Mindy Lubber | Greentech Capital Advisors

Mindy Lubber


Sustainable Heroes III

Climate Warrior for Good

Mindy Lubber is the CEO and President of Ceres, a sustainable non-profit organization working with some of the most influential investors and companies who are building a more sustainable future. With over 36 years in sustainability, Mindy has been instrumental in advocating for change and accelerating the flow of capital into sustainable activities.

Where does your passion for sustainability and sustainable investing stem from?

I have spent the better part of the past 36 years working in sustainability in one way or another: as an advocate running NGOs, as a regulator running the EPA in the six New England states during the Clinton administration, as a lawyer, and as the head of a small investment firm, Green Century Capital Management, which I started in 1990 and is still going.

When you’re fighting for change and trying to move complicated systems that have a desire not to be moved, you have to do multiple things. Whether it is lobbying, litigating or using capital markets as part of the solution set, no one thing is going to change these problems; you have to look at a broader set of tactics and strategies.

When I left government and running the EPA’s New England Regional Office in 2001, I took time to really think: How are we going to get climate change under control? And it became clear to me that we weren’t going to win if I spent three years at a company, or four years lobbying for new regulations on cars or energy systems. That is too slow. You don’t get to yes without capital markets, without the financial community and the corporate community.

So I made a decision then to spend at least a portion of my career changing capital markets systems and players. And the debate really has changed. Companies and investors no longer roll their eyes when you talk to them about climate risk or water risk. They no longer think that it’s a cute topic that they will deal with in their foundations. They understand the need to act from a scientific, human health, environmental, as well as an economic perspective.

What trends can you share on sustainable investing? What has changed in the past couple of years and what triggered this change?

There is no doubt that there has been substantial if not radical change over the last five years. It has been extraordinary, but it is still not enough. Part of this progress has come because we can now see the problems arriving from climate change. Ten years ago people wanted to believe that it’s something that is going to happen at the end of the century, but we just need to look at the tsunamis in Southeast Asia, the forest fires in California, the storms in Houston and Puerto Rico, to understand that these problems are real and that they are happening now. The data and the science is much clearer. The imperative to act is that much more urgent.

Ten years ago it was the social investment funds and the religious funds, and now it is $32tn of institutional capital, including major institutional investors from every continent - Europe, Australia, Japan and the U.S. all looking at and analyzing climate risk.

And we are seeing far much more action than we could have ever imagined. We have a project, Climate Action 100+, where 340 investors, with assets under management totaling more than $32tn, are focusing on the 100 largest emitters of carbon and as their owners, working together to prevail upon those companies to change. To bring their carbon footprint down, to disclose more, to not fight public policy, and to call upon their supply chains to do more.

Ten years ago it was the social investment funds and the religious funds, and now it is $32tn of institutional capital, including major institutional investors from every continent – Europe, Australia, Japan and the U.S. all looking at and analyzing climate risk.

Now I will tell you this: they still have money in fossil fuels. $350bn has been invested into renewable energy, and that is a good start. But we need upwards of a trillion dollars a year to reach our climate targets, hence we need more investors on this side of the equation.

At Governor Brown’s Global Climate Action Summit (GCAS) this past September in California, we also released something called the Investor Agenda, an initiative established together with a number of other investor organizations and standard setters. Nearly 400 investors commit- ted to put more money into renewable energy, clean technology and clean transportation systems, disclose more about financial risk, call on companies to bring their carbon footprint down and stand with us on public policy.

Investors have been showing up and making the case at each round of climate talks (Paris, and most recently Poland) that investors want to see action, and they want to see action soon. They know that the scientific reasons to act are clear and the economic perils we face equally as clear, if we don’t act on climate. As the National Climate Assessment recently stated, climate change stands to take a 10% bite out of the U.S. economy and of course far more globally.

Looking at the vast variety of ESG methodologies and metrics, when you speak to investors, what are the biggest challenges hindering investors from applying ESG metrics in their investment decision?

There is a lot of information out there and some of it is quite good. I am impressed with the Global Reporting Initiative (GRI), not because Ceres founded and launched it, but because under GRI 8,200 multinational companies are already disclosing on some ESG metrics.

The Sustainability Accounting Standards Board (SASB) has since worked to make those metrics more material and financial by using industry specific standards, and that is improving the reporting quality. The Task Force on Climate-related Financial Disclosures (TCFD), which requires companies to disclose their climate risk is another highly regarded design. I do think we can have more decision-useful data for investors, but I don’t want to throw the baby out with the bath water. There is a lot of good data out there. Go to the Bloomberg platform that every investor uses; they are all using that ESG data, and it is being incorporated into investor decisions every day as we speak.

More and more financial analysts are integrating ESG data into their core assessments. We continue to work with analysts on how to analyze climate risk and water risk, for example, based on the data available. We have been pushing for the last decade for stock exchanges to mandate the disclosure of material sustainability issues, and they are just now starting to do that. We were even able to get the SEC during the Obama administration to require that climate risk and water risk be disclosed in formal SEC documents. This isn’t necessarily enforced at the moment, but the skeleton still exists. It was used before and will be used again.

There are also bills in Congress. Senator Elizabeth Warren has one to require better risk disclosure in formal SEC filings. So we may be on a little detour, but we will get there, because the financial risk to thousands of companies and dozens of sectors is as real as currency risk, inflation risk, trade risk, etc.

In your report, Turning Point – Ceres’ third assessment of corporate progress against key expectations of The Ceres Roadmap for Sustainability, you said, “It is no longer just about raising the ceiling. It is about lifting the floor.” – what more needs to be done to fight climate change and create positive environmental impacts?

We need to go faster and deeper to meet that below 2-degree standard of the Paris Agreement. We are making progress when 503 companies agree to science-based targets within their own facilities and supply chains and when several hundred companies support 100% renewables by 2025. We are seeing the kind of change that we need to see, and we will keep pushing: $350bn dollars of clean energy investments last year is great, but we have to get above $1tn, and we will. Progress, to be sure, but not nearly enough.

The projects are there. We need to make sure that the next $50bn of bonds are green bonds, and they are financing bridges, highways, schools and airports that are built in a much more sustainable manner.

And look, in this day and age, one doesn’t have to lose money. Investments in sustainable projects, be it bonds or equities, are showing competitive returns. No one is suggesting you need to compromise, it is just no longer the case. The amount of money going into sustain- able investing has radically changed over the last couple of years. Over the last 2 years we have gone from $8.7tn to $12tn of capital allocated to sustainable investing. That is a 38% increase and a sign that there are plenty of investment opportunities and people want to invest in sustainable companies or funds.

Over the last 2 years we have gone from $8.7tn to $12tn of capital allocated to sustainable investing. That is a 38% increase and a sign that there are plenty of investment opportunities and people want to invest in sustainable companies or funds.

You said in your message to investors last year “2017 was a year of unprecedented challenges and extraordinary progress for Ceres” – can you share some insights on these challenges?

It was certainly not easy to move into a time where the federal government either didn’t believe climate change was a problem, or didn’t believe it was their role to stop it. It was stressful and disheartening to hear the President talk about pulling out of the Paris Agreement.

However, it was promising to see states taking direct action and as a result of the “We Are Still In” campaign, a collaborative effort between Ceres, We Mean Business, World Wildlife Fund (WWF), Bloomberg Philanthropies and many others, which launched the day after the U.S. President pulled out of COP 21. We had 2,200 signatures from companies and individual investors within weeks, saying they are still going to set goals and commit to the Paris Agreement, and keep pushing America forward so that we are an equal player even without the President’s support.

That was extraordinarily heartening: overnight, thousands of people saying this problem is real, it’s now, and we have to act.

What sustainable technologies interest you? What should we look out for?

Sustainable transportation is an area where we are going to see a lot of growth. I don’t think that the combustion engine is going to be here in 10 or 12 years. Similar to how we didn’t go from the horse and buggy to the automobile overnight, we are going to go from combustion engines to electric vehicles over the next decade.

We are also going to see growth in alternative, food options that use less chemicals, use less resources and are healthier. Fake meat that tastes like meat is already on the shelves in our markets. We are going to see radical changes in our energy systems, from fossil fuels to renew- ables. We will have massive developments in batteries and grid technologies, which will get us to a clean energy future. And we will see real estate being built and modified differently, because it is the third-largest source of emissions.

We might need policy changes in some instances – tax credits, state laws with renewable energy targets, but we can get there. The technology is there, we just have to move quicker.

Who is your sustainable hero and why?

Wangari Maathai, a Kenyan environmental leader, who knew that environmentalism was tied to democracy and peace – and therefore she fought for all of these values. She always took a wholistic approach to sustainable development, human and women’s rights and brought a new wave of leadership to Kenya and across Africa.

Mindy Lubber

About Sustainable Heroes

Join us on a journey into the hearts and minds of some of today’s greatest heroes, who have dedicated themselves to positively impact tomorrow’s world. We invite you to explore with us what makes these heroes tick, what drives them to overcome arduous trials and immense challenges, known and unknown.

In this issue, we pay homage to a leaders in renewable energy, a transportation and mobility expert, a sustainable nonprofit director and an open seas explorer  – all of whom share the goal of creating a sustainable world that is more resilient as well as financially stable.

We encourage you on your own quest for ways to innovate, embrace sustainability and do the right thing. Become a heroine or hero to others and help us together solve the problems threatening our very survival. To each of you heroes and heroines, there is a brighter, more sustainable future that we can build together for future generations.

We welcome nominations for people you’d like to see featured in future editions. Please send your nominations and other comments to anikolausson@ greentechcapital.com. 

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