1 00:00:01,280 --> 00:00:04,920 Speaker 1: Welcome to zero. I am Akshatarti. This week climate investing 2 00:00:05,120 --> 00:00:22,200 Speaker 1: in the Trump era, things are getting a bit uncertain 3 00:00:22,400 --> 00:00:26,759 Speaker 1: out there. Tariffs go up, then they come down. Policy 4 00:00:26,800 --> 00:00:30,440 Speaker 1: gets announced, then it gets scrapped. The whole world is 5 00:00:30,480 --> 00:00:32,879 Speaker 1: working out how to exist in this new era of 6 00:00:32,960 --> 00:00:37,760 Speaker 1: policy determined by US President Donald Trump via social media posts. 7 00:00:38,240 --> 00:00:41,120 Speaker 1: What is not uncertain, though, is the need for climate 8 00:00:41,159 --> 00:00:45,000 Speaker 1: solutions and the need for money to implement those solutions. 9 00:00:45,680 --> 00:00:48,680 Speaker 1: So today we are talking to a climate investor, someone 10 00:00:48,680 --> 00:00:51,760 Speaker 1: who is to make those decisions here and now about 11 00:00:51,760 --> 00:00:55,920 Speaker 1: which companies and technologies to invest in. Greg Wasserman has 12 00:00:56,000 --> 00:00:59,560 Speaker 1: been investing in climate companies for nearly twenty years. He 13 00:00:59,600 --> 00:01:02,520 Speaker 1: began his career working at Golden Sachs, then became the 14 00:01:02,560 --> 00:01:05,399 Speaker 1: head of the Global Solar Initiative at the Clinton Foundation, 15 00:01:06,120 --> 00:01:09,560 Speaker 1: and spent eight years after that as a partner at 16 00:01:09,600 --> 00:01:14,319 Speaker 1: Al Gore's Generation Investment Management. He now leads the private 17 00:01:14,319 --> 00:01:18,360 Speaker 1: company climate investment team at Wellington Management, investing in companies 18 00:01:18,400 --> 00:01:22,559 Speaker 1: that are not yet publicly listed. Wellington has well over 19 00:01:22,600 --> 00:01:26,960 Speaker 1: one trillion dollars of assets under management. So I asked him, 20 00:01:27,319 --> 00:01:30,080 Speaker 1: is twenty twenty five a good time for investing in 21 00:01:30,120 --> 00:01:34,600 Speaker 1: climate focused companies, Where are the climate innovations happening, and 22 00:01:34,680 --> 00:01:40,120 Speaker 1: how should investors think about handling growing market uncertainties. Also, 23 00:01:40,400 --> 00:01:43,880 Speaker 1: we are recording this interview on May twelfth, Monday afternoon, 24 00:01:43,920 --> 00:01:47,520 Speaker 1: London time. Worth noting because the news has been changing 25 00:01:47,640 --> 00:01:55,680 Speaker 1: quite rapidly these days. Greg, Welcome to the show. 26 00:01:55,760 --> 00:01:57,000 Speaker 2: Good to see you, appreciate being here. 27 00:01:57,480 --> 00:02:00,040 Speaker 1: So you've been investing in climate since two thousand and six, 28 00:02:00,400 --> 00:02:03,280 Speaker 1: almost twenty years, and you've been at many places doing this. 29 00:02:03,600 --> 00:02:06,960 Speaker 1: So thinking about today and what has changed over the 30 00:02:07,000 --> 00:02:10,280 Speaker 1: last twenty years, how do you think the space has evolved, 31 00:02:10,400 --> 00:02:13,200 Speaker 1: and what is your thesis for choosing the right companies 32 00:02:13,200 --> 00:02:13,800 Speaker 1: to invest in. 33 00:02:14,160 --> 00:02:16,800 Speaker 2: Yeah, it's definitely been a big evolution in the time 34 00:02:16,800 --> 00:02:19,400 Speaker 2: that I've been invested across the space, and I really 35 00:02:19,400 --> 00:02:23,040 Speaker 2: think there's been a couple key changes. One is, when 36 00:02:23,080 --> 00:02:25,320 Speaker 2: I first started investing back in two thousand and six, 37 00:02:26,400 --> 00:02:31,480 Speaker 2: most climate related technologies were really expensive. This was early 38 00:02:31,560 --> 00:02:34,320 Speaker 2: days of soul or early days of wind. People weren't 39 00:02:34,320 --> 00:02:37,440 Speaker 2: even talking about with some of the AI or resilience 40 00:02:37,520 --> 00:02:39,519 Speaker 2: or connectivity solutions we have today, and so everything was 41 00:02:39,560 --> 00:02:42,040 Speaker 2: just really expensive. And so at that time it was 42 00:02:42,080 --> 00:02:45,079 Speaker 2: all about you have these emerging technologies that we think 43 00:02:45,120 --> 00:02:47,800 Speaker 2: can play a role in be green. They're very expensive 44 00:02:48,120 --> 00:02:50,000 Speaker 2: and we need government support to get down the cost 45 00:02:50,040 --> 00:02:53,040 Speaker 2: curve and get them deployed. And everything was really built 46 00:02:53,040 --> 00:02:56,040 Speaker 2: around some version of that government support to get things going, 47 00:02:57,080 --> 00:03:02,560 Speaker 2: or dependence on willingness of people to pay a green premium. Right, 48 00:03:02,600 --> 00:03:05,639 Speaker 2: So either I want green, I'm willing to pay more 49 00:03:05,720 --> 00:03:08,400 Speaker 2: for it, or I want to be green and I'm 50 00:03:08,440 --> 00:03:10,760 Speaker 2: willing to acceect a worse solution. Right. If you think 51 00:03:10,800 --> 00:03:13,400 Speaker 2: about early days of green cars or early days of 52 00:03:13,440 --> 00:03:15,440 Speaker 2: you know, plant based foods and things like that that 53 00:03:15,480 --> 00:03:17,720 Speaker 2: were just worse green laundry detern it that dan clean. 54 00:03:17,720 --> 00:03:19,280 Speaker 2: People are just willing to take that to be green. 55 00:03:19,800 --> 00:03:21,480 Speaker 2: And so I think if you roll forward to today, 56 00:03:21,880 --> 00:03:25,560 Speaker 2: there's just been a massive technological shift where R and 57 00:03:25,639 --> 00:03:28,440 Speaker 2: D and innovation has just gotten things to where the 58 00:03:28,480 --> 00:03:31,840 Speaker 2: performance is much better and the cost is much cheaper. 59 00:03:32,240 --> 00:03:34,519 Speaker 2: And so that's really flipped that equation on its head 60 00:03:34,520 --> 00:03:36,960 Speaker 2: where you know, many times the green solutions now better 61 00:03:37,000 --> 00:03:39,240 Speaker 2: and you know, electric vehicles is kind of the obvious 62 00:03:39,320 --> 00:03:41,400 Speaker 2: clearest example of that. And so I think you see 63 00:03:41,440 --> 00:03:45,200 Speaker 2: that dynamic playing across a lot of technologies that we see. 64 00:03:45,280 --> 00:03:48,760 Speaker 2: Then if I think about the market for capital, right, 65 00:03:48,800 --> 00:03:51,760 Speaker 2: I'm obviously investing kind of growth equity and private capital 66 00:03:51,800 --> 00:03:54,160 Speaker 2: out there, and I think the market there has really 67 00:03:54,200 --> 00:03:56,920 Speaker 2: evolved as well, you know, pretty substantially. If you look 68 00:03:56,960 --> 00:03:59,920 Speaker 2: back twenty years ago, there were a number of green 69 00:04:00,240 --> 00:04:02,600 Speaker 2: funds out there that focused on climate change that were 70 00:04:02,880 --> 00:04:06,480 Speaker 2: basically all venture capital funds that were doing asset heavy 71 00:04:06,480 --> 00:04:09,040 Speaker 2: deals that VC funds, you know, really shouldn't have been doing. 72 00:04:09,080 --> 00:04:10,880 Speaker 2: But that was the one pocket of green capital that's 73 00:04:10,920 --> 00:04:12,920 Speaker 2: out there. And then if you roll forward to how 74 00:04:12,920 --> 00:04:15,680 Speaker 2: the markets evolved today, there's so much segmentation that's come 75 00:04:15,720 --> 00:04:19,000 Speaker 2: out where you now have early stage VC, growth stage VC, 76 00:04:19,400 --> 00:04:22,840 Speaker 2: you have buyout, you have private equity, you have infrastructure finance, 77 00:04:23,360 --> 00:04:25,680 Speaker 2: you have sector specialists, you have people that do deep tech, 78 00:04:25,720 --> 00:04:28,720 Speaker 2: people that do digital, everything in between. And so there's 79 00:04:28,720 --> 00:04:31,440 Speaker 2: just much more of a segmentation in the capital that's 80 00:04:31,480 --> 00:04:34,799 Speaker 2: out there, which really lets you find better match between 81 00:04:34,839 --> 00:04:36,920 Speaker 2: the capital and the risk that wants to take in 82 00:04:36,960 --> 00:04:38,880 Speaker 2: the returns that it's seeking. And so there's just way 83 00:04:38,920 --> 00:04:41,120 Speaker 2: more capital out there to finance things, and so I 84 00:04:41,120 --> 00:04:44,359 Speaker 2: think that's a pretty important evolution that's happened. 85 00:04:44,960 --> 00:04:47,560 Speaker 1: Yeah, my colleagues here at Bloomberg and I have found 86 00:04:47,600 --> 00:04:50,000 Speaker 1: that twenty twenty four, so two point one trillion dollars 87 00:04:50,040 --> 00:04:53,640 Speaker 1: invested in the energy transition, and anything that starts with 88 00:04:53,640 --> 00:04:56,560 Speaker 1: a trillion, you can bet that there's a lot of 89 00:04:56,600 --> 00:04:59,680 Speaker 1: specialization and a lot of variety in the way people invest. 90 00:05:00,000 --> 00:05:02,159 Speaker 1: And then the other thing they recently wrote a note 91 00:05:02,200 --> 00:05:05,760 Speaker 1: about was at least in power generation. Now there are 92 00:05:05,760 --> 00:05:09,920 Speaker 1: places in the world where running existing fossil fuel power 93 00:05:09,960 --> 00:05:14,320 Speaker 1: plants is more expensive than building clean energy projects. Not 94 00:05:14,360 --> 00:05:17,159 Speaker 1: true everywhere, but it is starting to become truer, and 95 00:05:17,240 --> 00:05:19,599 Speaker 1: so now there is in fact a brown premium to 96 00:05:19,680 --> 00:05:23,200 Speaker 1: running things on fossil fuels. So it's been quite the change. 97 00:05:23,320 --> 00:05:26,479 Speaker 1: But let's just situate ourselves in your current role. So 98 00:05:26,600 --> 00:05:31,200 Speaker 1: Wellington has more than one trillion dollars under management. How 99 00:05:31,279 --> 00:05:34,919 Speaker 1: much of that investment is climate oriented and how big 100 00:05:34,960 --> 00:05:37,800 Speaker 1: is your portfolio specifically, both in money terms and the 101 00:05:37,880 --> 00:05:39,520 Speaker 1: number of companies you've invested in. 102 00:05:40,040 --> 00:05:42,480 Speaker 2: Right, we have you know, we have billions of dollars 103 00:05:42,480 --> 00:05:45,560 Speaker 2: in our climate platform and it really spreads across the 104 00:05:45,600 --> 00:05:48,160 Speaker 2: public space and the private space. So we have a 105 00:05:48,240 --> 00:05:51,159 Speaker 2: number of public funds that are focused on climate, either 106 00:05:51,200 --> 00:05:55,520 Speaker 2: dedicated strategies or just energy investment vehicles that also focus 107 00:05:55,520 --> 00:05:58,800 Speaker 2: on climate. We have dedicated strategy that focuses on climate 108 00:05:58,839 --> 00:06:02,200 Speaker 2: adaptation on the public side. And then I'm really focused 109 00:06:02,240 --> 00:06:05,520 Speaker 2: on the private side on companies that are doing growth 110 00:06:05,520 --> 00:06:08,720 Speaker 2: stage deployment of technologies out in the space. And so 111 00:06:08,800 --> 00:06:11,200 Speaker 2: we you know, across the firm, we just have a nice, 112 00:06:11,240 --> 00:06:13,800 Speaker 2: a nice pool of capital that can really cover the 113 00:06:13,839 --> 00:06:14,720 Speaker 2: space pretty broadly. 114 00:06:15,040 --> 00:06:17,839 Speaker 1: And what's the rough average size of an investment that 115 00:06:17,880 --> 00:06:20,680 Speaker 1: you make into companies, what stage are they at sort 116 00:06:20,680 --> 00:06:22,800 Speaker 1: of growth means what for those companies. 117 00:06:23,040 --> 00:06:27,080 Speaker 2: We really look for companies that are in commercial revenue 118 00:06:27,120 --> 00:06:30,880 Speaker 2: and scaling and so not developing their technology and making 119 00:06:30,880 --> 00:06:34,120 Speaker 2: sure it works, not deploying it to their first customers 120 00:06:34,120 --> 00:06:36,640 Speaker 2: and getting through some pilots and proving that people buy it, 121 00:06:36,720 --> 00:06:38,760 Speaker 2: but really one or two steps past that. And so 122 00:06:38,839 --> 00:06:41,760 Speaker 2: these are companies that have at least five million of revenue. 123 00:06:41,960 --> 00:06:44,760 Speaker 2: The average across our portfolio tends to be more like twenty. 124 00:06:45,360 --> 00:06:48,120 Speaker 2: You know, they're generally doubling every year, so these are 125 00:06:48,160 --> 00:06:50,520 Speaker 2: pretty high growth. The stage of company we look at 126 00:06:50,560 --> 00:06:53,680 Speaker 2: is usually in the series B series C, series D. 127 00:06:53,760 --> 00:06:56,080 Speaker 2: If you sort of use venture and growth terms and 128 00:06:56,520 --> 00:06:59,760 Speaker 2: we're investing checks, we can do anywhere from ten up 129 00:06:59,760 --> 00:07:02,560 Speaker 2: to forty million, just depending on the situation. 130 00:07:03,080 --> 00:07:05,440 Speaker 1: Could you give examples of some of those companies, just 131 00:07:05,520 --> 00:07:08,680 Speaker 1: so people might get a sense of how you are 132 00:07:08,680 --> 00:07:11,520 Speaker 1: investing in, where you're investing in, what type of companies 133 00:07:11,520 --> 00:07:11,920 Speaker 1: these are. 134 00:07:12,160 --> 00:07:14,840 Speaker 2: Yeah, sure, we're invested in a company called SPAM that's 135 00:07:14,880 --> 00:07:18,480 Speaker 2: focused on residential electrification and enabling that with a smarter 136 00:07:18,600 --> 00:07:22,360 Speaker 2: software enabled circuit, breaker panel, TS Conductor, which has a 137 00:07:22,400 --> 00:07:27,080 Speaker 2: next generation transmission conductor for more efficient and higher capacity 138 00:07:27,400 --> 00:07:31,480 Speaker 2: transmission build, a company called Ernia that is focused on 139 00:07:31,560 --> 00:07:35,000 Speaker 2: data analytics for energy transition project developers, all the way 140 00:07:35,040 --> 00:07:37,560 Speaker 2: through to a number of companies focused on the manufacturing side. 141 00:07:37,720 --> 00:07:41,280 Speaker 2: Asset Watch that's focused on a hardware software solution that 142 00:07:42,120 --> 00:07:45,320 Speaker 2: monitors equipment to make sure it's operating efficiently and prevents breakdowns. 143 00:07:45,880 --> 00:07:48,680 Speaker 2: There's a number of others, but it's really quite broad. 144 00:07:49,040 --> 00:07:52,040 Speaker 2: I think a theme across everything is we look for 145 00:07:52,080 --> 00:07:55,800 Speaker 2: companies that are either addressing the underlying cause of climate 146 00:07:55,880 --> 00:07:58,560 Speaker 2: change in the form of carbon emissions, and what are 147 00:07:58,600 --> 00:08:01,600 Speaker 2: things that help reduce emissions, and then We also look 148 00:08:01,640 --> 00:08:04,200 Speaker 2: at the effects of climate change in extreme weather and 149 00:08:04,320 --> 00:08:09,320 Speaker 2: just say, how can we become more resilient to fire, storm, drought, flood, 150 00:08:09,560 --> 00:08:12,520 Speaker 2: water shortages of everything that's happening across the board. A 151 00:08:12,560 --> 00:08:15,000 Speaker 2: little bit different than a lot of other climate investors 152 00:08:15,000 --> 00:08:18,240 Speaker 2: out there, we tend to focus a bit more on 153 00:08:18,680 --> 00:08:23,120 Speaker 2: asset light digital solutions versus deep tech science heavy solutions. 154 00:08:23,440 --> 00:08:25,880 Speaker 2: What are enablers to do things better fast or cheaper 155 00:08:26,080 --> 00:08:28,640 Speaker 2: versus looking for big scientific breakthroughs. 156 00:08:28,960 --> 00:08:31,320 Speaker 1: What does success look like? Of course, you're an investor, 157 00:08:31,360 --> 00:08:33,040 Speaker 1: so you're going to look for returns, but you know 158 00:08:33,200 --> 00:08:36,480 Speaker 1: returns from private companies can be harder to get as 159 00:08:36,480 --> 00:08:39,800 Speaker 1: an investor. And beyond the return side, are there other 160 00:08:39,920 --> 00:08:42,800 Speaker 1: metrics on emissions, etc. That you count as part of 161 00:08:42,840 --> 00:08:44,079 Speaker 1: your success? 162 00:08:44,520 --> 00:08:47,240 Speaker 2: Obviously, returns is the key one, you know, very importantly 163 00:08:48,120 --> 00:08:52,319 Speaker 2: a climate strategy. There's no reason that climate strategy should 164 00:08:52,320 --> 00:08:55,400 Speaker 2: have returns that's any different than best in class other 165 00:08:55,480 --> 00:08:58,079 Speaker 2: comparable asset classes, just because you're investing climate. And so 166 00:08:58,120 --> 00:09:01,040 Speaker 2: it's really about that opportunity that comes from investing in 167 00:09:01,120 --> 00:09:03,920 Speaker 2: great founders that have a great idea and can get 168 00:09:03,920 --> 00:09:07,199 Speaker 2: that to market and build scale and get an exit, 169 00:09:07,280 --> 00:09:10,160 Speaker 2: you know, either through an acquisition or through the public markets, 170 00:09:10,480 --> 00:09:14,079 Speaker 2: and then we track the impact that these companies have. 171 00:09:14,440 --> 00:09:18,640 Speaker 2: And so for it to fit a climate strategy, like 172 00:09:18,679 --> 00:09:20,560 Speaker 2: I said before, it has to either reduce emissions or 173 00:09:20,559 --> 00:09:22,920 Speaker 2: it has to build resilience to extreme weather. And so 174 00:09:22,960 --> 00:09:25,559 Speaker 2: we actually track for each company how do they do that, 175 00:09:26,160 --> 00:09:29,360 Speaker 2: and that could be anything from this company sells widgets 176 00:09:29,360 --> 00:09:32,440 Speaker 2: and each widget helps reduce CO two emissions and we 177 00:09:32,480 --> 00:09:34,959 Speaker 2: can track that, you know, all the way through to 178 00:09:35,880 --> 00:09:39,720 Speaker 2: if you are giving investors and energy transition assets access 179 00:09:39,720 --> 00:09:42,599 Speaker 2: to better data so they can make smarter decisions. You 180 00:09:42,640 --> 00:09:44,800 Speaker 2: know how many people are out there, how many investors 181 00:09:44,800 --> 00:09:47,200 Speaker 2: are out there that now have access to smarter decision 182 00:09:47,240 --> 00:09:50,880 Speaker 2: making information, or you know how many assets have been 183 00:09:50,920 --> 00:09:53,640 Speaker 2: built on that platform using that tech. It's really just 184 00:09:53,679 --> 00:09:55,960 Speaker 2: a broad range of metrics like that that are important 185 00:09:56,000 --> 00:09:58,839 Speaker 2: to check the impact these companies are having over time. 186 00:09:59,360 --> 00:10:02,840 Speaker 1: So let's go to the investment environment for climate companies 187 00:10:02,920 --> 00:10:05,880 Speaker 1: right now, which has become more complicated. I mean, you're 188 00:10:05,960 --> 00:10:08,240 Speaker 1: right that it's evolved over the last twenty years, but 189 00:10:08,800 --> 00:10:11,800 Speaker 1: the evolution has been either perhaps been too rapid in 190 00:10:11,840 --> 00:10:14,400 Speaker 1: the past few months, given where policies headed, especially in 191 00:10:14,440 --> 00:10:18,360 Speaker 1: the US. So we've had this backlash against ESG, which 192 00:10:18,400 --> 00:10:21,360 Speaker 1: started even before Donald Trump was elected. How are you 193 00:10:21,520 --> 00:10:23,160 Speaker 1: feeling the ESG backlash? 194 00:10:23,440 --> 00:10:25,200 Speaker 2: I think it really depends that. I think that we 195 00:10:25,280 --> 00:10:27,839 Speaker 2: feel like there's you know, there's huge opportunity right now. 196 00:10:27,960 --> 00:10:30,160 Speaker 2: And if I take your question in a couple pieces, 197 00:10:30,200 --> 00:10:32,480 Speaker 2: so one is the first one that you're calling ESG 198 00:10:32,559 --> 00:10:35,199 Speaker 2: backlash that's obviously been happening, you know, as we've seen 199 00:10:35,200 --> 00:10:37,800 Speaker 2: in the last few months. I think it's largely misunderstood. 200 00:10:37,960 --> 00:10:42,280 Speaker 2: I think ESG generally is misunderstood because the way that 201 00:10:42,320 --> 00:10:45,360 Speaker 2: some people implement it is about checking boxes and you know, 202 00:10:45,400 --> 00:10:47,640 Speaker 2: hitting quotas and things like that. But that's not what 203 00:10:47,720 --> 00:10:52,040 Speaker 2: real ESG is. ESG is all about identifying risks and 204 00:10:52,120 --> 00:10:57,200 Speaker 2: opportunities and making sure that you're minimizing or maximizing those 205 00:10:57,400 --> 00:11:01,320 Speaker 2: ultimately with the goal around investment returns. And so you know, 206 00:11:01,400 --> 00:11:04,600 Speaker 2: on the S side of ESG, on social right, we 207 00:11:04,640 --> 00:11:08,160 Speaker 2: look at that and think it's all about company culture, right, 208 00:11:08,200 --> 00:11:10,800 Speaker 2: making sure that you are taking surveys or your companies 209 00:11:10,800 --> 00:11:13,800 Speaker 2: and making sure that you know any problems coming up 210 00:11:13,800 --> 00:11:15,920 Speaker 2: in the culture, because that's all about employee retention. Which 211 00:11:15,960 --> 00:11:18,920 Speaker 2: is all about driving value for the company. You know, 212 00:11:19,000 --> 00:11:23,520 Speaker 2: the epiece is all about opportunity around the environment, which 213 00:11:24,080 --> 00:11:28,600 Speaker 2: translates perfectly to you know, value generating opportunities. GE and 214 00:11:28,640 --> 00:11:30,559 Speaker 2: governance is all about making sure you don't have many 215 00:11:30,600 --> 00:11:33,400 Speaker 2: of these blow ups that we've seen where people have 216 00:11:33,480 --> 00:11:36,520 Speaker 2: no boards and there's been poor oversight and it's led 217 00:11:36,520 --> 00:11:38,800 Speaker 2: to you know, management teams making really poor decisions and 218 00:11:38,800 --> 00:11:41,920 Speaker 2: there hasn't been proper governance around that or ability to exit, 219 00:11:41,960 --> 00:11:44,120 Speaker 2: and so we really think about it through that lens. 220 00:11:44,160 --> 00:11:48,040 Speaker 2: So it's much more about generating value than ticking boxes. 221 00:11:48,040 --> 00:11:50,760 Speaker 2: And so I think the opportunity there is just as 222 00:11:50,760 --> 00:11:53,280 Speaker 2: real and just as needed as it's ever been. And 223 00:11:53,320 --> 00:11:56,440 Speaker 2: then if I think about the opportunity for climate investing, 224 00:11:56,600 --> 00:11:58,679 Speaker 2: there's a lot of different approaches to how you can 225 00:11:58,760 --> 00:12:03,600 Speaker 2: invest around climate. I think our approach skews towards the 226 00:12:03,679 --> 00:12:08,120 Speaker 2: end that's much more insulated from policy and regulation in 227 00:12:08,160 --> 00:12:10,679 Speaker 2: the sense that everything we look at, you know, we 228 00:12:10,720 --> 00:12:14,480 Speaker 2: generally look for solutions that deliver a value proposition. It's 229 00:12:14,520 --> 00:12:16,120 Speaker 2: not just green. This is kind of what we were 230 00:12:16,120 --> 00:12:20,400 Speaker 2: talking about before. And so the buying decision of the customer, 231 00:12:20,480 --> 00:12:24,000 Speaker 2: whoever en buyer is is not based on green or 232 00:12:24,040 --> 00:12:26,360 Speaker 2: green premium, it's not based on saving carbon, but it's 233 00:12:26,400 --> 00:12:29,600 Speaker 2: about value. This is saving me money, it's solving a 234 00:12:29,600 --> 00:12:32,640 Speaker 2: pain point, it's reducing waste, you know, which translates back 235 00:12:32,679 --> 00:12:34,360 Speaker 2: to money, or it's giving me access to power that 236 00:12:34,440 --> 00:12:36,680 Speaker 2: I have access to. And so we really look for 237 00:12:36,720 --> 00:12:40,520 Speaker 2: those opportunities, and I think in this market that opportunity 238 00:12:40,559 --> 00:12:44,560 Speaker 2: that really hasn't changed obviously for people that invest in 239 00:12:44,600 --> 00:12:49,400 Speaker 2: things that were heavily dependent on DOE loan programs and 240 00:12:49,640 --> 00:12:53,400 Speaker 2: you know, high incentives for hydrogen or high carbon prices 241 00:12:53,400 --> 00:12:56,679 Speaker 2: for carbon capture. It's more complicated right now, but that's 242 00:12:56,800 --> 00:12:58,880 Speaker 2: that's not where we focus because those are a bit 243 00:12:58,920 --> 00:13:01,200 Speaker 2: more on the green premium sort of end. And then 244 00:13:01,240 --> 00:13:04,680 Speaker 2: I think with the whole opportunity around resilience, right and 245 00:13:04,760 --> 00:13:08,400 Speaker 2: just resilience to extreme weather, that only becomes stronger in 246 00:13:08,440 --> 00:13:11,839 Speaker 2: this current environment. If you see US leadership pulling back 247 00:13:11,840 --> 00:13:13,720 Speaker 2: a bit on this issue. One of the things I 248 00:13:13,720 --> 00:13:16,680 Speaker 2: love to say about climate change is the reality is 249 00:13:16,679 --> 00:13:20,840 Speaker 2: climate change doesn't care about politics. Right, wildfires and storms 250 00:13:20,880 --> 00:13:24,400 Speaker 2: and floods are happening more often, they don't care if 251 00:13:24,440 --> 00:13:28,839 Speaker 2: it's Republican or Democrat, and the need to build resilience 252 00:13:28,880 --> 00:13:31,800 Speaker 2: and adapt and survive through those doesn't matter if people 253 00:13:31,800 --> 00:13:34,640 Speaker 2: are Democrats or Republicans. If you have fires, doesn't even 254 00:13:34,679 --> 00:13:37,440 Speaker 2: matter if you think that fire is caused by climate 255 00:13:37,520 --> 00:13:39,240 Speaker 2: change or not. Just reality is there's a fire and 256 00:13:39,240 --> 00:13:41,400 Speaker 2: you have to deal with it. And so the need 257 00:13:41,440 --> 00:13:43,720 Speaker 2: for resilience is just as strong, and I think only 258 00:13:43,720 --> 00:13:45,920 Speaker 2: getting stronger. I think that's big opportunity. 259 00:13:45,960 --> 00:13:49,640 Speaker 1: Said on the S side, one thing that's notable is 260 00:13:49,920 --> 00:13:54,360 Speaker 1: Wellington is still proud about its diversity, Equity and Inclusion section. 261 00:13:54,559 --> 00:13:57,480 Speaker 1: It's still there on It's about Us page, something that 262 00:13:57,600 --> 00:14:00,480 Speaker 1: we have seen many other companies in the US actually back, 263 00:14:00,920 --> 00:14:03,480 Speaker 1: doesn't it. What do you that it might become a 264 00:14:03,480 --> 00:14:05,040 Speaker 1: target for the Trump administration. 265 00:14:05,640 --> 00:14:08,640 Speaker 2: Yeah, I in my role, I tend to ignore that 266 00:14:08,679 --> 00:14:11,040 Speaker 2: noise and just really focus on my role investing around 267 00:14:11,080 --> 00:14:14,560 Speaker 2: climate and I'm proud to be a Wellington and value 268 00:14:14,600 --> 00:14:17,480 Speaker 2: our approach which is all about generating value for our 269 00:14:17,520 --> 00:14:20,360 Speaker 2: companies and ultimately delivering investment returns. 270 00:14:21,120 --> 00:14:25,880 Speaker 1: How do you weigh the uncertainty that Trumpean policies bring 271 00:14:26,000 --> 00:14:28,680 Speaker 1: into investment decisions. You talked a little bit about the 272 00:14:28,720 --> 00:14:32,360 Speaker 1: fact that you're not investing based on policy and regulations, 273 00:14:32,400 --> 00:14:35,920 Speaker 1: you're not reliant on tax credits from the government. But 274 00:14:36,240 --> 00:14:39,680 Speaker 1: it does create an environment that makes it difficult to say, 275 00:14:39,720 --> 00:14:43,000 Speaker 1: get a co investor in a project, or get the 276 00:14:43,040 --> 00:14:48,360 Speaker 1: companies that are classed as climate companies find customers. So 277 00:14:48,760 --> 00:14:51,920 Speaker 1: how exactly do you deal with uncertainty in that instant 278 00:14:51,960 --> 00:14:52,680 Speaker 1: as an investor. 279 00:14:53,000 --> 00:14:57,080 Speaker 2: It's definitely complicated and it's very situation specific. I would say, 280 00:14:57,160 --> 00:14:59,360 Speaker 2: if I think about the pockets of uncertainty right now, 281 00:14:59,640 --> 00:15:01,960 Speaker 2: everyone talks about the Inflation Reduction Act and where that's 282 00:15:01,960 --> 00:15:04,120 Speaker 2: going to end up as part of the tax package. 283 00:15:04,680 --> 00:15:07,760 Speaker 2: We really care about something like solar, and where solar 284 00:15:07,840 --> 00:15:11,120 Speaker 2: ends up. We don't think as much about the hydrogen 285 00:15:11,240 --> 00:15:14,120 Speaker 2: side or the carbon capture side, or wind. We don't 286 00:15:14,160 --> 00:15:16,160 Speaker 2: really you know, we don't really invest much around wind, 287 00:15:16,200 --> 00:15:18,520 Speaker 2: and so for us related to the IRA, it's very 288 00:15:18,600 --> 00:15:20,520 Speaker 2: much about solar, and I think that in a lot 289 00:15:20,520 --> 00:15:23,200 Speaker 2: of ways, regardless of what happens with the IRA, solar 290 00:15:23,440 --> 00:15:26,800 Speaker 2: will still be a very key and growing part of 291 00:15:26,840 --> 00:15:31,680 Speaker 2: the energy environment. Tariffs is the other big uncertainty where 292 00:15:31,800 --> 00:15:33,800 Speaker 2: I think there's two different levels to think about it. 293 00:15:33,840 --> 00:15:37,520 Speaker 2: One is any company either we're invested in or we're 294 00:15:37,520 --> 00:15:40,000 Speaker 2: looking at being invested in. How are they directly impacted 295 00:15:40,000 --> 00:15:43,320 Speaker 2: by tariffs? And so if they manufacture a product, where 296 00:15:43,320 --> 00:15:45,800 Speaker 2: do they manufacture it? And do we have visibility onto 297 00:15:45,840 --> 00:15:50,120 Speaker 2: what that tariff situation will be or not. Sometimes that's extential, 298 00:15:50,160 --> 00:15:52,440 Speaker 2: sometimes it's not. So you just have to look at 299 00:15:52,480 --> 00:15:55,920 Speaker 2: that situation specific and just say, is the likely scenario 300 00:15:56,080 --> 00:15:57,800 Speaker 2: cost maybe goes up a little bit if there is 301 00:15:57,840 --> 00:16:01,080 Speaker 2: a tariff, or is it so much uncertain that if 302 00:16:01,120 --> 00:16:03,760 Speaker 2: the tariffs that are being discussed actually come into play, 303 00:16:03,920 --> 00:16:06,640 Speaker 2: the product doesn't make any sense. And then the second 304 00:16:06,640 --> 00:16:10,720 Speaker 2: one is just what is the underlying impact to different 305 00:16:10,800 --> 00:16:14,440 Speaker 2: sectors that happen from tariffs And so solar A lot 306 00:16:14,480 --> 00:16:16,800 Speaker 2: of solar equipment is subject to tariffs because a lot 307 00:16:16,800 --> 00:16:18,400 Speaker 2: of it comes from you know, there's a lot made 308 00:16:18,440 --> 00:16:20,320 Speaker 2: here in the US, but a lot of comes internationally, 309 00:16:20,920 --> 00:16:22,600 Speaker 2: and so you have to think about how costs go 310 00:16:22,760 --> 00:16:24,760 Speaker 2: up if a lot of the components are tariff do 311 00:16:24,760 --> 00:16:25,920 Speaker 2: you also have to think about the cost of the 312 00:16:25,920 --> 00:16:28,360 Speaker 2: competing technologies and how of those go up? Right? A 313 00:16:28,360 --> 00:16:32,280 Speaker 2: lot of power equipment is also even for traditionals manufactured internationally. 314 00:16:32,880 --> 00:16:35,320 Speaker 2: We also try to think through what are the opportunities 315 00:16:35,360 --> 00:16:38,000 Speaker 2: to lean in around that, and so I mentioned before, 316 00:16:38,080 --> 00:16:40,640 Speaker 2: we're invested in a number of companies focused on manufacturing 317 00:16:40,640 --> 00:16:45,360 Speaker 2: tech and manufacturing optimization and efficiency. If tariffs really come 318 00:16:45,360 --> 00:16:47,440 Speaker 2: into play, there's huge opportunities there because there might be 319 00:16:47,480 --> 00:16:51,200 Speaker 2: new shoring. Anybody that has manufacturing capacity needs to get 320 00:16:51,200 --> 00:16:52,680 Speaker 2: the most out of it, and so that's a big 321 00:16:52,680 --> 00:16:57,200 Speaker 2: opportunity set. There's huge opportunities in supply chain tracking, right 322 00:16:57,200 --> 00:16:59,840 Speaker 2: if all of a sudden, you need more options around 323 00:16:59,840 --> 00:17:02,400 Speaker 2: who who your suppliers are. You need to know where 324 00:17:02,400 --> 00:17:03,920 Speaker 2: things are coming from. You need to know where your 325 00:17:03,960 --> 00:17:07,080 Speaker 2: supplier supplier suppliers are coming from so that you know 326 00:17:07,280 --> 00:17:10,600 Speaker 2: if you're secure or not. Supply chain visibility becomes really important, 327 00:17:11,080 --> 00:17:13,520 Speaker 2: and there's just lots of interesting solutions around that that 328 00:17:13,560 --> 00:17:14,520 Speaker 2: we think are pretty exciting. 329 00:17:14,760 --> 00:17:17,040 Speaker 1: And we're talking on a day when you know, tariffs 330 00:17:17,080 --> 00:17:19,480 Speaker 1: and China went down from one hundred and forty five 331 00:17:19,520 --> 00:17:22,560 Speaker 1: percent to thirty percent. Just before I came in to 332 00:17:23,000 --> 00:17:27,200 Speaker 1: record the interview, there was a comment from the Treasury 333 00:17:27,240 --> 00:17:31,040 Speaker 1: Secretary Scott Bessen saying they could go lower, but ten 334 00:17:31,080 --> 00:17:33,720 Speaker 1: percent is the baseline, so they could go below thirty 335 00:17:33,760 --> 00:17:35,960 Speaker 1: percent and come down to ten percent. If you look 336 00:17:35,960 --> 00:17:38,720 Speaker 1: at tariffs and you said there's opportunity set that comes in, 337 00:17:39,000 --> 00:17:41,400 Speaker 1: is there a particular sector that you're holding back on 338 00:17:41,560 --> 00:17:44,440 Speaker 1: in investing given the uncertainty around tariffs right now? 339 00:17:45,119 --> 00:17:46,960 Speaker 2: I don't know if i'd say we're holding back on anything. 340 00:17:47,160 --> 00:17:50,120 Speaker 2: I think we're being thoughtful about how different tariffs might 341 00:17:50,160 --> 00:17:52,879 Speaker 2: impact different spaces in different ways. And so you know, 342 00:17:53,040 --> 00:17:56,320 Speaker 2: I touched on something like solar. If you look at 343 00:17:56,520 --> 00:17:59,119 Speaker 2: you know, storage and batteries as something with climate space 344 00:17:59,119 --> 00:18:01,080 Speaker 2: talks about a lot all of a sudden, a lot 345 00:18:01,119 --> 00:18:04,399 Speaker 2: of the batteries and components come from China, and so 346 00:18:05,040 --> 00:18:08,800 Speaker 2: what happens with where costs level out and is there 347 00:18:08,840 --> 00:18:10,960 Speaker 2: maybe a period of time where they go up a 348 00:18:11,000 --> 00:18:13,640 Speaker 2: little bit before they keep coming back down. It's all 349 00:18:13,640 --> 00:18:17,520 Speaker 2: about also looking at just supply chains, and our food 350 00:18:17,600 --> 00:18:20,960 Speaker 2: ecosystem is heavily globalized, and so you know, we actually 351 00:18:21,000 --> 00:18:23,399 Speaker 2: have an investment in a company that tracks food supply 352 00:18:23,480 --> 00:18:26,240 Speaker 2: chains and inventory levels and all of this really makes 353 00:18:26,280 --> 00:18:31,280 Speaker 2: inventory forecasting and monitoring, you know, even more important. There's 354 00:18:31,280 --> 00:18:33,360 Speaker 2: puts and takes here, but we try to make sure 355 00:18:33,400 --> 00:18:36,640 Speaker 2: we're being thoughtful about the risks and then being opportunistic 356 00:18:36,680 --> 00:18:38,520 Speaker 2: gog or where we see opportunities to lean in. 357 00:18:43,400 --> 00:18:45,520 Speaker 1: We'll be back with more of my conversation with Greg 358 00:18:45,600 --> 00:18:47,359 Speaker 1: Wasserman after the short break. 359 00:18:47,840 --> 00:18:48,879 Speaker 3: And Hey, if you're. 360 00:18:48,800 --> 00:18:51,240 Speaker 1: Enjoying this episode, please create and review the show on 361 00:18:51,280 --> 00:18:55,240 Speaker 1: Apple Podcasts and Spotify. Your feedback really matters and helps 362 00:18:55,320 --> 00:18:56,720 Speaker 1: new listeners discover the show. 363 00:18:56,920 --> 00:19:08,360 Speaker 3: Thank you. 364 00:19:08,400 --> 00:19:11,320 Speaker 1: Now, you mentioned a number of your companies and portfolio 365 00:19:11,359 --> 00:19:15,480 Speaker 1: companies are digital, They're focused on software solutions. How has 366 00:19:15,720 --> 00:19:18,720 Speaker 1: the development of AI changed your investment strategy. 367 00:19:19,280 --> 00:19:21,080 Speaker 2: It's obviously been the you know, the biggest trend that 368 00:19:21,080 --> 00:19:25,040 Speaker 2: everybody's talking about, and I think that it impacts everything 369 00:19:25,080 --> 00:19:28,040 Speaker 2: we're looking at on a ton of different levels. Right, 370 00:19:28,080 --> 00:19:33,840 Speaker 2: So there's obviously the physical build of AI, and you 371 00:19:33,840 --> 00:19:36,560 Speaker 2: know how that's affecting the energy space generally. And so 372 00:19:36,800 --> 00:19:39,040 Speaker 2: you know, there's been a huge explosion in data centers, 373 00:19:39,760 --> 00:19:41,840 Speaker 2: data center load growth. You know, if you look at 374 00:19:41,840 --> 00:19:44,000 Speaker 2: the US, we've had flat load growth for a while. 375 00:19:44,040 --> 00:19:46,359 Speaker 2: You know, it's back picking up a lot of the 376 00:19:46,400 --> 00:19:50,600 Speaker 2: projections talk about, you know, huge build for data centers 377 00:19:50,600 --> 00:19:52,639 Speaker 2: over the next decade. That translates to a lot of 378 00:19:52,640 --> 00:19:54,240 Speaker 2: load growth. We do think there's some noise in the 379 00:19:54,280 --> 00:19:57,320 Speaker 2: numbers because if you look at the pipeline of data 380 00:19:57,320 --> 00:20:00,320 Speaker 2: centers versus what actually gets built, it's it's I don't 381 00:20:00,320 --> 00:20:02,360 Speaker 2: know if it's a third or a quarter, but there's 382 00:20:02,400 --> 00:20:05,200 Speaker 2: a lot of duplication across the network. But the US 383 00:20:05,280 --> 00:20:07,399 Speaker 2: is in a position in the world where we just 384 00:20:07,440 --> 00:20:11,080 Speaker 2: we're back to load growth and so that creates a 385 00:20:11,119 --> 00:20:14,760 Speaker 2: ton of opportunity around new generation, right whereas that new 386 00:20:14,760 --> 00:20:17,280 Speaker 2: generation coming from solar and renewables that have been the 387 00:20:17,280 --> 00:20:20,240 Speaker 2: biggest source of new generation, and I think we'll continue 388 00:20:20,240 --> 00:20:24,200 Speaker 2: to be. So you'll see fossil plants that had meant 389 00:20:24,200 --> 00:20:27,520 Speaker 2: to be decommissioned coming back online or extending their life. 390 00:20:27,560 --> 00:20:30,280 Speaker 2: You know, you've seen nuclear plants that were mothballed signing 391 00:20:30,320 --> 00:20:32,280 Speaker 2: contracts to come back up. So I think there's just 392 00:20:32,320 --> 00:20:36,200 Speaker 2: a lot happening with energy generation. I also think there's 393 00:20:36,280 --> 00:20:38,919 Speaker 2: an ongoing huge opportunity in the grid and how you 394 00:20:38,920 --> 00:20:41,960 Speaker 2: make the grid more dynamic and the data center and 395 00:20:42,240 --> 00:20:44,760 Speaker 2: AI growth just just keep driving that. You don't always 396 00:20:44,800 --> 00:20:46,480 Speaker 2: have to have the grid size to meet demand. You 397 00:20:46,520 --> 00:20:48,840 Speaker 2: can flex demand and move things up or down. You 398 00:20:48,840 --> 00:20:52,320 Speaker 2: can shape shape the load profile with storage. You can 399 00:20:52,359 --> 00:20:55,840 Speaker 2: actually do smart things with data center loads and AI loads. 400 00:20:55,880 --> 00:20:58,879 Speaker 2: Some ALI eye loads are time sensitive, some are not, 401 00:21:00,080 --> 00:21:03,840 Speaker 2: so you know, orchestration software that determines, well, this is 402 00:21:03,920 --> 00:21:06,800 Speaker 2: this needs to run right now versus this can run 403 00:21:06,800 --> 00:21:09,400 Speaker 2: at three in the morning and just schedule things when 404 00:21:09,400 --> 00:21:12,200 Speaker 2: they make sense. That's sort of one window on AI, 405 00:21:13,200 --> 00:21:15,520 Speaker 2: you know. I think there's a second one around just 406 00:21:15,640 --> 00:21:19,880 Speaker 2: targeted use cases of applying AI to solving climate that 407 00:21:20,040 --> 00:21:23,760 Speaker 2: are that are really huge, in particular on I think 408 00:21:23,800 --> 00:21:26,719 Speaker 2: some of the things we're seeing on resilience just smarter 409 00:21:26,960 --> 00:21:31,600 Speaker 2: response to climate change and that are planning better response 410 00:21:31,640 --> 00:21:33,200 Speaker 2: in the moment. And I can give a lot of 411 00:21:33,240 --> 00:21:35,600 Speaker 2: opportunities around that, but there's just there's a lot happening. 412 00:21:35,880 --> 00:21:38,840 Speaker 1: Yeah, I can you give me examples of companies that 413 00:21:39,600 --> 00:21:43,399 Speaker 1: you find are using AI to try and deal with 414 00:21:43,480 --> 00:21:44,240 Speaker 1: climate change. 415 00:21:44,560 --> 00:21:47,320 Speaker 2: Yeah. If you think about the effects of climate change, 416 00:21:47,320 --> 00:21:50,639 Speaker 2: so extreme weather, some of that is longer term trends, 417 00:21:50,720 --> 00:21:53,440 Speaker 2: right just certain areas are going to be more prone 418 00:21:53,480 --> 00:21:58,280 Speaker 2: to occasional flooding over time, They'll be warmer over time. 419 00:21:58,880 --> 00:22:01,840 Speaker 2: Some of that's much more. There's a storm that's barreling 420 00:22:01,880 --> 00:22:03,520 Speaker 2: down on us right now, Like, what do we do, 421 00:22:04,200 --> 00:22:07,959 Speaker 2: and I think AI can play huge opportunities across all that, 422 00:22:08,000 --> 00:22:11,480 Speaker 2: in particular on the more acute side where something major 423 00:22:11,520 --> 00:22:15,800 Speaker 2: is happening and you need to get whatever data you 424 00:22:15,880 --> 00:22:19,239 Speaker 2: can to figure out what you think will happen and 425 00:22:19,280 --> 00:22:21,520 Speaker 2: then make a decision based on that. Right. And so 426 00:22:22,400 --> 00:22:25,400 Speaker 2: you know, if you are a town manager, somebody needs 427 00:22:25,440 --> 00:22:28,399 Speaker 2: to decide do we an issue in evacuation order or not? 428 00:22:29,119 --> 00:22:30,600 Speaker 2: You could decide that just a based on what the 429 00:22:30,600 --> 00:22:31,760 Speaker 2: storm is telling you, like is it going to hit 430 00:22:31,840 --> 00:22:34,480 Speaker 2: or not? Do we issue that? When do you issue that? 431 00:22:34,720 --> 00:22:37,239 Speaker 2: You might want to take traffic analysis into that, right, 432 00:22:37,280 --> 00:22:40,240 Speaker 2: depending on what time, how early or late you issue it, 433 00:22:40,280 --> 00:22:42,200 Speaker 2: traffic may be worse or better and give more people 434 00:22:42,200 --> 00:22:45,000 Speaker 2: time versus sitting in traffic jams. When you think about 435 00:22:45,080 --> 00:22:48,640 Speaker 2: in the moment, there's a wildfire happening, there's a storm happening, 436 00:22:49,200 --> 00:22:52,080 Speaker 2: people call nine to one one nine one call centers 437 00:22:52,080 --> 00:22:55,479 Speaker 2: get overloaded, People call their utility that there's power lines out, 438 00:22:55,520 --> 00:22:58,240 Speaker 2: and utility call centers get overloaded. And so if you 439 00:22:58,280 --> 00:23:02,040 Speaker 2: can have layers of AI that can help take those calls, 440 00:23:02,160 --> 00:23:06,560 Speaker 2: analyze those calls, pull in other situational data, right because 441 00:23:06,560 --> 00:23:08,800 Speaker 2: it's not just the person calling saying something's happening, but 442 00:23:09,359 --> 00:23:11,760 Speaker 2: you have news reports, you have data, you have cameras, 443 00:23:11,800 --> 00:23:14,280 Speaker 2: you have sensors. There's a ton of information. And so 444 00:23:14,320 --> 00:23:17,680 Speaker 2: if you can have smarter situational awareness that the nine 445 00:23:17,720 --> 00:23:20,240 Speaker 2: to one one responder or the firefighter on the ground 446 00:23:20,240 --> 00:23:23,240 Speaker 2: that's battling the fire, you can give them better information 447 00:23:23,320 --> 00:23:26,000 Speaker 2: to make smarter decisions on what to do. You can 448 00:23:26,080 --> 00:23:28,439 Speaker 2: just become more resilient, you know, especially in moments like 449 00:23:28,480 --> 00:23:33,320 Speaker 2: that where human emotion gets in the way of reasonable 450 00:23:33,400 --> 00:23:36,440 Speaker 2: judgment in times of stress, you know, which obviously is 451 00:23:36,680 --> 00:23:38,919 Speaker 2: critical and things like that. We even see things like 452 00:23:38,920 --> 00:23:41,159 Speaker 2: that on the corporate side, where you know, there's a 453 00:23:41,200 --> 00:23:44,320 Speaker 2: storm happening and you're an airline. Should you cancel the 454 00:23:44,320 --> 00:23:47,040 Speaker 2: flights or not? Should you reroute the planes or not? 455 00:23:47,760 --> 00:23:49,720 Speaker 2: You know, historically there's people that sit there that are 456 00:23:49,760 --> 00:23:52,480 Speaker 2: meteorologists inside the airlines that look at the data and 457 00:23:52,520 --> 00:23:55,160 Speaker 2: best guess. You can now have AI that can give 458 00:23:55,160 --> 00:23:57,320 Speaker 2: a smart recommendation, you know, here's what I would do. 459 00:23:57,760 --> 00:23:59,399 Speaker 2: You still have people make the decision on whether you 460 00:23:59,440 --> 00:24:01,320 Speaker 2: do that or not. But there's just so many interesting 461 00:24:01,400 --> 00:24:04,480 Speaker 2: layers of that across how you can build resilience. 462 00:24:04,840 --> 00:24:07,960 Speaker 1: Is that something that's already being implemented by companies or 463 00:24:08,000 --> 00:24:11,040 Speaker 1: are these just ideas that are coming across your table. 464 00:24:11,400 --> 00:24:15,320 Speaker 2: Yeah, we've seen you know, we've seen companies focused on 465 00:24:15,359 --> 00:24:17,800 Speaker 2: AI for nine to one call centers. We've seen companies 466 00:24:17,960 --> 00:24:22,280 Speaker 2: focused on AI for utility call centers. We've seen companies 467 00:24:22,359 --> 00:24:27,000 Speaker 2: that sell AI to use cameras to track look out 468 00:24:27,000 --> 00:24:29,480 Speaker 2: in fields and monitor for fires starting so you can 469 00:24:29,760 --> 00:24:31,640 Speaker 2: see there's maybe a little bit of smoke in that, 470 00:24:32,040 --> 00:24:33,800 Speaker 2: I think that might be a fire, and go put 471 00:24:33,800 --> 00:24:36,600 Speaker 2: that out before that happens. We're even seeing it used 472 00:24:36,640 --> 00:24:40,800 Speaker 2: in greenhouses where you can monitor how plants grow under 473 00:24:40,800 --> 00:24:45,600 Speaker 2: different circumstances and therefore, as weather changes, you actually know 474 00:24:45,680 --> 00:24:48,120 Speaker 2: how specific plants will respond to different types of heat 475 00:24:48,119 --> 00:24:51,160 Speaker 2: and water stress, and you can better tailor the nutrients 476 00:24:51,160 --> 00:24:53,520 Speaker 2: that go to them or other ways to manage that. 477 00:24:53,840 --> 00:24:55,720 Speaker 2: And then a lot of people don't think about this 478 00:24:55,840 --> 00:24:59,280 Speaker 2: necessarily as resilience angle, but insurance is a really big one. 479 00:24:59,440 --> 00:25:01,800 Speaker 2: You have theseynamics where people can't ensure their house in 480 00:25:01,840 --> 00:25:05,440 Speaker 2: California because of the wildfire risk, or insurers pulling out 481 00:25:05,440 --> 00:25:08,040 Speaker 2: of Florida because of the flood risk. And a lot 482 00:25:08,040 --> 00:25:12,879 Speaker 2: of that is just because it's hard to price specific 483 00:25:12,960 --> 00:25:14,920 Speaker 2: property risk and so they just look at the whole 484 00:25:14,920 --> 00:25:18,800 Speaker 2: area and reality is, you know, this house might be 485 00:25:18,880 --> 00:25:20,640 Speaker 2: very different than the house next door or the risk 486 00:25:20,720 --> 00:25:24,320 Speaker 2: depending on what mitigation efforts they have or not. Some 487 00:25:24,359 --> 00:25:26,760 Speaker 2: of this needs regulatory change because you can't necessarily price 488 00:25:26,880 --> 00:25:28,920 Speaker 2: insurance policies based on some of this, But I think 489 00:25:28,920 --> 00:25:31,440 Speaker 2: that's coming, and so just smarter insurance. It's part of 490 00:25:31,480 --> 00:25:33,840 Speaker 2: resilience because it's financial protection for you. 491 00:25:34,480 --> 00:25:38,960 Speaker 1: Beyond AI, Are there other areas of technology that excite 492 00:25:39,000 --> 00:25:40,280 Speaker 1: you most right now? 493 00:25:40,600 --> 00:25:43,680 Speaker 2: It's really broad across the board. We look at all 494 00:25:43,720 --> 00:25:45,920 Speaker 2: of the themes that we care about, and we spend 495 00:25:45,920 --> 00:25:48,879 Speaker 2: a lot of time thinking about enablers and just ways 496 00:25:48,920 --> 00:25:52,200 Speaker 2: that you can take what's already working and do it better, faster, 497 00:25:52,280 --> 00:25:56,200 Speaker 2: or cheaper. And so there's just tons of opportunities with that. Again, 498 00:25:56,240 --> 00:25:58,200 Speaker 2: it's you know, if you think about people building energy 499 00:25:58,200 --> 00:26:02,720 Speaker 2: transition projects. You mentioned the trillion dollar number before of 500 00:26:03,000 --> 00:26:04,679 Speaker 2: investment that's happened in the climate space. A lot of 501 00:26:04,680 --> 00:26:09,359 Speaker 2: that's infrastructure, right, people building major solar projects and you know, 502 00:26:09,440 --> 00:26:12,760 Speaker 2: utility scale solar battery storage projects and things like that 503 00:26:13,840 --> 00:26:17,600 Speaker 2: what's the data and tools and software platforms that just 504 00:26:17,680 --> 00:26:21,840 Speaker 2: make them invest betterfest or cheaper and manage the assets better. 505 00:26:21,840 --> 00:26:24,960 Speaker 2: And that's anything from data that goes into their modeling 506 00:26:25,080 --> 00:26:28,840 Speaker 2: on the projects, that goes into construction tech, it goes 507 00:26:28,880 --> 00:26:31,600 Speaker 2: into robotics to automate some of it all the way 508 00:26:31,600 --> 00:26:34,240 Speaker 2: through to you know, drones that can monitor plants once 509 00:26:34,240 --> 00:26:37,000 Speaker 2: they're built and make sure they're operating efficiently. And some 510 00:26:37,040 --> 00:26:40,680 Speaker 2: of the drones can even do repairs. So that's one 511 00:26:40,760 --> 00:26:45,400 Speaker 2: huge opportunity. And then we really look at broad themes 512 00:26:45,480 --> 00:26:50,000 Speaker 2: around labor challenges and how that translates to opportunities around 513 00:26:50,040 --> 00:26:53,720 Speaker 2: automation and robotics and where those intersect with climate benefits 514 00:26:53,760 --> 00:26:57,119 Speaker 2: just because a lot of times automated solutions are more 515 00:26:57,160 --> 00:27:00,000 Speaker 2: efficient than humans. That could be on the agriculture side, 516 00:27:00,040 --> 00:27:02,919 Speaker 2: that could be in the industrial side, and just smarter 517 00:27:03,000 --> 00:27:05,520 Speaker 2: supply chains. I touched on that a bit before, but 518 00:27:06,160 --> 00:27:09,160 Speaker 2: we're seeing tons of opportunity with food supply chain, industrial 519 00:27:09,200 --> 00:27:12,520 Speaker 2: supply chain that we have to look for the climate angle. 520 00:27:12,560 --> 00:27:15,080 Speaker 2: So a lot of that's around reduced waste and more 521 00:27:15,160 --> 00:27:18,240 Speaker 2: just in time, but all that translates to the current 522 00:27:18,320 --> 00:27:21,840 Speaker 2: environment of navigating shocks, which could be climate shops, but 523 00:27:21,840 --> 00:27:23,320 Speaker 2: it could also be Tarwerff stocks. 524 00:27:23,560 --> 00:27:26,320 Speaker 1: At Bloombercgreen, We've launched a series this year that looks 525 00:27:26,359 --> 00:27:31,280 Speaker 1: at the bottlenecks that are holding back electrification of the economy. Now, 526 00:27:31,400 --> 00:27:34,720 Speaker 1: things that are beyond the obvious stuff, so not permitting 527 00:27:34,720 --> 00:27:38,960 Speaker 1: reform or high interest rates, which are issues that slow 528 00:27:39,040 --> 00:27:43,080 Speaker 1: down electrification, but they're less obvious stuff. So the first 529 00:27:43,080 --> 00:27:46,280 Speaker 1: story was looking at the shortage of transformers. We've got 530 00:27:46,280 --> 00:27:49,480 Speaker 1: a few future stories coming up. But from your perspective, 531 00:27:49,480 --> 00:27:53,320 Speaker 1: what kind of unusual bottlenecks to electrification are you seeing. 532 00:27:53,560 --> 00:27:56,720 Speaker 2: I mentioned one of our companies before Span that sells 533 00:27:56,760 --> 00:28:01,400 Speaker 2: a software enabled circuit breaker panel. A huge, huge, unappreciated 534 00:28:01,440 --> 00:28:05,840 Speaker 2: bottleneck for electrification is when you take your house and 535 00:28:05,920 --> 00:28:09,639 Speaker 2: you start adding an EV Chargerdn't You didn't power your 536 00:28:09,640 --> 00:28:11,159 Speaker 2: car from your house before you do? Now because you 537 00:28:11,160 --> 00:28:13,840 Speaker 2: had any V charger. You add a heat pump instead 538 00:28:13,840 --> 00:28:16,399 Speaker 2: of a gas furnace, and so that's now electric powered 539 00:28:16,480 --> 00:28:19,119 Speaker 2: versus gas powered. You do the same thing on the 540 00:28:19,160 --> 00:28:20,960 Speaker 2: hot water side, you get an electric hot water heater 541 00:28:21,000 --> 00:28:23,639 Speaker 2: instead of a gas hot water heater. People are doing 542 00:28:23,680 --> 00:28:26,480 Speaker 2: the induction stoves all that stuff's great for electrification, and 543 00:28:26,520 --> 00:28:29,320 Speaker 2: these are great technologies that are better user experience. They 544 00:28:29,359 --> 00:28:32,560 Speaker 2: all use more electricity than the thing they're replacing, and 545 00:28:32,640 --> 00:28:34,720 Speaker 2: so all of a sudden, the power supply into your 546 00:28:34,760 --> 00:28:37,760 Speaker 2: house is a choke hold. And so one way to 547 00:28:37,760 --> 00:28:39,680 Speaker 2: solve that is get more power into your house. So 548 00:28:39,800 --> 00:28:42,440 Speaker 2: grip up the yard and add a second panel and 549 00:28:42,480 --> 00:28:45,080 Speaker 2: have the utility run more lines. The others just be 550 00:28:45,160 --> 00:28:47,080 Speaker 2: smart about when things are running in your house and 551 00:28:47,120 --> 00:28:50,040 Speaker 2: better utilize the power in that you currently have. And 552 00:28:50,120 --> 00:28:53,240 Speaker 2: so our portfolio company SPAN is really focused on that. 553 00:28:53,680 --> 00:28:56,760 Speaker 2: So I think that's a huge one around just avoiding 554 00:28:56,760 --> 00:29:00,400 Speaker 2: the need to build more transformers and substations and capacity 555 00:29:00,440 --> 00:29:03,200 Speaker 2: and grid build out. Just better utilize what you have. 556 00:29:03,760 --> 00:29:06,600 Speaker 2: There's even random stuff like there's been a well published 557 00:29:06,640 --> 00:29:09,920 Speaker 2: Loze shortage of electricians. Google just the other day actually 558 00:29:09,920 --> 00:29:13,160 Speaker 2: announced they were going to start training electricians. But we've 559 00:29:13,200 --> 00:29:16,320 Speaker 2: seen platforms that come up that are focused on software 560 00:29:16,360 --> 00:29:21,000 Speaker 2: for training electricians. We've even seen some interesting Jenai platforms 561 00:29:21,040 --> 00:29:25,080 Speaker 2: popping up around. If you think about electricians work, some 562 00:29:25,240 --> 00:29:28,120 Speaker 2: of it's designing the system, some of it's installing the system. 563 00:29:28,840 --> 00:29:31,600 Speaker 2: If there's a shortage out there of people, and you say, well, 564 00:29:31,600 --> 00:29:34,200 Speaker 2: can Jenai do a better job of designing the system 565 00:29:34,360 --> 00:29:37,600 Speaker 2: automatically and therefore the electrician can spend more time actually 566 00:29:37,600 --> 00:29:39,960 Speaker 2: installing it. You can solve some of the bottleneck that way. 567 00:29:40,000 --> 00:29:42,040 Speaker 2: And so we see a lot of interesting things like 568 00:29:42,080 --> 00:29:44,800 Speaker 2: that that we think are quite exciting in early days 569 00:29:44,840 --> 00:29:47,480 Speaker 2: of just getting to market, but are pretty disruptive. 570 00:29:47,880 --> 00:29:50,400 Speaker 1: Well, you almost guessed the second story that's not yet 571 00:29:50,440 --> 00:29:52,360 Speaker 1: been published, but that's going to look at the shortage 572 00:29:52,360 --> 00:29:55,640 Speaker 1: of skilled workers. So it's a real shortage that I've 573 00:29:55,640 --> 00:29:58,200 Speaker 1: heard so many people in the industry talk about. Now 574 00:29:58,320 --> 00:30:01,520 Speaker 1: another thing that sort of I would say among left 575 00:30:01,520 --> 00:30:05,520 Speaker 1: and right and in agreement, that there's perhaps regulation that 576 00:30:05,600 --> 00:30:08,600 Speaker 1: is coming in the way of helping the energy transition 577 00:30:08,760 --> 00:30:12,400 Speaker 1: in some places or helping electrification in other places. If 578 00:30:12,400 --> 00:30:14,800 Speaker 1: you add the power to get rid of one legislation 579 00:30:14,840 --> 00:30:16,440 Speaker 1: and add another one, what would you do? 580 00:30:17,240 --> 00:30:19,800 Speaker 2: The one that I would get rid of would be 581 00:30:19,960 --> 00:30:24,840 Speaker 2: permitting restrictions. It takes so long to build things. Transmission 582 00:30:24,840 --> 00:30:26,680 Speaker 2: is something we think about a lot. It takes forever 583 00:30:26,720 --> 00:30:29,080 Speaker 2: to build transmission, but even just anything, right, you know, 584 00:30:29,240 --> 00:30:32,680 Speaker 2: we were talking about electrification before, you know, somebody wants 585 00:30:32,720 --> 00:30:34,640 Speaker 2: to upgrade their house. It might take months and months 586 00:30:34,640 --> 00:30:36,240 Speaker 2: to get the permits. It might take six months to 587 00:30:36,240 --> 00:30:38,240 Speaker 2: get a you know, permit to install any V charger 588 00:30:38,280 --> 00:30:42,400 Speaker 2: if you need one. And so I think that reducing 589 00:30:42,560 --> 00:30:44,760 Speaker 2: you know, red tape around permitting, I think would be 590 00:30:44,800 --> 00:30:46,840 Speaker 2: a really big one. And so that's that's probably what 591 00:30:46,880 --> 00:30:50,480 Speaker 2: I would look to reduce. I'm definitely not one for 592 00:30:50,880 --> 00:30:56,040 Speaker 2: adding regulation generally, but if I were, I would probably 593 00:30:56,120 --> 00:31:00,440 Speaker 2: say that any construction decisions need to take into account 594 00:31:01,120 --> 00:31:05,920 Speaker 2: the future of where you're building and making sure that 595 00:31:05,960 --> 00:31:08,240 Speaker 2: it's resilient for what the future looks like. Now. That 596 00:31:08,440 --> 00:31:11,120 Speaker 2: obviously can get quite complicated. But you know, you might 597 00:31:11,120 --> 00:31:15,200 Speaker 2: be putting a house somewhere today that is fine, But 598 00:31:15,320 --> 00:31:17,520 Speaker 2: in fifty years all the data says that that might 599 00:31:17,520 --> 00:31:19,880 Speaker 2: be it might be flooded. And so instead of in 600 00:31:20,000 --> 00:31:22,040 Speaker 2: forty years from now you're starting to see floods and 601 00:31:22,080 --> 00:31:25,680 Speaker 2: you have to go install some our medial solutions, why 602 00:31:25,760 --> 00:31:28,160 Speaker 2: not take into account just requirements that things should be 603 00:31:28,200 --> 00:31:31,520 Speaker 2: resilient today. Things should be electric ready today. That's probably 604 00:31:31,520 --> 00:31:34,080 Speaker 2: another big one. Just building should be electric ready because 605 00:31:34,080 --> 00:31:37,760 Speaker 2: it's it's disruptive to try to build that earlier, and 606 00:31:37,800 --> 00:31:39,560 Speaker 2: so if I were to add a regulation, it would 607 00:31:39,560 --> 00:31:44,120 Speaker 2: probably be around electric ready and resilient ready. Thank you, Greg, 608 00:31:44,480 --> 00:31:46,520 Speaker 2: Thank you great to be here. Really enjoyed the discussion. 609 00:31:49,440 --> 00:31:51,760 Speaker 1: Thank you for listening to zero. And now for the 610 00:31:51,840 --> 00:32:01,400 Speaker 1: sound of the week, as the sound of an anchor 611 00:32:01,520 --> 00:32:04,800 Speaker 1: dropping from a container ship. Shipping traffic from China to 612 00:32:04,840 --> 00:32:08,000 Speaker 1: the US has dropped massively over the last month, meaning 613 00:32:08,040 --> 00:32:10,360 Speaker 1: a lot more ships are spending a lot more time 614 00:32:10,560 --> 00:32:11,400 Speaker 1: at anchor. 615 00:32:12,400 --> 00:32:13,000 Speaker 2: If you like this. 616 00:32:12,960 --> 00:32:15,040 Speaker 1: Episode, please take a moment to rate and review the 617 00:32:15,080 --> 00:32:18,720 Speaker 1: show on Apple Podcasts or Spotify. Share this episode with 618 00:32:18,760 --> 00:32:21,440 Speaker 1: a friend or with someone who can make sense of 619 00:32:21,560 --> 00:32:25,240 Speaker 1: one trillion dollars. This episode was produced by Oscar Boyd 620 00:32:25,480 --> 00:32:27,960 Speaker 1: Mnoomberg's head of podcast is Sage Bowman and head of 621 00:32:28,000 --> 00:32:31,040 Speaker 1: Talk is Brendan newnam Our. Theme music is composed by 622 00:32:31,080 --> 00:32:35,719 Speaker 1: Wonderly Special. Thanks to Jessica bec Samarsadi Moses Andim and 623 00:32:35,800 --> 00:32:40,000 Speaker 1: Amanda Colson Hurley. I'm Markshatrati back soon.