The Entrepreneurs for Impact Podcast: Transcripts

#150:

ESG Investing Insights Based on Investors with $60 Trillion in Assets — Steven Rothstein, Managing Director of the Ceres Accelerator for Sustainable Capital Markets

PODCAST INTRODUCTION

Chris Wedding:

My guest today is Steven Rothstein, the founding Managing Director of the Ceres Accelerator for Sustainable Capital Markets. Previously, Steven ran the world-renowned Perkins School for the Blind, as well as Environmental Futures, Citizen Schools, and the John F. Kennedy Library Foundation.

In this episode, we talked about the lack of substance behind state-level anti-ESG investing headlines, where ESG is environment, social, governance investing. We talked about the overwhelming majority of people who believe businesses can in fact achieve a public good and generate market rate, financial returns. We cover the Ceres Freedom to Invest program, which aims to make this approach, I suppose, more of a red, white, and blue issue, not just a green issue. Great rebrand, I'd say there. We covered how the TCFD frames risk and opportunity creation for investors in a low carbon future and for those new to the party, TCFD is the Task Force for Climate-Related Financial Disclosures.

We've also talked about why 92% of the Fortune 500 companies now conduct some sort of sustainability reporting. We covered the SEC and California State greenhouse gas disclosure rulemaking and what it means for eight or maybe 10,000 companies, sometimes private, sometimes public, more in California, both private and public, more SEC would be just public.

We discussed the insurance industry's $40 billion of losses collectively last year and what that might mean for the future of that industry in a world where major weather events, I believe defined as over a billion dollars of damage or more, occur every two weeks today versus every four months back in 1980. He also delivered this excellent and depressing I suppose, jarring quote, which is the opposite of Occam's razor, which says from H.L. Mencken, M-E-N-C-K-E-N, “For every complex problem, there is a solution that is simple, neat, and wrong.” Yeah. Did you like that long pause there for effect?

02:51

Finally, we covered how the banking industry may be facing more risk today from climate-related risk exposure than it faced in the subprime crisis of years past. Anyway, lots more, super data-packed topic and we also gave Steven tens of thousands of new accountability partners to ensure his jogging habit occurs every day during non-winter days. No pressure, Steve, we all have your back.

Anyway, hope you enjoy it. Please give Steven and Ceres a shout out on LinkedIn, Slack or Twitter by sharing this podcast with your people.

All right, now time for your P.S. If you are looking to join lots of other climate and impact founders and investors who don't want to spend many minutes entertaining a data field newsletter each week, I’ve got you covered here through Entrepreneurs for Impact. Maybe two minutes most weeks of a read, I cover two topics in climate tech startups and investors and two topics in, let's say, productivity, leadership, a little sprinkling of Tibetan or Zen Buddhism perhaps, and we're done. If that's your jam, you can sign up at our website entrepreneursforimpact.com or through Substack as well.

All right, y'all. Hope you enjoy. Peace.

PODCAST INTERVIEW

Chris Wedding:

Steve Rothstein, Managing Director for the Ceres Accelerator for Sustainable Capital Markets, welcome to the podcast.

Steven Rothstein:

Thanks so much. I appreciate it.

00:15

Chris Wedding:

So, listeners will have likely already read this fun background, which has you leading groups as diverse as the world-renowned Perkins School for the Blind, Environment of Futures, Citizen School, John F.K. Library Foundation, and now here at Ceres. Great perspectives to bring to change at scale, I think we can safely say. I wonder if we can start with the silliness and lack of foundation for many of the negative anti-ESG headlines we've seen in the last 12 months or so. How about that?

Steven Rothstein:

Sure. And again, thank you for the connotation to be with you and your listeners. It is craziness what we're hearing. I mean, fundamentally, Ceres believes in a free market, but you need good information to have that. What some folks on the other side are saying is, they don't want an investor or a bank or an insurance company to get good information.

Now, I don't know about you, but would I want the person who’s managing my 401(k) not to have good information, or the doctor to wear a blindfold, or the fill in the blank not to say good information? The two ironic things about this is, first and I'm nonpartisan in this job, it's a political party that has said they're quote, the free market party, are the party that is interfering with the market with this anti-ESG, with saying that state should restrict. I mean, just imagine that the state of Texas, for example, passed a bill and I'm oversimplifying the language that says, “If you're an insurer and if you have a climate policy, you cannot do business with the state of Texas.”

Now, the idea of insurance is to think about risks and I want my insurance company and my bank and my investor to think about all these risks and all these opportunities. So, we've done extensive polling on this and found that while people don't understand the acronym ESG, 75% of the people don't, if you look at the underlying issue, do you think companies can be profitable and care about their workers? Profitable and think about the nature? Profitable and think about the environment? Overwhelming support, like over 90% support. So, while ESG has a quote, brand problem, the acronym has a brand problem, the underlying values, there is broad consistency and desire from investors, from employees, from customers and others.

03:01

Chris Wedding:

And what do you say, I think this is related themes here, when some of the pushback on ESG says, “Look, I don't want asset managers putting someone else's values ahead of my value. I don't want them to not be a fiduciary, putting investors' interests first,”? What do you think about all that, jazz, Steven?

Steven Rothstein:

So, first is, I am in violent agreement that an investor has to think about fiduciary duty. The average person who's working in the United States today is going to retire in 23 years. Does anyone of your listeners think the world's not going to be different in 23 years or in 23 months even? Just to give a context, in the 1980s, we had a storm, a billion dollar or more considered major from Noah storm every four months, 1980s, every four months. In 2010s, it was one every three weeks. This year, it's one every two weeks.

So, the issue is climate risks are growing enormously and the opportunities are growing for the IRA and things like that, that whoever's going to manage the money and particularly, you're not thinking just for the next quarter, but the next quarter century, you have to think about, what are those risks and opportunities? We're not suggesting someone puts their own values in instead of fiduciary duty. We actually think as part of core to fiduciary duty is thinking about these risks and opportunities and there are again, the opportunities too, as well as the risks.

If somebody said, “I don't believe in vaccine so you shouldn't think about health issues. I don't believe in inflation, don't factor that in,” you'd say, “No, that doesn't make any sense. These are all risks and you have to think about them.” You can have your own view of various issues, but these are all core to fiduciary duty.

Chris Wedding:

The way I reframe it is like what you just said, which is, it's the opposite. It's like, “No, if you don't consider these things, you are shirking your fiduciary duty.” An asset manager may not agree to every single sustainable KPI or whatnot is financially material to that particular business, but more often than not, there are non-financial, quote unquote, KPI that are financially material, but are so far not being considered in a systematic or regulatory way. All investors can look at that data if they choose to consider it material to that investment decision.

Steven Rothstein:

Absolutely and we actually developed a program that we call Freedom to Invest. Because if you asked people, “Do you think if you're a company, you're an entrepreneur, you're an investor, you should be free to consider the big risks and the big opportunities?” Again, over 90% say yes. So, if any of your listeners want more information, if they go to freedomtoinvest.org, there's a lot more information on this. Part of it is exactly what you've just said, is how can you be doing a good job if you don't think about these?

I'll give you another example. Within the last year and a half, a thousand companies, according to a study that Yale did, either left or reduced their operations in Russia because of the Ukraine war. A thousand companies, big, big names, most are Fortune 500 and when they did that, most of them had a press release that said, they're going to lose money because they're leaving people or a plant or equipment or something. So, it was not in their short-term financial interest, but they did it really for ESG. They did it either for morality, they did it for public relations, they did it for long-term perspective, being on the right side of history.

So, does somebody say, “No, you shouldn't think about that,” and if a company was in Russia, they should continue to be there? These are all factors that people need to think about and then make their own judgments. We're not saying that's the right answer for everybody and as you said, if you're a food company, then water risk might be a much bigger issue than if you're in another company that it might be a biodiversity or carbon or other things.

Chris Wedding:

It's also noteworthy that you describe ESG as having a marketing problem, a marketing challenge and then in contrast, your Freedom to Invest program, boy, what a different context, right? It's like, “No, don't you tell me I can't choose how to invest. I'm going to choose to invest however I want to invest.” A pretty different framing and I'm pretty sure that was not an accident.

Steven Rothstein:

Exactly. Again, if your listeners go to freedomtoinvest.org, they'll see the colors are red, white, and blue. It's not green because we actually believe this is very patriotic and that we're helping to build the economy. What our country needs are strong companies and investors that believe in that and what do investors want? They want good information.

08:17

We can talk about the SEC and other things in a little bit, but investors have been saying they want that. We represent investors at about $50 trillion of assets under management and the one thing that they're consistent about is they want better information.

Chris Wedding:

By the way, I love that number, 50 trillion of AUM, which you all help represent in the market. Before we go to the SEC and the GHG disclosure rulemaking process, you've framed the investment logic around ESG as risk versus opportunities. Many listeners who are entrepreneurs or investors mostly will get that. Maybe connecting that to another fun acronym in our space, TCFD, the Task Force for Climate-Related Financial Disclosures, which just rolls off the tongue, their framing of risk, acute and chronic, and then the transition risks versus the opportunities, how do you increase market share, increase revenue, et cetera, is a good business framing for how this all can lead to better financial outcomes.

Steven Rothstein:

Absolutely. I mean, just look at the arc of history for a second. 25 years ago, there were very, very few major companies that disclosed their climate impact and had a sustainability report. Today, it's overwhelming. 92% of the Fortune 500 disclose some portion of that, about half of the Russell 1000, the largest, disclose at least some of their greenhouse gas emissions. These are companies that are not regulated to do it. Why do they do it? They do it because it's good for business. They know it is their fiduciary duty. They know it's going to affect them.

One of the things we've all learned in the last few years with the pandemic is that supply chain is so interwoven that we had delays from diapers to computer chips. And so, maybe your company is going to be affected by a flood or a fire or a transition in an industry, or it could be someone you buy.

In the news recently is the automobile strike. Well, one of the issues is going, is there wages, but another one is going to EVs. Well, if you're a spark plug company or a fan belt company, in 10 years from now, will you be selling as many spark plugs or fan belts? You won't. So, that's a transition risk. It's also an opportunity if you plan ahead because maybe you get into the charging business or you're selling batteries or something else. There's both the physical risk, fires, floods, tornadoes, et cetera and then there's the transition risk as part of that.

TCFD does a great job. They become the worldwide standard. Over 3,000, maybe it's almost 4,000 companies now use it. We just did an analysis a few months ago where the insurance company -- So, insurance as you know is regulated at the state level and the insurance regulators require the largest 80% of the insurers to complete TCFD reports, climate reports. We did a machine learning analysis of those and found a lot of interesting information. I’m happy to share that. So TCFD is a great example.

Again, if you think about the arc of history, we're going from essentially no disclosures to a massive amount of voluntary, but they're using different language. It is a climate tower babble where they're talking past each other using different acronyms, to a regulatory system where there are more and more countries now that are requiring that. The State of California just passed bills that require climate disclosure. The SEC is working on it and others. So, we fundamentally believe the market works better when there's good information.

12:18

Chris Wedding:

Well, so we have these two topics, both insurance and pending require disclosure of greenhouse gas footprints, let's say. Let's pick the latter for now. We'll come back to insurance. I think many listeners will know that the SEC has proposed GHG disclosure for publicly listed companies. Lots of pushback around that, delays in rulemaking because of that pushback. For many of the investors or startups who listen, they see big ways to win in providing solutions to things like carbon accounting via enterprise software. What can you say around the status or probabilities or whatnot? It's probably super impossible, but what could come out of the original proposed SEC rule?

Steven Rothstein:

Let me first, before I talk about the SEC, mention California. So, California legislature recently passed two bills that will require TCFD and greenhouse gas protocols. It's not just for companies, it's for the largest companies. It's not just for those that are headquartered in California, but those that do business. So, if you're doing a certain amount of business for one bill and you have revenue of a billion dollars or more, another one is half a billion or more, so it's just the largest companies, it's going to require, and it's both public and private companies. The SEC is only the public companies.

First is California, it'll take a little bit of time to implement and write up the rules and everything, but that sends a very clear signal. In terms of the SEC, first is, you said there's been a lot of pushback, well, there has, but it's important that everyone be clear, there is overwhelming support. In the 90 years that the SEC has been around, this is the topic that they've received more comments on than anything else, than anything else.

We had our first meeting with the SEC 20 years ago, with investors. In 2003 and in 2010, they issued their climate disclosure guideline and more work has been happening since then. So, of the comments, 80% of the comments were supportive of this, 80%. Then we did an analysis of the investors that wrote. Investors collectively had about $50 trillion of assets under management who submitted comments and of those investors, and this is all on our website, there's information, Ceres, which is C-E-R-E-S.org/sec, there's a copy of all this information, 95% of investors are overwhelmingly supportive of using TCFT of scope one, scope two, but close to that of scope three, including the financial statements. There is broad, broad, broad support.

Of the businesses, there is a wide range. There are some businesses that if you said, do you want the government to regulate, fill in the blank, whatever that blank was, they would oppose it. Do you want them to regulate anything, whether it be food, agricultural, building standards, et cetera and I respect that’s some businesses, some loved the proposal and some liked it, but wanted changes. We submitted a letter to the SEC with four other business groups that collectively our groups represent 22% of the Fortune 500. There was broad support for the broad concept, not every single detail, but for the broad concept. So, it's important to highlight that there is broad support for this. There's also strong pushback. I don't want to underestimate that, but it's important that investors overwhelmingly, the public employees.

16:12

Employees, they've done surveys where employees have said that if they could find an exact same job in a company more sustainable, 41% of the people would move tomorrow. So, it's important for employees, it's important for investors, it's important for the supply chain, directors and other things.

Chris Wedding:

Let's see. You talked about scope one, scope two, and then maybe scope three for GHG emissions. I think some listeners will appreciate scope three, more supply chain, harder to measure and likely the majority of a corporate's GHG impacts. Any sense for whether scope three makes it through the process, if you will? Again, hard to measure someone else's scope one, two can be your scope three kind of thing. Where are the boundaries? What say you on scope three here, Steve?

Steven Rothstein:

So, scope three, the indirect, the supply chain, so to speak, first is, it's important to say it's in the California bills and there will be 10,000 companies just as context. So as context, there'll be 10,000 companies covered roughly in California, the SEC is probably seven or 8,000. I mean, there's a lot of overlap, but not all of those. So, Scope 3 will be covered and again, two thirds of the California companies are private companies so it's there.

We've advocated strongly for scope 3, but it is probably the most controversial area. Will it make the final rule? I don't know. I hope it does, but we also can't let perfect get in the way of the good. That I'd much rather have a rule that has 60 or 70 or 80% of what we want and not get everything, but we hope it does, but I'm just not sure.

Chris Wedding:

I'm with you. This is just super helpful data-driven updates here, Steve. Okay, let's go back to insurance. I recall back in grad school working on climate change 20 years ago, and reading about reinsurers like Swiss Re, let's say, supportive of the business logic of doing something about climate change. Clearly, the reinsurers got it back then, the insurers got it back then. I think for lots, and this is changing, insurance is boring or business as usual, or outdated is the wrong phrase, not innovative, quote unquote, sector. That's not all true. I'm setting you up here, Steve, but maybe explain why insurance is so relevant to the work you're doing to help reshape capital markets.

Steven Rothstein:

Yeah, so it is critical, I mean, a number of reasons. First, everybody needs insurance and so if you can't get insurance -- If you're going to buy a house and you can't get insurance, that has a big impact.

Chris Wedding:

It’s pretty important.

Steven Rothstein:

Let’s state the obvious here, if you are trying to expand your business -- EVs are harder to insure because of all the sensors they have in the cars so it has a big impact. It affects whether you're talking about your home, your office, your transportation, your business. It has enormous impacts. Number two, there are dozens of insurers that have pulled back in the last 12 months, particularly in the coast, in Florida, Louisiana, Texas, California, but not just there, in other places as well because the insurance industry last year lost. If you take all the revenue, all the profits and the premiums, they lost. I think the number is $40 billion last year. In other words, their costs were greater than their -- An industry can only do that for so long, so they are pulling back.

20:21

Well, if parts of our country are literally uninsurable or they are so expensive, that has enormous impact on the demographics, on where people live. Every issue that society faces, low- and moderate-income families are going to be at the short end of the stick so they're going to be most hurt. For someone who's wealthy, they can pay extra for their insurance, they’re not going to worry about their third home if it gets flooded, but for somebody who is barely making it – A third of the people in the United States, a third of the people, if they had a $400 emergency, they can't afford it. So, if my car flooded, I can afford to fix it. For some other people, if it floods, they can't afford to fix it. Well, if your car's not working, you can't get to work. You can't get your kids to school. You can't get to the hospital. That has an enormous ripple effect. So, it has an enormous impact on people's lives, everybody, particularly low- and moderate-income families.

Then the insurance industry is a cautious industry, I think it's fair to say, and they've been too slow on this. There are some great leaders. Particularly in Europe, there are some insurers and reinsurance that have been addressing this for a while, but in the last year, we've done three reports. One about the TCFD reports, one about their investment cycle, because while the insurers, we all think of them as they’re offering products, but they also have to have money. For your life insurance, they have to pay out in 20 years or 40 years or whatever, so they have a multi-trillion-dollar balance sheet if you took all the insurers together.

We did an analysis and showed that the insurers have over half a trillion dollars invested in fossil fuel and risks in enterprises and of those, 16 insurers have half of that. While we don't think divestment is the answer at least not today, that we do think that is highly concentrated for 16 of them. So, insurers and their regulators are doing more than they've ever done, and they're not doing it fast enough. That we have that expression, the canary in a coal mine, well, you don't want the canary to die because of bad gas in the coal mine. Our insurance industry is in a very serious place, so we need to make lots of changes and that affects the regulatory work, what they're offering, what they're not offering.

Should insurers be offering insurance for a new coal plant? Well, forget the environmental issues for a second, just the business issues, the risk there is enormous. There've been over 300 coal plants that have closed, do you really want to insure something like that? And on the other side, there's one insurer I know, maybe others, that is not insuring houses in Florida because they have solar panels because they think it's quote, too dangerous for the roof. So, there are some great leaders in the insurance industry and we appreciate that, but more needs to be done faster and we're running out of time.

Mother nature doesn't really care whether the state's a blue state or a red state when it has floods, the fires, the tornadoes, all the rest of it. Again, when I was growing up, this idea that you could live anywhere and you'd get insurance, well, that's no longer the case. Or if you can, maybe it's so expensive. Many states have a residual market, meaning if you can't get private insurance, the state offers insurance.

24:06

Well, in Florida, there's over 1.7 million people in that residual, and the residual markets are always more expensive and they have less coverage and the state shouldn't be in that business. They're only in it because the private market's not working, so that is an indication that the private market needs to work better.

Chris Wedding:

You mentioned regulation a few times here. For insurance to win/face fewer risks as it relates to a low carbon future, is it mostly through regulation? Is it through different business models? Is it outsourcing some of this innovation to startups in this space? Some of them listening to the podcast here, what gets them to be insurers during this low carbon future we're entering?

Steven Rothstein:

So, the journalist and author H.L. Mencken once said, “For every complex problem, there's a simple answer that's always wrong,” and this is one of those. That there is no simple answer, it is all of the above. We all need to do it, so I encourage every listener to contact their insurance company and say, “What are you doing about climate? I'd love to see your climate report. What are you doing in your investments? Are you introducing new policies for wind and solar and other areas?”

So, customers need to do it. Insurance leaders need to look at this. There is enormous opportunity for insurance tech and new entrepreneurial spirit here. The regulators and insurance, unlike the banks, insurance are regulated as the state level. There's no federal insurance regulator. It's all state, so you're seeing a wide range of some of the policies. They all need to do it and we're running out of time. I mean, by 2030, we need to reduce emissions by 50% and we're already seeing impacts in terms of the cost, floods, and fires, and tornadoes, and things like that. We need to move fast, and all of us need to do it for insurers and I'd say almost the same thing for banks, banks also.

26:24

Just to put it into context, in 2008 for the banks, when we had the subprime housing crisis and they looked at the balance sheets of a few of the banks that led to this whole crisis that led to a recession that lasted for many, many years, there is more risk on US bank balance sheets today, more risk because of climate risk of their customers than there was by far of the subprime housing, by far. So, our banks have a lot more risk today and our banks and bank regulators, again, are acting, but none of them are moving faster.

Chris Wedding:

Yeah, that's quite the comparison for sure. Back on that lovely quote that's the opposite of Occam's razor, who said that again?

Steven Rothstein:

H.L. Mencken and I've given you the concept, the words may not be exactly.

Chris Wedding:

No, I've heard it before, I think you're spot on. I just want to make sure so I cannot forget it in the future. The simple solution is not necessarily the right one, despite Occam's razor. Let's do a couple of things, not at the same time.

One, I want to tie this conversation to all of us in our retirement accounts and then the other, I want to tie it to where a lot of our listeners are in the entrepreneurial space or investing in the entrepreneurial space, which I know is also part of your background. Starting companies in the environmental space, teaching this, I believe at, was it Boston University? Where were you teaching this?

Steven Rothstein:

Boston University, I did, yes.

Chris Wedding:

Yeah, okay. We've been somewhat high level, very important macro trends here in the space. For the founders listening, what kinds of advice or recommendations come to mind translating this to, again, launching, growing, et cetera, out competing perhaps?

Steven Rothstein:

I guess there are a number of things, great question, as all of them are. First is, this is an enormous business opportunity. The UN has projected that the world needs to spend around four to five trillion, with a T, trillion dollars a year to help with this transition, so that's four to five trillion of business opportunities. Again, it's not just for those selling EVs or solar. It could be carbon capture, it could be energy efficiency, or it could just be the process. You're in a different company and you're reducing the amount of energy you're using. You're reducing the amount of carbon, water, biodiversity. So, first is there's enormous opportunities.

Second is, all of your listeners, well, probably have in their company, retirement funds, a 401(k) or 403(b) for their employees. 95% of companies today do not offer a climate-oriented fund so that if their employees wanted to invest based on their values, they wouldn't have that option. If you want to be a climate leader, that's one of the things we think everyone should offer that. You're not going to tell people that's what they have to do, but to at least have it on the menu, so to speak, and then educate people about the range of opportunity that there is.

For some of your listeners, they're focusing in the US, some they're working internationally and there's enormous opportunities in countries. Just as a telephone industry, there are some countries that went from no telephone straight to cell phone, and now there's cell phone, you can do mobile banking in it. They skipped a whole generation of technology. The same thing with energy. There are countries that don't have renewable power, and they can skip a hard wire and go right to renewables and be better for the planet, and they could even be ahead of us in many ways. So, again, while there are enormous risks, and I spent a lot of time talking about those, it's important to remember the opportunities and that we are only going to solve these by, not just the large established players doing what they've always done, but we need people to break the glass, so to speak, with entrepreneurs doing amazing, creative, resourceful ideas.

30:59

Chris Wedding:

Yeah, I love that. I wonder if we could switch maybe from talking about Ceres and big capital markets discussions to more talking about your path, Steve. We talked about in the early part here, how you've worked for a number of positive impact organizations. What advice might you give your younger self or maybe emerging founders, entrepreneurs, et cetera, listening to be more effective, even happier along this path of growing, leading high impact organizations?

Steven Rothstein:

First is, I'm probably not the best person to give advice because the standard advice is you should do something, get better and better and better and go deeper. I have been in a variety of different sectors and I’ve been fortunate enough to be successful in those because of great people around me.

When I think about a new enterprise, I ask three questions. One is, is the mission going to get me out of bed and keep me excited? Because there's so many people that dread work and I get inspired by it. So, is the mission exciting? The second question is, do you feel positive about the people? I'm learning from people all the time and amazing people so that's a big part of my judgment about the people. Then the third is, am I learning? For me, if I'm not learning, then it is not as rewarding. So, the mission, the people, and the learning.

I would say more broadly to your listeners, figure what's important to you individually. Not in a business, just individually. What are your core values and what's important? Because work is hard. It is a four-letter word. It's a pain and there are days that are incredibly frustrating, so you have to have that inner kind of what's driving you and whether it's a for-profit or a nonprofit, doesn't really matter in that sense. So, figure what's important to you. For some people, it's the things I mentioned, for other people, it's traveling, for other people, it's making a lot of money. It's hiring a lot of people. Whatever it is, and be true to that to yourself.

Chris Wedding:

One way I think about it is asking, what are you solving for, right?

Steven Rothstein:

Absolutely.

Chris Wedding:

Either in the work or as a lifestyle, what are you solving for? Which, I think to the hungry graduates that I get to teach at Duke and UNC, it’s easy to think about, it's the title or it's the comp, et cetera, et cetera. But when you go into some of these jobs and it's 80 hours a week, it's like, “I have no life for the next two years. Maybe I should have thought about what else I'm solving for.”

Some people hopefully will go to your LinkedIn and they'll see some of these bullets during your tenure as president for the Perkins School for the Blind. I wonder if you can elaborate on this one where you talk about expanding services from 40,000 to almost 900,000 people. I know many listeners think, “Look, how do I not just make incremental changes in top line revenue or those I reach, but step changes?” What are some things that led to that multiple of growth of impact, if you will, Steve?

34:29

Steven Rothstein:

By the way, I spent my junior year at Duke University, Public Policy program. So, great affection for North Carolina. One of the things that I think about in every job is, how can I help to create an unfair competitive advantage? What does the organization have that they're good at and grow?

At Ceres, we have, again, investors representing $50 trillion, so we have a strong investor voice that gives us opportunity to speak with a louder than the size of our employees. Perkins is the first school for the blind in the United States, a school that Helen Keller taught and was doing amazing work before I got there, but fundamentally was doing more teaching of kids. I said, “Well, why don't we also teach teachers who will teach kids and do that around the world?” And so, again, this was done, I don't want to say it was just me, it was lots of people and it started before I got there, but when I left, we were in 67 countries serving and doing. At the beginning, this was 15 years ago, so the beginning of online education. Looking at technology and not requiring everyone to come, get in a car and go to the campus, but to go online and you could train teachers who will then train their kids.

Whether it's working with kids who are blind or work at Ceres or my other work, it's looking at, what are the organization really good at and how do we not exploit that in a negative way, but how do we help to grow that and have a bigger, bigger impact? Because you're right that life is so short. I don't want to have an incremental change. I want to have as big an impact in the short time I have left on this earth.

Chris Wedding:

Amen. Speaking of which, what are some habits or routines, Steve, that keep you healthy, sane, and focused, whether it's in your current role or in this trajectory leading these organizations?

Steven Rothstein:

Well, I appreciate the implicit implication that I am happy, sane, and focused. We can again debate that later, but I guess it's three things. It's finding work that you find meaningful. That doesn't mean it has to be a nonprofit, whatever it is in terms of your area, the people you work with and all of that. So that it's not that whatever number of hours you work, it's not, oh my God, it's dread. That doesn't mean that work is easy, it can be really hard, but it can be stimulating. So, finding that.

Finding whether it be a life partner, friends, family, people, for me, I have a wife and two kids and a granddaughter and friends, those are critical, never enough time, but critical. Then figuring out what does it for you. For me, jogging is gracious. I'm slower than a real jogger, but getting out there helps to clear my mind. So, a combination of doing things for yourself, like for me, that’s physical activity, the people around, family and friends, and then having the work that is stimulating and rewarding so it is not a drudgery.

Chris Wedding:

I'm going to ask you a two-part question and they're related. How often do you jog and how often do you want to jog?

Steven Rothstein:

I'm in Boston, so in the winter it's less. When it's not the winter, it's probably three or four times a week.

38:15

Chris Wedding:

Nice.

Steven Rothstein:

And if I had time, I would do it every day.

Chris Wedding:

Okay. So, I'm just saying, now you have tens of thousands of folks as your accountability partners here, Steve. They'll be pinging you on LinkedIn, “Hey, it's not winter. Have you jogged today, buddy? I care about your health and longevity.”

Steven Rothstein:

I appreciate it.

Chris Wedding:

That's nice. You mentioned your friends and family, but hard to make time. What's a technique or two where you've found ways to carve out more time for friends or family?

Steven Rothstein:

Just do it. In other words, don't wait till everything is done. I have a job, many of the listeners probably have jobs that's quote, never done, it's not like you can work and then you go home and you don't think about it. Appreciate those moments, whether it be your kids or nieces or nephews or things. My wife and I have been married now 36 years and time flies, so just appreciate every one of those days because you never know what will happen to any of us.

Chris Wedding:

Yeah. All right. The takeaway there is follow Nike's advice, just do it.

Steven Rothstein:

Exactly. Just do it. Exactly.

Chris Wedding:

Make time. We're getting close here, but maybe give us a podcast or a book or something that you think listeners would find some value on these topics.

Steven Rothstein:

You mean in addition to your podcast?

Chris Wedding:

I mean, is there anything else? But yes, that's right.

Steven Rothstein:

There are a lot of books on this. Most of them are pretty sobering and I just -- Oh, shoot. I don't have it in front of me, so I don't remember the title. Just read one about the migration and it talked about how by 2050, if we don't make significant changes, a billion people may be forced to move. They won't be able to live or work where they live or work, because of climate issues. And think about the crisis we're having now with the tens of thousands of people, this has gone exponentially more, but it's in the other room, I don't remember the title. That was the one I just finished reading and found it very rewarding and sobering as well.

40:35

Chris Wedding:

Well, what a book like that does is it takes this green topic, if you will, and post it in light of human beings, not panda bears, God bless them, but our welfare, health and safety and such. Steve, awesome power-packed chat here. What's the message or call to action you'd love to leave listeners with as we wrap here?

Steven Rothstein:

That the problem we're facing with climate is a problem that needs all of us. This is not one where you can say, “It's someone else's issue,” or, “I'll let the government deal with it,” or, “I'll let the banks, or, “I'll let the entrepreneurs.” We all need to do it in small ways. Again, think about who you bank with, who you insure with, where you shop, what kind of food you eat. I'm not saying you have to go completely, “I'm a vegetarian,” so vegetarian or vegan, but do as much as you can do.

The real question is in the next month, will all the listeners do something that's a little different, makes them uncomfortable? Maybe ask a question they didn't ask before because if not, then a year from now, two years from now, we're going to be worse. The climate issue is worse, but as I say, it's also for the people who are most in need, those low- and moderate-income families that they're at the front lines.

A low-income community in an urban area, it is 2.3 degrees hotter than it is in the suburbs, 2.3 degrees hotter and that's because there's less trees, less parks, more exhaust. If you're already having health issues, you don't have good food quality, you don't have access to that and it's already 2.3 degrees hotter, it's going to be a lot worse. So, it's up to all of us because we all have a short time on this earth and it's important for the next generation and my granddaughter and her generation.

Chris Wedding:

Hear, hear! It takes all of us and do something uncomfortable within the next 30 days. That's a great place to end for now, Steve. Love you bringing the skills from your prior leadership roles to Ceres, helping to be the tip of the spear for investors with 50 trillion bucks of assets to mitigate risks and capture new opportunities for all of us to retire comfortably.

Hey man, keep up the good work, talk soon.

Steven Rothstein:

Thank you. Thank you for these important conversations you're having with people, I appreciate the opportunity.

Chris Wedding:

Hear, hear!

ABOUT OUR PODCAST

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