Explore the Thinking behind our investment approach

An increasing number of asset managers are hiring climate scientists to do research, as it is very difficult to separate climate-focused investment strategies from climate risk science and data. In this week’s edition of The Great Repricing, Jeff sits down with Dr. Kimberley R. Miner, a climate risk scientist at the NASA Jet Propulsion Lab and Assistant Professor at the University of Maine’s Climate Change Institute. Dr. Miner offers her perspective on a variety of topics, including her work and research in the Arctic Poles, why the capital markets should be concerned about climate change, and the accuracy of scientific climate forecasting. Noting that the effects of climate change are interrelated around the globe, Dr. Miner emphasizes that the commodities market is pricing out earth systems and that everything in the market is intrinsically tied to what occurs on the planet.

In our conversations, experts who’ve been working in the ESG and climate investing industry for years often comment on how the level of information and new insights can be overwhelming. Prioritizing time to learn can also be a challenge for a busy advisor. Moreover, the trade-offs and complexities associated with mitigating and adapting to climate change should not be underestimated. As an industry and as a global society, we are going to make mistakes along the way, as learning is a continual process. In this week’s edition of The Great Repricing, Jeff offers a brief editorial speaking to what he feels is the essence of ESG and climate-focused investing, particularly in response to some of the political criticisms that we have been seeing recently in the media. ESG, he argues, is not about choosing one political party’s values over another, but rather is about looking for value in the companies we are investing in within the ever-changing landscape and environment that we find ourselves:

Buildings generate nearly 40% of annual CO2 emissions. [1] Despite being the #1 contributor to greenhouse and carbon emissions, the built environment is often overlooked as a significant contributor. In this segment of The Great Repricing, Jeff speaks with John Williams of Autocase about streamlining the decarbonization of the built environment by using cloud-based computing to automate lifecycle costs, carbon analysis, and cost benefits for specific buildings. What historically took months and thousands of dollars to measure can now be automated at a fraction of the cost through Autocase’s software. This scientific process allows for more transparency and better building design to reach net-zero commitments and address society’s need for healthier living spaces along with commercial resilience.

Dear Friends, As many of you know, I began sharing The Great Repricing concept last year, first by producing a conference and then a report that shared this title. I defined The Great Repricing then, and still define it now as: a gap between the identification of specific, measurable climate risks and logical anticipated asset repricing. While we can despair from the onslaught of climate risk news, there is also much to learn, along with opportunities to solve some of humanity’s greatest challenges. In my quest to explore this gap, I want to personally welcome you to our new channel on Fintech.tv, also called The Great Repricing, where we review stories at the intersection of climate and capital. In the inaugural episode with Felix Hermes, Head of Private Equity & Sustainable Infrastructure for BlueOrchard, we discuss the shift from climate mitigation to adaptation, the challenges, and opportunities for investing in this growing field, and why it is so important to focus on emerging and frontier markets. Every week, I will be inviting financial advisors and industry professionals to discuss the latest news and developments in the world of climate finance. Whether you’re looking for ways to protect your client portfolios from environmental risks or seeking to better understand climate change, The Great Repricing is here, and I invite you to join me. Check it out and let me know what’s on your mind, as we navigate the intersection of climate and capital. Kind Regards, Jeff

Many people are unaware of how the fashion industry connects to climate change. Yet, it is estimated to account for a staggering 2 – 10% of global greenhouse emissions,1 as it touches so many aspects of our economy, prompting many to believe that the fashion industry must become more sustainable. But where do we start? Lex Kiefhaber, Founder & CEO of United by Zero, believes that the answer lies in consumers being more mindful about how the clothes they buy are manufactured throughout various levels of the global supply chain. In this episode of TheIMPACT, Lex speaks with Jeff about how United by Zero is helping people find sustainable alternatives to fashion with the click of a button:

The history of environmental education parallels Earth Day and the modern environmental movement. Evolving from the Nature Study and conservation education, environmental education formalized in the late 1960s and gained traction in the 1970s. Climate education has recently evolved to address the global and local impacts of anthropogenic climate change. The speed of climate integration into the capital market structure along with policy changes continues to require ongoing learning by financial advisors to remain relevant. At Gitterman Asset Management, we are focused on improving literacy among advisors with educational pieces and thought leadership. There is no “one and done” approach to climate education, which is why we keep talking to people. With so much information coming out, it is sometimes good to go back to foundational concepts. In celebration of Earth Day, we find the following conversations particularly insightful and worth looking at again. Relevant now for different reasons, these favorite moments of ours continue to be informative and fundamental. A cathartic conversation between Jeff and Spencer Glendon, Ph.D., Senior Fellow at Woodwell Climate Research Center, titled Climate Risk and the Capital Markets, frames out how market participants can rise to the challenge of a future that will have vastly different rules. While stable capital markets are predicated on a stable world, climate change is forcing us to rethink numerous factors as we head towards a level of instability that is currently not accounted for in financial modelling: The SEC recently issued the long-awaited Climate Disclosure Proposal, signaling a shift by regulators to begin managing climate risk in the U.S. financial system. In Jeff’s conversation with Bob Litterman, Chairman of the Commodity Futures Trading Commission (CFTC) Market Risk Advisory Committee and Co-founder of Kepos Capital, titled Managing Climate Risk, go behind the scenes to learn how the foundation for climate policy was drafted amongst key stakeholders in order to facilitate a rapid transition to a low carbon economy: Finally, in the ongoing tradition of Earth Day, we offer you the inspiration that launched Jeff’s shift towards sustainable finance. As a co-producer of the feature documentary film Planetary, the ensemble of Bill McKibbon and Paul Hawken along with astronauts, scholars, and other visionaries offer a poetic and humbling reminder that it’s time to shift our perspective: Happy Earth Day 2022, may you be well informed by these voices from the past. We remain dedicated to your success. Look for news about more practice building events in the coming weeks.