegie Mellon at Pittsburgh, a fantastic city.
(42:30):
What was your experience and your takeaways from your work at University of Michigan and Arbor?
Well, the University of Michigan's program was unique at the time.
I'm not sure today, but it was basically an MBA in the Ross School of Business
and a finance degree and an MA in the School of Natural Resource.
(42:51):
It was a double degree, very rigorous.
And we downsized the program to 30 people a year.
So it's a very small program, maybe 500 graduates total in the last 25 years.
However, the reason I was attracted, the students invited, I gave a talk there
and they said, why can't you be on our advisory board?
I was also on the advisory board of Bard College, MBA in sustainability.
(43:13):
At Columbia, I was a professor teaching renewable energy project finance to
second year grad students.
So my thesis is very simple. Thank you.
We can't make transformative change without young people.
And I committed myself to this almost 25 years ago.
I've mentored over 300 young people, specifically on their career development.
(43:35):
I've opened doors for them. They get jobs.
Tomorrow, I'm meeting eight young people every hour on the hour at the Cornell
Club here in New York City.
I just firmly believe that it's important to mentor young people in this sector,
as as I've mentioned, doesn't have a lot of academic rigor yet.
And we'll call it sustainable finance, for lack of a better term.
(43:58):
My mom was a college professor.
So my role model is a little different than most people. So I've worked in policy.
I've worked in academia. I've worked in technology. And I've worked in finance.
Yeah, I wear a lot of hats.
And they all are interrelated. So they're not simple. But I'll give you my joke now.
So I told the people at the University of In Michigan, I had a call option on
(44:22):
young people. Then they always laughed at me because that meant in the money.
I'm very committed to the next generation or generations because it's very important.
This is the world they're inheriting. This is the world they can make great changes.
And one of the things also I want to follow up is like you talked about the dual degree.
(44:43):
So they had a dual degree also with public policy. I think it runs for three
years where you get an MBA degree and an MPA or MPP degree.
I'm not exactly sure how that works out, MP or it's MPP.
Now i know because a couple two three people from my
badge or bad senior were actually involved in you
know a dual degree and if the right time
(45:04):
is of course when you're pretty you're much younger it's much easier to bend
your mind or you know to sort of change your views because it becomes much more
difficult as you outgrow or as you grow with age i mean change is of course
constant but change might not be that significant as you age over a period of
time and that's good you you You know,
I have a lot of interest in mentoring students.
(45:25):
Now I come to another very important question. You have been,
you know, at the forefront of Wall Street Green Summit on Sustainable Finance.
It's one of the largest of its kind.
What prompted you to start this event? Because when you started,
it wasn't like green was a major, major name at that point in time.
(45:45):
You're much ahead of the curve, you'd say.
I was 25 years ahead of the curve easily. easily people
on wall street thought i was different two people
at one of the exchanges thought i had two heads because i was talking about renewable
energy 25 years ago and a
woman came to me says i want to do a conference on negawatts and i said no no
no nobody cares about negawatts you know this is amory lovins not not using
(46:10):
energy energy efficiency and i said no we're going to do a conference on negawatts
energy efficiency carbon and renewables and then we We got started and at different venues,
McGraw Hill Conference Center, Bloomberg, Reuters, New York Times Center.
And I've had 9000 people come to the event over 20 years.
We'll have 200 people at the Canadian Consulate next month. Well, March.
(46:34):
I do it once a year.
Deliberately. It's my brand. People know it.
And in New York, from what was like, I just want to make money,
they have an expression in Wall Street called the edge.
I just want the edge. Everybody has the edge. Well, now it's the environmental edge.
Now it's a way to make money doing the right thing.
(46:56):
Those are the terms I invented, green trading, green finance,
almost 25 years ago, deliberately, because I want the outcome.
That's what I'm concerned about, the outcome.
How do you make the world a better place? You can't just say that.
You got to do the work. And I've done the work.
That's the difference. You just can't write a paper about it. You got to go do it.
So I've just decided. The nicest thing that's happened to me is one of my students
(47:22):
from my class at Columbia is now the CEO and founder of that wireless recharging company.
Another of my students thanked me almost 20 years ago to get her started on
environmental finances. She's on the board of directors of Vera.
One of them's at the World Bank running
a clean fund. Another one's at ESG manager at a big fund in New York.
(47:44):
So I'm kind of pleased that I've had the opportunity to mentor the young people
en masse, many more than you realize.
But the reason is we have to make the transformation together.
We have to build the community. It's a global community.
It's not going to COP. I don't go to COP. It's not 70,000 people doing press
(48:07):
release. I'm talking about the hard work.
My dad had an expression. It's called heavy lifting.
This is the heaviest lift we've ever seen, climate change. This is hard.
Believe me, if it was easy, everybody would do it, but some of us want to do
it. And look, I tried to message during COVID that there's a correlation of
(48:28):
infectious disease and climate change.
Nobody wanted to hear that. And I worked with Harvard Medical School,
Swiss Re, at Columbia University on that almost 23 years ago.
So there's things you don't even think about.
Oh, a virus couldn't be impacted by climate.
Of course it can. Insect-borne, water-borne, but nobody wanted to hear that story.
(48:51):
So I've done a lot of things people don't want to hear about but I just have
one trait I'm extremely stubborn,
and my wife has an expression don't quit before the miracle so I just don't
quit I don't quit, I'm still here I'm still standing,
and from, people come up to me you know, my wife works for Apple Computer and
(49:15):
we're doing green stuff, you stick out like a sore thumb on Wall Street,
not anymore not anymore more.
They had to change. They couldn't see the change because they had to make money
doing the change. That's okay.
But that made the change. This is huge. This is the biggest business opportunity we've ever seen.
(49:35):
Talking about decarbonization, I'm talking about carbon markets.
I'm talking about innovative, clean technology.
I'm talking about transitioning energy, food, and water. This is huge.
It's never happened before.
The good news is the whole world can do this.
Look, I was eating organic food in Pittsburgh in 1970 at a food co-op.
(49:56):
How many years ago was that?
People, you're a student, you're eating organic food. Well, now it's very mainstream.
What I've learned is change takes time.
Sometimes too long. Yeah, that's true. I actually went to a vegan restaurant
in Seattle, and I think it was a buffet, and it was one of the best food I ever had.
(50:16):
Things are changing so much. Although I eat non-vegetarian food,
white meat, chicken or fish, very rarely red meat.
But to come to the last question, I think we had a very detailed discussion,
very informative, and it was a very classic discussion. I think there's so many points covered.
It will be such an interesting discussion for anybody who wants to know what
are the latest technology, what is happening in the green finance space.
(50:39):
So I really want to thank you for that.
So the last and of course the final question is always the aha question.
Whatever experience you want to share, you could share one experience or many
experiences here that, you know, brings happy thoughts?
Well, the experience very simply is building community.
That's what I'm up to. So I'll just give you an example.
(50:59):
Some friends from the hedge fund community came to me and says,
well, how about if we do a virtual cap intro event with your conference now?
We haven't announced this yet. We're going to announce it soon.
I said, OK, because you've got to marry investors to technology people.
So my game, very simply, is there was no community.
So how do you build the community? The good news is there is an amazing,
(51:22):
sustainable community now.
I mean, I remember something called the Carbonauts.
There are climate tech cocktails. There are people looking at sustainable fashion.
What's happened is this thing has exploded in every direction and every manifestation
of every discipline of every business in the world. It's there.
(51:44):
That's what's changed. And it's taken 50 years. Don't forget,
it's Earth Day, April 22nd, 1970, in Pittsburgh with my Solar Power t-shirt.
That's 54 years ago.
I think we are in the most best of times, to quote Dickens, because now's the
(52:05):
time for innovation and creativity.
And it's coming from all age groups, but I bank on the young people.
So the young people are the army, and the older people are the commanders.
It's fine. We've never had this opportunity.
(52:26):
And by the way, it never had any of these names. It wasn't called Green.
It wasn't called Sustainability. It wasn't called anything.
Anything. It had no name. That's true. That's true.
Even I, when I see young people, I feel the same thing, you know,
that I should mentor them or, you know, the other sort of energy,
which is going to take forward.
(52:47):
Like you said, you know, the older kinds, they are more of commanders or,
you know, how they're going to be different. Give me an example.
Tomorrow, I'm meeting with somebody from the Maldives. I'm meeting with somebody from Australia.
I'm meeting with somebody from two people from India.
That's a typical day in my life. Of course, I live in New York City with 200 nationalities.
(53:09):
Everybody's here, but that's the world I live in.
They're all different cultures, all different peoples, but they're all interested
in the same thing. The greatest city in the world, New York.
I mean, that's a city to be.
A city which is of different level, fantastic experience.
Living in that city and, you know, living, being in that place itself is so
(53:29):
phenomenal that nowadays New York has also become one of the startup hubs.
Like you said, I think you mentioned that there are thousands,
4,000 maybe in Chukot, Harmony, but it's just become another Silicon Valley
sort of. It's become a climate tech city.
That's what's happened here. It's just started to get branded as that.
But a lot of people you don't know have done a lot of hard work to make this happen.
(53:53):
Thanks a lot. You could add if I missed out something, but I think we had a
very, very detailed, very informative discussion.
I really want to thank you. You took time. We have such a busy schedule,
but I'm glad we had this conversation.
If you want to add any message or you want to talk about anything which I could
have missed out, you're welcome to do so. No, but thank you very much for inviting
(54:15):
me. This is the time for sustainability.
That's the key. That's the punchline.
Okay. Thanks a lot. Thank you very much. Keep in touch. Bye-bye.
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