Resources

• Ceres Accelerator for Sustainable Capital Markets
  • Reports and resources on the Accelerator’s work on Board Oversight of ESG and Responsible Policy Engagement
  • Accelerator’s work on corporate climate lobbying: Practicing Responsible Policy Engagement
• Ceres Company Network
• SEC press release on proposed rule for climate disclosure
• Task Force on Climate-related Financial Disclosures
• Previous Climate Rising episode featuring Ceres’ CEO, Mindy Lubber: Working with Investors and Companies to Address Climate Change

Guests

Climate Rising Host: Professor Mike Toffel, Faculty Chair, Business & Environment Initiative

Guest: Steven Rothstein, Managing Director, Ceres Accelerator for Sustainable Capital Markets

Transcript

Editor’s Note: The following was prepared by a machine algorithm, and may not perfectly reflect the audio file of the interview.

Mike Toffel:
Steven, thanks so much for joining us on Climate Rising. I wonder if we can start with an introduction. Can you describe your role at Ceres?

Steven Rothstein:
Sure. Thank you for the work that you're doing. I've listened to several of the podcasts and you have so many great topics. So thanks for your great work. I am the Managing Director of what's called The Ceres Accelerator for Sustainable Capital Markets. The Accelerator was started a few years ago to focus on the financial systems and corporate governance.

Mike Toffel:
Great. Can you describe what Ceres is as an organization? What does it do?

Steven Rothstein:
Sure. Ceres is a nonprofit started in the late 80s, and it started after the Exxon oil Valdez spill where investors got together and said that they really need to understand more about the environmental policies of companies, not just because it's good for the environment because from a fiduciary perspective. So in Exxon, if they had spent a little more money on a double hull tanker, they would've prevented enormous cost and enormous climate tragedy. That has grown so that today we have an investor network that collectively represent $60 trillion of assets under management, big firms and small firms. They're using their voice to move the world to a more sustainable world. So we work with investors, we work with some of the largest Fortune 500 companies. We work on policy issues, both in Capitol Hill, in various state capitals, and around the world on policy issues. And then through the Accelerator, with the finance sector and with corporate governance. We're now about 200 people based in Boston, but operating all over.

Mike Toffel:
And when did Ceres launch its Accelerator for Sustainable Capital Markets?

Steven Rothstein:
The Accelerator was launched in late 2019 by a decision of the board. I was hired in January, of 2020 And it started with two of us, and today we have about almost two dozen people. And I'll say for any listeners, the Accelerator and Ceres overall is hiring lots of people right now. So if folks are interested, take a look at the website. And if you think your skills are appropriate with our openings, please submit an application.

Mike Toffel:
All right, listeners, hopefully some of them will take you up on that. So let's talk about what the mission is of the Accelerator. So what's its theory of change? How is it deciding to plug in?

Steven Rothstein:
So most of what Ceres does, does amazing work with individual investors, big investors, BlackRock, State Street, Vanguard, small investors, individual companies, and others. The Accelerator focus on system change. So we're trying to change the banking system, the accounting system, the insurance system, the financial systems. And we do that through voluntary work with banks, insurance and others, and through regulatory. There's SEC and state banking commissioners and others. And then with corporate boards of directors. To change companies, the theory of change is you need to make, we're not talking about incremental changes, we're talking about big changes to have sustainability. Big changes have to be made at the board level. And so we want to make sure we have the right people on the board, they're trained, they're involved, they compensate their senior people, thinking about climate and other ESG issues. And so we do a lot on both finance and on corporate governance on system change levels.

Mike Toffel:
So this is a bit different from what Ceres has done historically, which has worked with the finance community to help pressure or inform companies, and really there, often the target was management. And here you're saying, let's go directly to the board.

Steven Rothstein:
it's not at odds with what Ceres is doing, but it's an addition. Basically in 2019, the Ceres board and senior management got together and say, all the things we're doing are great in making impact, but it's not enough. It's not fast enough. The world is in a crisis last year, the country, there was a $145 billion of cost because of climate change. We had 20 disasters that were over a billion dollars and the first six months of this year we're on track to unfortunately beat that record. We are, as our secretary of state has said, running out of climate records to break, because we keep getting hotter or more floods or more fires or more tornadoes.

Mike Toffel:
So engaging with boards, what does Ceres actually do? What are the touchpoints that it tries to make with its board engagement work?

Steven Rothstein:
Yeah, so it varies. So first there's a, if you think about a funnel, at the top of the funnel there is a broad number of people we connect with, but it's less engaged. Meaning we write articles, we speak at conferences, we will do those kinds of things to raise a topic. Then if you go down the funnel more engagement is we have an online course with Berkeley Law School for boards of directors. And if any of you are either directors or advise boards of directors, again, it's an online course. The next one starts in September. It's a 101 for boards of directors on climate and ESG issues, six hours roughly, and was a certificate program through Berkeley and Ceres. And then we do individual engagements. Meet with boards. I've done several presentations before boards where they're at a critical juncture and trying to move them faster. So both learning individual articles, reports, speeches, conferences, the course, and then individual engagements.

Mike Toffel:
Okay. Let's talk about each of them and go into a little more detail to get some examples. So in the first area, what you're talking about, presentations and articles, sort of a thought leadership bucket of activities, what are some of the messages coming out of your group that you're trying to promote?

Steven Rothstein:
Yeah. So first at a high level, boards need to be thinking about these issues, climate, sustainability, ESG. And so it is not enough to say, oh, I have somebody on our staff going to deal with these. Just like if you think about what are the... If the board said, should the board think about recession? Should they think about the impacts of pandemic? Should they think about other strategic issues? Should they think about if they're operating in Russia, should they stay in Russia? Of course, those are board, again, not only board, but they should think about that.

So first is all boards should be involved. So, that affects how the committees are set up. It affects how they're trained. It affects how they recruit new board members. It affects how they compensate. So as an example, we just completed a series of three articles on compensation for executive management, with the overall messages for most companies, not everyone, but for most companies, we believe as part of a bonus plan climate or ESG issues should be factored in. And we have a lot of case studies and examples of how those should.

Mike Toffel:
So executive compensation factoring in how they're addressing climate change, maybe the extent to which they're setting targets and achieving those targets. Is that what we're talking about?

Steven Rothstein:
Exactly. There's an expression that, what gets measured gets managed. So if you're a CEO or a senior leader, and if you, I'm just making up, if 5% of your bonus or 15% of your bonus is based on hitting your climate commitment, you'll be focused on it a little more than if 0% is. And again, assuming everyone's of good faith, but everyone's busy and there's a lot of, it's hard to manage a company. So we think this should be built in because the board is saying to the manager, this is one of our priorities. And in some companies, it should be very specific to a reduced water goal, or reduced greenhouse gas emissions. In some, it should be much broader on ESG issues of diversity or other areas.

Mike Toffel:
Other articles that have come out of your group have focused on policy engagement and lobbying. Can you tell us a little bit about that?

Steven Rothstein:
Absolutely. So we did a report last year and we're doing an update for this September called responsible policy engagement. And if you go to Ceres.org, I think it's backslash either responsible policy engagement or practicing RPE. The basic idea is that if you're a company that says it was going to be a climate leader, and your actions are focused on that, but your lobbying is not, you're not really a climate leader. we did an analysis of the top hundred companies, the S&P 100. And we found, unfortunately, that most of them on climate, their lobbying is misaligned, meaning they say they're promoting certain things and working hard to reduce emissions or water use or things like that. But when they look at their lobbying dollars, they give money to the US Chamber or other trade groups, or they sign onto letters that are just the opposite.

So we believe fundamentally that the lobbying has to be aligned with your efforts. And we believe every board, for example, should ask for a lobbying assessment from your senior managers, what are we lobbying for? And is it aligned with our overall policies? That's an example of what we think the board should be doing.

Mike Toffel:
Now are boards traditionally engaged in lobbying on any topic?

Steven Rothstein:
Well, first is, we're not saying the board members themselves should be the lobbyists, but they should just ask just as they would ask the question of the management, how are we doing on an expansion plan or a merger or finance or on HR or a lot of other issues. We believe that they should be asking that, and this is happening more and more. If you look at, in 700 companies have decided to leave Russia over the Ukraine. And in most cases that has hurt them financially, they're doing it because of the moral issues, they're doing it because of the customer relations issues. They're doing it for a variety of other reasons. That's a board decision.

more recently, some companies are deciding whether to offer additional benefits for women to travel out-of-state for abortion. So there are a variety of topics. I'm not telling boards what they should say on these issues, but they should at least be sure that they're, go to their senior management and that their policies are aligned with what they're saying. If not, they're not being good stewards of their strategic plan.

Mike Toffel:
I see. So it's using climate as an example of one of several things that should trigger board concern about policy engagement. Is that right?

Steven Rothstein:
Exactly. Exactly. And what their plan is, is a company by company decision. I hope overall, our world needs to reduce our emissions by 50% by 2030, but for every company, that number will be a little different, water usage and other areas too.

Mike Toffel:
Okay, great. So we've talked about executive compensation, responsible policy engagement and this misalignment you've identified, that's all in the thought leadership bucket. Let's talk about this online course you mentioned, the six hours covering board engagement on ESG and climate. So maybe we'd start with the ESG portion. What are the topics that you're trying to teach board members through this course on ESG, and then we'll talk about climate.

Steven Rothstein:
Yeah. So on the course, the first question is the one I alluded to before is that this is a board responsibility and giving them examples, what we found what's very effective for boards is to have case studies of other boards. So we have either speakers who are prerecorded, or we have articles or information about what other boards have done to address this. And this is an issue, not just because boards should do it because what they believe, but it's what their owners, their investors are asking for. So this year in the AGM, the shareholder season that just ended, there were more climate and ESG resolutions than ever before. Now, many of those got resolved, which is good because companies and investors work that out. but there were also times when, if it doesn't work out, that there are shareholder resolutions to eject to vote a director out, or there are more resolutions this year about not keeping their auditor, because the auditor wasn't appropriately recognizing these concerns.

Again, the board hires the audit firm and the audit firm supposed to be independent. And what we've found in reports that we've done and other folks have done is that the auditors are really, as a general rule, not saying everyone, every company, are not focusing on climate risk, and the boards are starting to focus on that. So it is important for the boards to understand it because it's important for their own work. It's important for their strategic advantage with companies. And it's important, because investors are asking for it, young people want to work in a place that reflects their values. And so we're all in this world today, recruiting hard for the next employees because of the marketplace. And so, one of the other competitive advantage reasons to do this is to recruit more employees, more money is moving into sustainable investment. So it's good for investors, but it's important for the boards to understand all these dynamics so they can then make decisions that are important to them.

Mike Toffel:
So both the thought leadership and this course and your whole focus on boards, it's going back a little bit to earlier in our conversation, is predicated in the idea that managers, senior managers of companies, are not quite getting it. And that there's a gap between what managers should be doing in Ceres' view and what they are doing. And that to fill that gap, you're trying to go through boards to try and put pressure and educate their own senior managers. So what do you attribute this gap to? Again, you're focusing on boards, which indirectly control companies because they hire not only auditors, but of course the CEOs as well and they determine CEO tenure. And there's this gap and you're saying while the rest of Ceres is maybe targeting management, we're going to target the board.

Steven Rothstein:
Yeah. Well, I think there's three things. First is the change that we need is dramatic and quick, we are in a crisis. and we're talking about big changes. I'll give you an example, the automobile industry to say that they're only going to build electric vehicles after 2035, that's hundreds of billions of dollars of investment. It changes every employee's responsibility, union contracts, where they get their supply chain. It dramatically changes customer needs and et cetera. That's not just a management decision, that's a board level. So part of it is these are, we're in a race because of the climate crisis. Second thing is these are big, complicated issues. Third there are many cases where managers are great leaders and their boards slow things down and it takes them a while to convince the boards. And so we want the boards to be active partners in this area.

Fundamentally it changes the idea from shareholder capitalism to stakeholder capitalism. So, that shareholders are important, they've always been important, but they're not the only important area and that the other stakeholders are important as well. And the boards can sometimes understand that. And the boards, the other thing is the average CEO for Fortune 500 company stays, I think it's 4.6 years. So if you're talking about a five year plan or a 10 year plan, it's going to outlast that CEO on average. And so the board has to have a clear direction of, they want to reduce their emissions, they want to reduce their water while they're growing their revenue. These are not an either or, and they have to set those broad clear directions just as 1961, president Kennedy set a broad goal of sending a man to the moon. And that didn't mean that folks at NASA weren't doing a good job, but we needed a broad vision to direct it.

Mike Toffel:
So the fact that the boards outlast the CEOs is another justification for why to focus on boards for these 10 year, 15 year, 20 year targets. It's perhaps you're just aligning the timeframe with the tenure of individuals. How long do board members tend to be board members?

Steven Rothstein:
Well, it varies. I don't have a statistic on this, but most companies have board rotations. So, it's often, say, a three year term, but it varies all over the place, and people can stay on for two or three terms. So maybe they're on for six years, maybe they're on for nine years, again, some shorter, some longer. So on average, and you don't look at the board, we don't look at an individual board member, we look at the board overall. So the board today in five years from now, most of the board members will still be there, 10 years from now there'll still be some. And if they, again, have a strategic direction, this is not instead of management, clearly management's going to make the day to day decisions. They're going to drive this, but they're getting their big picture direction from the board. And if the board is just to be overly simplistic saying, yes, make climate a priority in everything you're doing, or reduce climate as a priority in everything you're doing, that will affect what the CEO does.

Mike Toffel:
Yeah. How much of this is working with boards to put longer term orientation on CEOs, sort of as we've been implying versus maybe CEOs want to do a lot, but their boards are constraining them. And so you're actually providing air cover for CEOs who want to actually act more aggressively on climate. How much of each of these scenarios are you seeing?

Steven Rothstein:
We're seeing all of the above. I went to a Fortune 50 company and presented two or three months ago where the CEO wanted to move faster. And in this case it was a he, wanted me to present to his board to try to build alliances, to get them to support some specific decisions that he had. So, that absolutely is part of this.

Mike Toffel:
Interesting. What's the posture on board structure? So are you advocating that there should be a committee on climate, a subcommittee on climate or on ESG, or do you think climate should be a committee of the whole issue? What advice are you giving on structure?

Steven Rothstein:
So President Biden has said climate affects an all of government issue. So it's not one agency, it's all of government. We think the same in a company. So that first is, we don't think there should be one climate expert on the board, everyone should have a certain level of information there could be expertise in different areas, but everyone. And there should be built into every committee. So, if you're on a capital planning committee, it affects what you make on capital planning decisions. If you're on a human resource, if you're in the audit committee, if you're in a finance committee, all of these committees should be asking climate, water, sustainability, other ESG issues.

Now for some companies, they also want to have a specific committee to bring more attention. We're not opposed to that in certain cases, but we don't think this should be delegated to a person or a committee and other people feel, oh, it's not my job. I can go make my capital decisions and not worry about climate, because those climate people they'll take care of it for me. That's not going to solve the issues we're in.

Mike Toffel:
And where do you think the state of the market is on this? So, you mentioned earlier the S&P 100 or the S&P 500, what's the scope of the market of boards that your Accelerator is targeting? Is it these large boards of S&P 500? Is it beyond that? Is it US focused? Is it global?

Steven Rothstein:
So we work with international partners, but our focus more directly is US. And we tend to focus more on the, say the Russell 3000, the largest boards, but not just the top 500, a lot in the 500. So 10 years ago, this was really a niche issue. There were a few boards of the Ben and Jerry type of company that were focusing on this. Now it's much more mainstream, most Fortune 500 companies, this is on their agenda for their board at some point, but it's not built in terms of their recruitment and other committees. we've moved a lot on the voluntary basis to give you a context, 90% of Fortune 500 companies file some kind of climate report, that's the good news, 20 years ago it was, again, a handful. The bad news is, it's different languages, different forms, different acronyms. So it's hard to compare them.

Mike Toffel:
So Steven, there's a proposed SEC climate disclosure rule. Can you tell our listeners what that's about and how that might change the role of boards on climate change?

Steven Rothstein:
Sure. Just to put it in perspective, the Securities and Exchange Commission was established 88 years ago to ensure there's disclosure. The idea of our economic system is that we will have a country that has a great capital market, that's easy to raise money, whether it be for a company that's growing, an IPO or anything else. But on the other side, that there'll be a lot of information. There's good disclosure. That's what investors and that's led to a very robust market over these decades since after the depression. Well, the area that's failed is in climate disclosure, that there hasn't been. So the SEC has proposed a comprehensive set of climate disclosures for all publicly traded companies. They've solicited comments, Ceres, and many other people, submitted comments. In fact, I think it's over 14,000 comments that have been submitted.

The SEC is currently evaluating those comments now. One of the many components of that is a responsibility for the board. So there are, without going through all the details that if the draft rule is finalized that all publicly traded companies, all that file with the SEC will have to submit information about how their board thinks about these issues in terms of climate, what kind of committees they have, what kind of reports they get from their board? Do they include executive compensation, ESG, or climate issues? So it'll get people to think about these issues in a deeper way, like anything else when you have to file something with a federal government, whether it be the IRS or the SEC, it tends to raise the attention more. And so we think this is a very positive step, and we hope that the SEC move forward with this and many other provisions of their important climate disclosure rule.

Mike Toffel:
Where did this come from? Did this come from investors encouraging the administration to propose such a rule, or did this come from NGOs or consumers?

Steven Rothstein:
No, this is not a climate issue. This is an investor issue. So a year and a half ago, the acting chair of the SEC issued a request for comments saying to people, we would like to get your opinion on this. Should we issue a rule on climate? And they got hundreds and hundreds of comments. Of the investors that submitted, 70% of them wanted climate disclosure using something called TCFD, the Task Force for Climate Related Disclosure. That includes a provision for governance. So this is an investor driven process. This is not a climate disclosure, it does disclose climate issues, but this is a financial risk issue that the investors see.

Mike Toffel:
So this new regulation may be a great stimulus of demand for your training programs and for the reading of your documents.

Steven Rothstein:
We think it will be and more fundamentally, it'll be a great stimulus what the boards need to do. So that there is not a board I'll bet, I don't know this statistically, but I'll bet that hasn't talked about the pandemic several times and how it's affected their business, their employees, their workplace, their supply chain, many, many other things, not just those in the pharmaceutical business, in every business. So it's part of now they're asking about. We want that every board needs to address climate risk.

Put it in context, we did a separate study on banks, insurance and others. We believe there is more risk in the balance sheets today of financial institutions, climate risk, than there was in 2008 from subprime housing. And look at what happened to them. So every company needs to look at how is it affecting them? Are they in a floodplain? Are they in areas where they'll be fires? Are they in an area where their industry's going to go out of business or something like that? And to address these issues, the answers are unique to the company, but if the company's not looking at it, there's no company that the ostrich approach has ever worked for them well.

Mike Toffel:
Of the Russell 3000, which is roughly one way to think about your target market for these services, how many of them would you estimate, just ballpark, get it and have the right training and are ready to address these issues in a comprehensive, appropriate way?

Steven Rothstein:
This is a journey, not a destination, meaning there are many places along that spectrum. a vast majority are doing some steps along the way, and they've taken some steps. We're still at a relatively small percentage that I think are focusing on it the way that we think they should in terms of the depth. But, again, five years ago, 10 years ago, both percentages would've been a lot smaller. So the market is moving in a constructive way. We are trying to help move it. Lots of other people we work with, other universities and with NGOs and corporations, the single biggest driver, aside from the climate and what we see in the news every day, is investors. two years ago, there were no investors or owners who had said they want their portfolio to be net zero or in the coming years, today it's over $60 trillion. investors are going to the companies they own and say, what are you doing about this?

And when you're not, Ceres goes to you, when your owner or your shareholder comes to you and says, what are you doing? It does tend to focus the management and the board. So there is dramatic change. We're seeing great progress, but we're not fast enough. Unfortunately mother nature doesn't really care how fast we've gone, the numbers of floods and fires and tornadoes and risks. Out West, we have a drought that we haven't seen in 1200 years.

Mike Toffel:
Yeah. Yeah. Listen, those records are continuing to be broken, as you mentioned earlier. So if there's members of boards who are listening to this program, what would be a heuristic for them to go through to figure out whether their board is well equipped to handle climate change. So do you have a few questions that you tend to ask individuals to say, have you thought about this, or do you do these practices? What sort of a heuristic that they might go through to figure this out?

Steven Rothstein:
Yes, we do. And we have a lot of stuff. It's all free on our website they can take a look at, but at a high level, first is, is this something built into the fabric of the board that the climate and broader ESG issues, meaning, do they get reports at board meetings? Is it built into committees? Do managers in their monthly or quarterly or whatever reports they give? Is it something always built in or just if there's an emergency? So is it built into the fabric? Do they have people on the board who are knowledgeable either because of previous experiences they've gone through some training or there's lots of ways to get this, or a lot of NGOs that do this, or universities or other things. So are they getting themselves, again, more educated on these? Do they have honest conversations?

There's an expression that people like progress, they just don't like change. And when you're in the middle of it, it's hard to know if it's progress or change. Some of these changes are really hard to have the company grow financially yet make dramatic changes in its supply chain, in its output, in its greenhouse gas emissions and its water use. These are not easy. So they have to be willing to look at these, or if they're dealing with diversity issues, again, to be comfortable with uncomfortable conversations. And then the last is, are they measuring it? So they get, again, quarterly, monthly, whatever the reports they get. So, they're seeing progress or when there's not progress. And then are senior manager is compensated and just included in their compensation. Those are some very basic, and there's a lot of elements underneath each one.

Mike Toffel:
That's interesting. I think that would be a helpful guide to get a sense of where is my board on this journey. What are some missteps that boards take? So a lot of what we've been talking about has been making sure they're aware of the risks that they face and that they're gaining information about that. And so that's a lot of maybe overcoming errors of omission, like the failure to ask the right questions. Are there missteps that boards have taken either by acting too aggressively, or focusing too narrowly, or failing to focus that you've observed?

Steven Rothstein:
Sure. First is, assume what is going to happen is what's happened. And whether you look at the war in Ukraine or the pandemic, or the number of floods or fires or tornadoes, we're in an uncertain time. And so you can't assume, oh, we survived the last three floods in our manufacturing facility, whatever it is. So don't assume what happened will happen at the same level because of all the records being broken. Second is that this is a, some say, oh, this is a fad. This will come and go. I'm not going to worry about it. This is not a fad that nuances may change, administration, we had more climate investments and more work done by private companies under the last Republican president. So even when the federal policy right now, the wind is on our back on these issues because of the Biden administration, but even if it's not so that this is not a fad. And that unfortunately in this country, unlike almost any other country, these issues are more polarized and more politicized.

And so in many, many countries, they're more fact based, science based. So the issue of, 20% of our country and if boards reflect that, 20% of our boards, I don't know if that's the case or not, don't believe climate change is real. So, we encourage people to look at the facts, look at the science, look at data, not make these decisions based on the politics or what a cable TV station is saying.

Mike Toffel:
So earlier you mentioned to pursue your theory of change, you have thought leadership engagement, you have this online course, you do work with individual boards and then you also mentioned sometimes you're supportive of resolutions that suggest we need some new board members. And so there's both a upskilling and also, occasionally at least, we need a change of leadership on the board. How do you decide when things have gotten to that point where we need new leaders on the board and we're going to support, I don't think it's usually Ceres leading that charge, but sometimes it supports others who are leading that charge. How do you make that call?

Steven Rothstein:
The market decides that, investors decide that. So they will, a few years ago, because it's public, their investors decided with Exxon, they had tried and tried and tried over many years, lots of resolutions and they didn't feel they were making enough change. So there was an effort officially led by Engine One and others to replace three directors. And it had never been done before, particularly three directors. And investors came to us and we worked behind the scenes. Again, we don't drive these decisions. We respond to the investor marketplace. And that's a case where they've replaced three directors really historic. So we think that that should be an effort of last resort. First, trying to educate, motivate, engage board members. But at some point, if boards are over years indicative that they don't see this change, then that is an option that should be considered by investors. And if we can be a resource to them, we wouldn't rule that out.

Mike Toffel:
Do you see the Exxon story as anomalous, or perhaps the canary in the coal mine and the beginning of a trend?

Steven Rothstein:
I hope it's anomalous, because I hope boards show great leadership and we're seeing lots of those, but I think it's more the canary in the coal mine. I think that there are still, while there are great leaders, there are too many laggards among our large economic companies. And so that I think you'll see that more just as, again, whether it be the board shouldn't be there, the resolutions on the auditors, resolutions on other things that years ago wouldn't have gotten... It's not just, they're more resolutions, but they're getting larger votes. They're getting majority votes in some of these areas. Years ago they'd get 10% or 15%, now they're getting 50% or 70%. So I do think there are more resolutions, they're getting more votes and because the urgency of the issue and the investors are calling that out.

Mike Toffel:
So of all the different efforts that you're trying to encourage boards to make to be more aware of climate risk and opportunities, are there examples of companies who you think are getting this right?

Steven Rothstein:
Yes, there are many, so Ceres has what's called a Company Network, companies that have joined and working with us day in and day out on their sustainability journey. And there are 60 of them from Hershey and Bank of America and GM and others that are doing lots of great things. There is no company that is "perfect," to run a Fortune 500 company's complicated. And so I wouldn't say there's any company that is "doing everything right," but there are lots of great leadership examples. And by going to Ceres.org and looking at our company network members, you'll see a lot of case studies of companies that are doing great things, food companies that are reducing their water usage, companies that are reducing the greenhouse gas while growing their company. We do not believe this is a trade off in, by reducing those you have to lose money.

Mike Toffel:
Great. But those are activities of management, I guess I'm trying to figure out if, and it's fine if you don't want to name any companies, but companies whose boards are addressing this in a comprehensive way.

Steven Rothstein:
if you look at Hershey or look at General Motor, look at the kind of systemic changes that they've made, the billions, or in some cases, hundreds of billions of dollars decisions, it may have been recommended by the board, or by the management, I'm not sure, but management's signed off on it, or maybe the management has pushed. Our work with boards on individual basis are confidential. So I have presented to boards brand names that you and your listeners would know that I think we've helped to stimulate them to go a little faster. And we appreciate there's a lot of times where companies will announce they're going to go a hundred percent solar or buy 10,000 electric vehicles or something like that. And we've worked behind the scenes with the management and their board to help them get to that place.

Mike Toffel:
Great. Are there questions that I should have asked that I didn't, concepts that you want to share with our listeners?

Steven Rothstein:
I don't think there are concepts, obviously there's more detail in each one of these, but the, how this is urgent, how it is part of their responsibility, how there are great role models within boards, and how many other countries, Europe for example, is way ahead of us in terms of the culture of this. And so we need to do it, not because Europe's ahead, but because investors are asking for it and mother nature isn't waiting.

Mike Toffel:
Great. Thanks.

Many of our listeners are thinking about going into a career in business and climate change. And I wonder if you have advice for what industries or functions or resources they should pursue in order to figure out where's the right opportunity for them to plug in.

Steven Rothstein:
First is we need a lot of smart, young people. That my generation, I'm in my sixties, has messed things up. So we need people to fix it and to figure out new ways, new technologies and new approaches. So I hope everybody who's listening thinks about this, whether it's your career full time or you're in a different industry, but climate's built into your responsibilities. I hope every single person thinks about that in some way. And it's first is, like lots of people have said, is find out what you love doing, because work is really hard and it's complicated and there's disappointment and challenges and there are lousy burdens and bosses and all kinds of things. So find something you really love and then get good at it, really specialized, and that specialized could be in a subject matter, you could learn, be an expert in water, or in methane, or in lots of other areas. You could be a specialist in policy or in housing or in floods, or you could be a specialist in communications or finance elements of it, or human resources.

So there are, for most people, my career is more of anomalous to this, because I've done a variety of different things, but most people, they specialize either in a subject matter, in a set of responsibilities, and do it in a way that you enjoy because this is the analogy of, it's not a 5K it's a marathon, but we need people to do this. I do believe fundamentally we can do better. And by 2030, 2040, 2050, that the earth can still be inhabitable and businesses can grow and the next generation can be happy. But only if we think about really dramatic changes and we need smart young people to do it. So I hope everyone figures out how to do it, whether it's their full-time job or built into something else they're doing.

And this is one of those areas, there's a book about racism. Kendi wrote How to Be an Antiracist. And the basic theory is you can't just say, you're not going to be a racist and think you're solving the problem. You have to be actively an anti-racist. The same on climate issues. You can't say, oh, this is a problem. And I'm going to give a donation to one of the great nonprofits. And there are dozens of them. You have to be active in anything you're doing, in every job, thinking about how it affects you and how it affects your home and your home decisions, and whether it be recycling or solar and how you get to work. And all of these things add up. So I hope everyone is listening. I appreciate what you're doing and the fact that people are listening. And I hope everyone engages in this way.

Mike Toffel:
So you mentioned your career was anomalous. I think lots of folks believe their career was anomalous. I wonder if you can tell us your journey, how did you end up where you are?

Steven Rothstein:
So right out of college onto Williams College, I worked for a United States Senator for a little while, and then I co-founded a nonprofit called Citizens Energy. Citizens is the world's only nonprofit oil company. Joe Kennedy, the father of the recent Congressman, and I and another guy started it in the late seventies. It started as an idea. And when I left in 86, we had given away tens of millions of dollars to low income folks to help with their heating bill. We started in conservation and solar and electricity and gas. Then I did environmental consulting, business consulting, environmental sector for a while, taught business school for quite a while in the evenings.

And then so did 20 years in energy environment. And then 20 years in other areas, I ran a school on the Charles River called Perkins School for the Blind. Perkins' the school that Helen Keller went to. It's the first school, Helen Keller, by the way, went to Harvard. It's the first school for the blind in the United States. And we started schools all over the world. And then I did some other things. And just before I came to Ceres, I ran the John F. Kennedy Presidential Library Foundation, presidential history. So I've been honored to work with a lot of great nonprofit institutions.

Mike Toffel:
And then how did that prepare you for the role you have now at Ceres?

Steven Rothstein:
Well, collectively it did, I spent 20 years, again, in the energy and environmental field. So I had a lot of context there. I spent a lot of time in finance, both teaching business school. I have an MBA, but then I worked in a lot of transactions over my decades and then working with smart people. One of the things I've always done that have been helpful is hire people who are smarter than me, which is a pretty low bar, but anyway, hire people that are smarter than me. And so that they've done amazing work on the governance side and the finance side, building on the amazing reputation that Ceres has built over its three decades.

Mike Toffel:
Great. Well, Steven, thank you so much for spending time with us here on Climate Rising, a very interesting effort your Accelerator for Sustainable Capital Markets is up to.

Steven Rothstein:
Thank you for your work for this podcast and for raising these issues. You're really making a big difference. Thanks for your time.

Mike Toffel:
Great. Appreciate it. All right.