We started the Climate Positive podcast just over three years ago at HASI, seeing an opportunity to contribute our unique perspective to the climate and clean energy podcast scene. As a pure play climate investment firm, we aimed to cultivate a forum for mission-driven leaders, innovators, and changemakers to engage in conversations about the challenges and opportunities on the path to a climate-positive future. Our inaugural episode of Climate Positive featured our trailblazing former CEO and current Board Executive Chair, Jeff Eckel. Now, looking back on over 75 episodes since launch, we wanted to take a moment to reflect and celebrate this journey and share more about the people leading HASI today in this special episode. Join Chad, Gil, and Hilary in this insightful conversation with three of HASI's most senior leaders - CEO Jeff Lipson, CFO Marc Pangburn, and Chief Client Officer Susan Nickey.
We started the Climate Positive podcast just over three years ago at HASI, seeing an opportunity to contribute our unique perspective to the climate and clean energy podcast scene. As a pure play climate investment firm, we aimed to cultivate a forum for mission-driven leaders, innovators, and changemakers to engage in conversations about the challenges and opportunities on the path to a climate-positive future. Our inaugural episode of Climate Positive featured our trailblazing former CEO and current Board Executive Chair, Jeff Eckel. Now, looking back on over 75 episodes since launch, we wanted to take a moment to reflect and celebrate this journey and share more about the people leading HASI today in this special episode. Join Chad, Gil, and Hilary in this insightful conversation with three of HASI's most senior leaders - CEO Jeff Lipson, CFO Marc Pangburn, and Chief Client Officer Susan Nickey.
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Episode recorded June 13, 2024
Chad Reed: I'm Chad Reed.
Hillary Langer: I'm Hillary Langer.
Gil Jenkins: I'm Gil Jenkins.
Chad: This is Climate Positive.
Chad: Just over three years ago, we at HASI launched Climate Positive because we saw a gap in the climate podcast space. HASI enjoys unique position in the marketplace. We partner with developers and sponsors across the industry to invest exclusively in real assets with quantifiable carbon and other environmental benefits that facilitate the energy transition. And we believed we could leverage this position to create a forum for mission-driven leaders, innovators and changemakers to come together and discuss the challenges they were tackling to create a climate positive future.
Gil: Committed to setting our branded podcast apart, we've aimed for candid and far-reaching discussions with our guests about their lives and work to drive sustainable solutions.It was a leap of faith, but we trusted that our culture of curiosity would produce an engaging show that would stand the test of time.
Hilary: The first episode of climate positive featured our pioneering former CEO and current Board Executive Chair Jeff Eckel, who was one of the first climate thought leaders and has been a champion of the podcast since its launch. As we look back on over 75 episodes, we wanted to celebrate with the three most senior leaders at HASI – Jeff Lipson, our CEO; Marc Pangburn, our CFO; and Susan Nickey, our Chief Client Officer – as they discuss the future of HASI and our industry. We all really enjoyed this special episode and hope you do as well.
Gil: Jeff, welcome to Climate Positive.
[laughter]
Gil: Susan and Marc as well.
Jeff: It's a thrill to be here for this podcast. Chad and Gil and Hilary, you guys have done a tremendous job over three years and over 70 episodes. I'm so proud of you, and the board is as well, and all of your colleagues. This podcast has just worked out fabulously well. HASI's always considered itself a thought leader and very interested in intellectual and constructive dialogue. You three have advanced that in a way we could have never imagined. We're absolutely thrilled by what you've done. Can you guys just talk a little bit about the podcast and how it's evolved and where it's going?
Gil: Sure. Quick side story. The year was 2020, we were all experiencing something out there. I think we all felt a need for a connection. I personally, as the Marceter and comms guy, have always loved podcasts as a medium.. There was a real sense, as you alluded to, we have this culture of curiosity and intellectual pursuit. I sense that from our book club and our hallway conversations. We have this amazing platform as a pure-play climate investor.
We got a cold e-mail from our now and still producer, Dave Benjamin. With that, I think that gave me the courage to talk to Chad, who I was working with a lot at Investor Relations and Comms. I said, "What do you think about this? Could we do this?" He said, "Yes. Well, let's bring in Hilary. She's smart. She's fun. We like her voice." We tease Hilary sometimes as the great NPR voice of the three of us. We conceptualized it for a few months. We did it right. We did a test episode with our general counsel, who amazingly signed off on this. Then our first episode was in March of 21 with our chair, our CEO, and now chair, Jeff Eckel. It was off to the races.
Chad: No, thank you for the kind words, Jeff. I also want to thank you and Jeff Eckel and the entire leadership team and board for being supportive of the podcast. We certainly couldn't have done it without your support and for us donating some of our time professionally to it. Thank you for that. I really appreciate it. It's exciting to do these episodes on trends, where HASI sits in the industry. We have such a broad view of the industry trends that are happening and the challenges the industry faces and, leveraging our relationships, many of which Susan brings to the table. It's just been really helpful to hopefully developing a meaningful podcast that many people find useful.
Hilary: I'd echo the sentiments and really grateful to be a part of this. For me, it was an interesting time. I had my child two weeks after our offices shut down for COVID. Then it was just an onslaught of bad climate news around that time. Things were pretty dark and you didn't get to get out much. As Gil and Chad have alluded to, there is that longing for connection. Steve Chuslo, our general counsel, was immediately very supportive and active with this. All of you were as well, and Jeff Eckel.
It was really fun to conceive of this. Then it's been such an honor to talk to all of these people who find such joy and excitement in this work that we do day in and day out from a range of industries and backgrounds. It's really fun. It is just always exciting to get to talk to different people and hear how they're bringing their perspective to this climate challenge.
Jeff: That's great. Thanks for that. I know we've not historically used the podcast for good reason to promote our company but I know you guys wanted to do a special episode on what's happening with HASI. Let's get into it.
Chad: We want to first, as we do in many of our episodes, talk about the career paths and journeys of our guests. Jeff, prior to HASI, you spent most of your career in the finance and banking sector. Can you tell us a little bit about your professional path and why you ultimately chose to join the leadership team of what was then a rather small climate investment firm in the halcyon days of 2019?
Jeff: Sure. Thanks, Chad. I've had a unique journey, I think, in my career. After business school, I first worked for a large French bank, primarily in asset securitization and structured finance, and learned a lot there. Moved on to a large U.S. Bank Fleet, which eventually merged with Bank of America and expanded there. Still did a lot of securitization, but expanded into debt issuance and really a broader treasury role, balance sheet management, interest rate risk management, all the traditional treasury functions.
From there, I had the opportunity in 2006 to move to Maryland and join a large specialty finance firm, CapitalSource, as treasurer. I like to say, being the treasurer of a 100% wholesale-funded specialty finance company when the 2008 crisis hit was about as eye of the storm as you could be. That was certainly a tremendous learning experience and career development throughout the crisis. I think, we, at CapitalSource came through that well.
After that, a couple of the large investors in CapitalSource bought a controlling interest in a Maryland bank called Congressional Bank, asked me to come over and be CEO, which I did. We had the opportunity to build a relatively small $300 million bank into something more than $2 billion when I left and in the top quartile, if not decile, of profitability of U.S. banks by the time I left in 2018.
After that, in the summer of 2018, I had the opportunity to meet Jeff Eckel. We hit it off, and I learned more and more about HASI throughout that summer. In the late summer and into the fall, he asked me to come on board and be CFO and really focus on improving HASI's access to capital Marcets and funding platform, and liquidity platform. I jumped in. I really had, as I learned about the company and got to know Jeff a little better, was very enthusiastic about the opportunity for climate positive investing and the opportunity that HASI presented at that point in my career.
I'm thrilled that I did. It's been just an awful lot of fun. We've accomplished a great deal in the five years I've been here. Susan and Marc are here, have been here longer, and have really stood on their shoulders. Jeff executed a tremendous CEO transition in 2023. I've had the opportunity in the last year and a couple of months to really lead the firm. It's been an absolute joy.
Chad: One quick follow-up, Jeff. You mentioned the financial crisis that you led your organization through in 2008 and 2009. Any lessons that you used to lead HASI through the pandemic and global recession that ensued shortly after you joined the company?
Jeff: Sure. COVID initially looked like it might be a 2008 redo. The impact ended up being much more short-term in nature. I think when that crisis hit, thinking back to 2008, my focus was to control what you can control, really figure out how to not use too much leverage. Usually, by the time these crises hit, it's too late to unwind leverage. The real lesson is don't use too much leverage in the first place and really build things like bank relationships over the time.
The banks can be extraordinarily helpful in periods of time when the capital Marcets aren't functioning. I had focused on that both at CapitalSource and when I got here at HASI. In both cases, the banks were very helpful in pulling us through the crisis. Then these crises also result in enhanced teamwork and enhanced collaboration, enhanced camaraderie. I think when you pull through these things together as a team, you feel that much closer to your colleagues. I think that's exactly what happened here in 2020 as well.
Gil: All right, Marc You joined in 2013, HASI, but right after the IPO, as I understand it, and you've had, I don't know, how many different roles on the senior investment team before assuming the role of CFO at last year. Take us back. What drew you from San Francisco, California, back east to join HASI? Reflect on your own personal growth and progression to the C-suite and working with Jeff and Susan to drive us forward
Marc: Sure. Obviously, I joined because Hannon Armstrong Sustainable Infrastructure Capital, Inc. is the best name. [crosstalk]
Gil: It rolls off the tongue, doesn't it?
Marc: It's a very natural branding that comes through. In all seriousness, in 2013, when my prior company went out of business and I had the opportunity to seek new employment, generally speaking, companies that were focused on renewables or climate, energy transition wasn't really a term that was used back then, they did one thing. I could have worked at a wind developer, could have worked at a grid-connected solar developer, could have worked at a small C&I developer. What I thought was most attractive about HASI is that HASI focused on anything and everything that was climate positive. To me at the time, coming out of a renewables background, I thought the value in being able to shift back and forth between asset classes was both intellectually much more interesting for me than just doing another C&I solar project, but also was a much stronger business.
I'd say the second reason is I'm ultimately a finance person. I'm not smart enough to be an engineer. HASI is really the intersection of capital and finance and energy and climate. Those are things that I have been interested in well before I got here, but was a great mix for me personally.
Gil: Quick follow-up, any lessons learned in your first year and change as CFO? Has anything surprised you?
Marc: [laughs]
Gil: Give me some takeaways.
Marc: Well, it might not have been 2008 and 2009, but 2023 was not a particularly friendly year to those in climate, those in finance, and public companies in general. I do think that there's been a bit of a trial by fire. Again, those are actually good experiences to learn from. I'd say one dynamic I did not appreciate coming into the role is how much influence over the business I would have in areas that I never really thought about before, coming really out of an investment background and engaging with our clients and structuring transactions. They're really transaction-oriented background. That's been very exciting for me. Hopefully, I'm wielding that influence productively.
Jeff: When I handed the CFO reins over to Marc, I described it to him “As CFO, everything is your problem.”
[laughter]
Jeff: That's how you might define CFO in an organization like ours.
Hilary: All right, Susan, turning over to you. You have held a number of leadership roles across your career as CEO, CFO. In addition to your leadership at HASI, you're currently chair of the American Clean Power Association. A theme throughout your career has been this focus on renewables and clean energy. What drew you to this space initially?
Susan: Fortunately, I was lucky, because I hadn't targeted renewables. In fact, early on in my career, renewables wasn't even a word or mainstream phrase. I had started out, too, in banking with the Dutch bank, ABN AMRO. I was on my way to become the first non-Dutch expat traveling around the world. It was my goal to be in international finance and banking. When my boss at the time said, "Hey, renewable energy is about to take off," it was the beginning of the independent power industry that was enabled by a policy change, "Come do this for a while. You can always go back to international finance and banking."
And so I did. My colleague who joined me in that project finance startup was assigned to do natural gas. He said, "Well, you go to figure out alternatives," and so I did. I realized as I was getting into that business that it would be even a more exciting opportunity to have an impact on the world. I was very mission-driven as a child. I was like, "Whoa, this is the beginning." We need to figure out how to make alternative energy, not just 1% or 2% or 3% of our energy mix, but to really make it our mainstream energy and finance and capital was going to be a big driver since wind and solar, the resources are generally free.
Hilary: You mentioned that when you were joining this industry, it wasn't called renewables or climate space. As someone who was mission-driven from a young age, how did you think about it and what was the language like around it?
Susan: Alternative energy is only going to be 1% or 2% or 3% of our power. In fact, wind and solar weren't even financeable or economic. In those early days, it was more biomass, waste to energy, waste coal to energy, wood chips to energy, very difficult projects actually. As wind started to become the first renewable power source that was industrialized when GE came in and bought Enron, all of a sudden you could see the possibility that we could start scaling and drive the cost down to make wind and then solar economic, which that's what it's about. We have to have reliable clean energy that's also economic.
Hilary: Fantastic. Jeff, turning back to you. Given all of this groundwork that's been laid in this space, 2023 was another record year of growth for clean energy. It's become embedded in the landscape of energy across America, but there continues to be some noise about whether it's just a blip. I'm curious how you as CEO think about HASI's role in this transition to making clean energy even more dominant.
Jeff: Sure. Thanks, Hilary. I think there are misperceptions often about HASI in particular and clean energy in general. In fact, when we did our investor day in 2023, I had a slide I called myth-busting because myths develop around clean energy and our company. I'm not quite sure why. I do spend a fair amount of my time in investor relations clearing up misperception and busting myths. One I like to say flippantly is I spend a fair amount of time talking to investors and making sure they understand that when Republicans are elected and when rates are high, HASI is going to be equally successful. We didn't build a company that only really works if Democrats are in office and rates are low. That's completely false. We did perfectly fine during the Trump administration. We've done very well in 2022 and 2023 as rates are rising.
I think the clean energy transition itself has suffered over the last year from the broader perception that in a higher rate environment, these projects are just not economic. That, again, is false. The underlying economics of clean energy projects is there. The levelized cost of energy studies have proven that. The vast majority of projects waiting to be interconnected are clean energy projects. With each subsequent forecast of demand over the subsequent decades, energy demand keeps going up.
Part of that is driven by data centers. Part of that is driven by AI. All the consultants will tell you each time we do a forecast, it shows more and more energy demand, which just reinforces the need for incremental supply. The supply is going to be substantially clean energy. That's what the users want. That's what much of the public wants. That's what much of the public policymakers would like. That's what economically makes the most sense. There is no concern. I worry about a lot of things. What I do not worry about is that there will be a massive ongoing supply of clean energy projects that will create opportunity for HASI.
Chad: Marc, building on what Jeff just said, obviously our industry is growing very quickly. Last year in the U.S. alone, over $225 billion was invested in clean energy. We have wind and solar adding supply faster than nuclear or natural gas ever have. Our industry is capital intensive, and perhaps more so than some of the fossil alternatives out there. We are in a slightly higher rate environment. How can both the industry and HASI support the reduction of costs, both capital and operational, to ensure this accelerated growth going forward?
Marc: I think my answer is going to be relatively boring, but that's allowed given my role. It ultimately just comes down to performance. The demand is there. The end user wants clean energy. The world understands that climate is something that is both to be a bit afraid of, but also a fantastic opportunity. The amount of change that's going to occur within industry creates a great deal of opportunity.
The demand is there. The capital is there. People want to invest. Investors want to invest. U.S. investors, European investors all over are interested in deploying capital. The path to lowering our cost of capital, lowering the cost to deploy these underlying assets really comes down to performing and executing well, giving investors confidence that when they make an investment, they're going to get their money in return back as they expect, and then building scale. There's a scale dynamic that the U.S. very much needs to catch up to in terms of the amount of deployment and manufacturing, and that scale will drive down cost in addition to providing a massive investment opportunity for HASI.
Gil: Jumping off that, Susan, you and I work a lot together in the policy advocacy space Hilary mentioned you're chair of the American Clean Power Association, which HASI is proud to be a founding member. We spend a lot of time there. So Let's talk policy advocacy for our listeners a bit. I think clearly you would agree the tailwinds from the IRA passed in middle of August '22. We're starting to see them, right? The stats called it out.
It's supercharged the markets and the clients and the projects that we've invested in for decades successfully. It's a very exciting time. Talk about you're out there on the road as our chief client officer. You're representing the industry as the chair of the American Clean Power Association, talk about where we are, what's happening. Maybe do some myth-busting if you want, and we'll go from there.
Susan: We can't underestimate the real power and tailwinds from having long-term energy and industrial policy passed in the U.S. Just two, three years ago when you look at the combination of the IRA, the infrastructure bill, and the CHIPS Act, and just immediately, it gave the long-term signals to step up investment in the U.S. market and also to make the U.S. the place to be. We saw the immediate, and talking to our clients and board members of American Clean Power and other associations, companies can invest anywhere in the world, and they shifted immediately more capital to this marketplace to invest, not only in projects but the incentives to invest in manufacturing to industrialize here in the U.S.
We're just really just taking off. It takes two or three years to have all that just kick in, to build factories. Projects take longer to develop. We're just seeing the multiplier effect now of all that investment and having-- When you're not going to open a manufacturing facility for a two or three-year credit, you can't just invest in projects for that. This long-term horizon for our industry couldn't have happened at a better time because we certainly have shown we need the power now.
Marc: I have a question for Susan. In IR, Jeff and I get asked quite frequently, what's so special about HASI? Why do your-- You're working with these clients who are some of the largest developers, infrastructure owners, and operators in the globe. Why do they want to work with you? Why do our clients like to work with us?
Susan: We are client-centric focused, and I think, as Jeff said, actually having someone who has chief client officer when we came up and defined, that's my title, it lets the executives of our clients know this is core to our mission, and we're here to support you. What's really even become more important with their businesses is because of the scale, the growth, the speed of what they're trying to do, having a reliable partner who can execute, who can be efficient, who understands their business is even more important to their strategies and to their ability to really turbocharge and grow so fast. It's not just capital. Obviously, capital has to be competitive. They have to have power that's competitive, but their people, their teams, have every single minute counts. We help be the right partner to deliver on that.
Marc: Now that we have a recording, we can just play that for our investors now.
[laughter]
Gil: Is that how you answer it, Marc, or any differently? One of the things you say, with your quips, I'm going to playback, "We seek partners, not projects." That was very clear to me as how we differentiate as financiers. Everybody's got money. There's a lot of money in the space but these are long-term, 20, 30-year assets. It's the people, it's the expertise, and, yes, it's the competitive cost of capital expand on that quip and some of the points Susan was making on we're different than your typical financier?
Marc: Sure. I think partners not projects really ties to our programmatic relationships with our clients, where we can establish a way of doing business that is repeated over time in multiple different transactions. That reduces the friction cost that is inherent in all of these underlying infrastructure transactions. That friction cost shows up in the form of time. That friction cost shows up in the form of legal expenses, which, of course, everyone would rather pay less of.
It's really, of late, been the time component. There's been so much growth. There's so much bandwidth constraints in every part of the industry that having a programmatic relationship that can reduce the time to close is a big component of what our clients find valuable. Then I think another part is how do we actually establish these relationships? I think that really comes back to Jeff's pillars and what he talks about a great deal in terms of our climate assets. Perhaps I'll use that as a segue to Jeff.
Jeff: I would agree with everything that Marc and Susan said. I'd expand it to say that another reason our clients work with us is the post-closing acumen that we have. Many of these projects are high-touch post-closing. We've built this team that is incrementally helpful to our clients in terms of managing these projects. Once we have several projects that we've worked on together, when you take the next incremental project and say, "Well, should I work with HASI again? We can think about this more holistically with the prior projects in the way that we manage them going forward," I think that acts as an impetus to continuing to work with us. This repeat business, I think, works well for both sides. That's where success lies, that it's not just beneficial for us, but it's beneficial for the client as well.
Susan: That's for sure. I hear that repeatedly with our clients. We're investing in projects, energy projects, that are complicated and for the long term. We're talking about 20, 30-year or more assets. Really, being there, and I learned that when I was the CFO at Acciona, we'd close a deal with a financial party and they'd hand it off to asset management. You're like, "Oh, but now I have a problem. Who do I call? Do they understand the asset?" We holistically focus on our clients and integrate internally to understand the assets, know the clients, and be able to reach out and make sure we pick up the phone and work through problems that arise, not just great execution on closing. Of course, I always give our clients my cell phone so they have the 911.
[laughter]
Hilary: Great, thanks. Jeff, we recently announced the $2 billion strategic partnership with KKR - CarbonCount Holdings 1. What is this initiative, and what does it mean for HASI's long-term growth?
Jeff: This is a very, very important milestone for HASI. It's a very helpful transaction for KKR as well, building upon, what I said a moment ago, that success lies when it really works well for both parties. If you take the HASI side of the benefit of our CarbonCount Holdings 1 partnership, it's fundamentally that as we built the company and became larger and larger, we were doing more and more debt and equity, and we never really had a challenge in terms of raising capital. We never had a challenge working with our banks in private capital raising or in public capital raising.
Nevertheless, in 2023, Marc talked about what a challenging year it was in capital markets, and part of what became a perception was that we were a company that was overly reliant on capital markets. That wasn't new to us. We had for several years talked about bringing in third-party money, whether it be through syndication or some fund or some co-investment partnership. We'd been having these conversations for many years but '23 really accelerated our focus on getting something done here in what we call capital light and using less of our own capital.
If you take the KKR side of things, these large funds have become enormously proficient in raising money, but aren't always perfectly equipped to deploy it in the pace that they'd like to do so. They've developed a partnership model, particularly at KKR, where they have any number of partnerships to help them deploy the capital. In their infrastructure fund, they were looking for a clean energy partner. I think it's an enormous endorsement of the HASI strategy and the differentiation of the HASI strategy that KKR is working with us to get at these investments that are otherwise very challenging to get at.
Anyone who thinks our strategy is undifferentiated in some way and anybody could replicate what we do, I think this transaction is proof positive that what we do is very difficult to replicate and in fact very differentiated. It was a perfect match between what we were looking for and what they were looking for. It's a $1 billion each. The target is to invest that amount in the next 18 months, which is consistent roughly with the prior 18 months. Our role is to source, underwrite, and manage the assets. KKR has been a great partner so far, working with us, meeting frequently, understanding the underlying investments in the vehicle.
We're continuing with business as usual. We've not changed our strategy. We've not changed our investment strategy, nor did KKR ever ask or imply that we should do so. They entirely bought in to the diverse portfolio of investments that we originate. The term win-win is very cliche, but here it wholeheartedly applies to this transaction, and we're enormously excited about what this can mean for the future of HASI.
Hilary: Fantastic. Thanks.
Gil: Okay, Marc, tee-off, big picture, future of HASI, expand on Jeff's comments about KKR. How are we going to scale and increase in this decade of tremendous opportunity in the clean energy markets? What keeps you up at night today, and what excites you about our growth potential?
Marc: I'd have to say the trendy answer would have to be AI. We're going to scale through AI.
Marc: I think the real answer is I don't think anyone knows how AI is going to filter into the business, but it will in some way. We'll figure that out as we go. The first company I worked for was a fantastic organization that was probably one of the more bureaucratic places on earth in that it was a large lifeco. It's bureaucratic for a reason.
My second job was at a five-person solar developer that did not know how to spell internal controls. I think what HASI brings to the table is the perfect mix of both, where we are fundamentally an organization that needs to assess risk, and part of risk and risk assessment is having controls and processes in place. Even as we grow, we continue to encourage a entrepreneurial spirit that comes with a small company. I think that makes it a very interesting place to work.
My counter to the trendy AI answer is it's still a people business. The people business is based on innovation, trust, risk assessment, and so I think the way we scale is we continue to make HASI the best place to work that attracts very talented, high-quality, mission-oriented people, and the rest will fall into place over time.
Chad: Susan, given Marc's comment that we're a people business, you are a prolific relationship builder. Someone once said to me, and I think it actually may have been Marc, that Susan truly knows more people in the industry than I've ever met in my life. As HASI's chief client officer, you're in charge of deepening and broadening HASI's relationships with both our large clients, international ones like ENGIE, and the smaller ones that are providing newer services like Zoom, which decarbonizes school bus fleets.
We talked a little bit before about how we do differentiate ourselves from banks and infrastructure firms and other competitors out there in terms of what we provide to our clients, but maybe is there any example you can provide, cognizant of NDAs and other company proprietary information of how HASI has solved a client problem and built a strong relationship because of it?
Susan: I think we have a number of clients we could draw from, and it was really great when we did our investor day a year ago. I was presenting our client-centric focus. I thought even better than me talking about our relationship with our clients, I think Jeff had said, "Why don't you see if the CEOs of our clients would actually come and speak and talk about why they partner with HASI, what they value from our relationship." As I started to reach out, I picked five of our top clients and thought, "Well, maybe we'll get two or three." They all said, "Yes. I want to do this," so we extended the time frame to let them talk about what they value with HASI.
I think ENGIE's one, for example, who we've started our partnership about five years ago in the community solar distributed side of their business, and over the years have worked now in taking that partnership and replicating it across five of their different businesses, whether it's utility scale side, the university side, some of the other things they've done, and behind the meter. That's a great example of how we do programmatically help them expand as they were growing rapidly in the U.S. market to provide reliable long-term capital.
As they say, they know us. Things happen. We've had problems in different projects that we just roll up our sleeves and get together and work through them. I'm a big believer of being in person. We do go out, not only myself but across our organization from the managing directors to the associates to the analysts, to our engineers. We get together in person and meet and talk about our projects so we know each other and understand even better the day-in and day-out challenges they face so we can appreciate and respond. I think that's just really important to why part of our secret sauce of zippering, as we call it, and being a reliable and desired partner.
Jeff: Hopefully, listeners to the podcast have figured out what HASI does. Just to clarify, we are a climate positive investment firm that defines itself through climate, clients, and assets, meaning everything we invest in is neutral and negative on carbon emissions, and we measure and report that impact. Clients, in that the business has been built on strong client relationships that result in repeat business and better outcomes. Assets, in that we invest at the asset level, not in platforms or companies, which creates a low-risk business model and a diverse access to the energy transition.
Chad: Excellent. Well, thank you all very much. It's been a lot of fun. As we do with all of our other guests, we're asking you to join the hot seat. I'll just throw a question out there and ask for your immediate thoughts. The first one, one of the most influential books or articles I've ever read is?
Jeff: I actually do most of my reading in history, but I'll pick a business book that had a big impact on me. When Genius Failed by Roger Lowenstein, which is a story of long-term capital management, I thought was very helpful and influential in understanding how you could bring together all of these geniuses and it still doesn't work out. Some of the lessons there are things like leverage kills and in a crisis, all diversification goes to one. That book had a lot of influence on me.
Hilary: What about a favorite historical book or history book?
Jeff: Well, there's so many. I would maybe, say, Nixonland by Rick Perlstein had a big impact on me, which really tells the story of the period of the early '60s, where there was more consensus in the country, to the early '70s, where there was a significant breakdown of consensus, and how we got there over that 10-year period and everything that happened from Watts riots to Kent State. It was just a very interesting period. I found that book very interesting.
Marc: I have a non-traditional answer, which I may decide to cut later, depending on how it comes across.
[laughter]
Marc: Lord of the Rings. Combine the fact that it's a core memory for me, because my dad read it to me. I've read it to my kids, and then look how he describes those who are good versus those who are bad, and think of that from a climate lens, and how could I not end up working in climate?
Gil: That resonates with me, Marc. I'll just say my real name is not Gil, it's Gilowen. My parents were huge Tolkien nuts. They loosely named--
Hilary: Are you serious?
[laughter]
Gil: Yes, this is a fun fact. I'm not explicitly named after a dwarf king from The Hobbit, but Gilowen is meant to- so did not know that about you, Marc. Very cool. We'll talk elf LOTR stuff later.
Susan: I have to comment that the books that really had a huge impact on me go back to my days of being in the foreign service school at Georgetown University, and Henry Kissinger lectured, so we had to read his memoirs. Years of Upheaval was his most recent at that time. Sometimes I ask myself, "Well, I've got this foreign service degree, I want to be in international finance, but now, as Gil reminds me, as chair of American Clean Power Association, being able to understand the art of diplomacy and different tactics, including backdoor channeling, going back to the lessons of our famous and perhaps most successful Secretary of State, Henry Kissinger, come in very handy.
Hilary: We'll have to link to all of these for the summer reading lists. When I need to recharge I?
Susan: Look to the water. I love living in beautiful Annapolis on the water every day, and especially whenever I can I go sailing and race competitively. It's my passion. When you're out racing on a 34-foot sailboat with seven crew, you have to have every moment your eye focused on what's going on in the water. It's super competitive, and so it's a great time to clear my mind and enjoy being outdoors.
Marc: I work on my hobby farm. My wife does most of the work, but we have chickens and bees and a garden. During COVID, we went crazy and raised turkeys, which is a story that's too long for this podcast.
Speaking of if all problems are CFO problems, you learn very quickly how many problems there are to deal with in food and agriculture. While that's something we haven't figured out how to invest in yet, working on this hobby farm has certainly made me respect a great deal where food comes from, how difficult it is to produce, and how important it is to do it better than we're doing right now as a country.
Jeff: I would say take a walk on the beach with my wife. I don't think there's anything more powerful than looking out at the ocean when you need a recharge and just thinking how perhaps insignificant you are to get you to keep things in perspective. Walking on the beach is something you can do when you're 5 and when you're 80, and it still feels the same way throughout your life. That recharges me.
Hilary: I agree with that, Jeff. Helpful advice a mentor has given me.
Marc: Hang up the phone when you get the answer you want.
Hilary: Yes. Who gave you that advice?
Marc: It was my solar developer that I worked with.
Hilary: Okay.
Jeff: Well, it's funny you say that, Marc, because my father's a lawyer, and he used to like to say, "When the judge gives you the right answer, you get out of the courtroom." That's very similar. It's the lawyer who got the opposite answer who remains behind fighting with the judge while you're out in the parking lot. I've had a lot of great mentors, which I really appreciate. I've tried to pay that forward and mentor some people. One that I like is when things are going well, you're not as smart as you think you are. When things are going poorly, you're not as dumb as you think you are. I think the answer lies somewhere in between. That's one I like.
Susan: I've had great mentors, too. One in my early youth and another further on in career both said, "Once you set a goal for yourself of where you want to end up, you really also focus on how you're going to get there with a defined path that will lead you to success and achieve that goal."
Hilary: Thank you.
Gil: Okay, fill in the blank. Marc, the word or phrase I most overuse is?
Marc: Strategic. Strategy is something that I think is very specific. I and probably many people use the word strategic just to really convey, "Hey, I'm saying something really important here," but it's very rarely actually strategic. It's just something important to focus on.
Gil: You know what's even worse than strategic? Strategic imperative.
[laughter]
Gil: I said that once and someone told me to never say that again.
Marc: Because we invest in assets and not M&A, we luckily don't have to use synergies too frequently.
Jeff: I'm going to take the opportunity to throw that question back to the other five of you. As CEO, I speak in front of the company a lot and in meetings a lot. I'll perhaps give my answer in a moment but I'd love to hear what word or phrase you guys think that I overuse since you have to listen to me so much.
Chad: Dangerous question.
[laughter]
Gil: Consequently?, perhaps.
Jeff: Okay.
Jeff: I didn't get a lot of takers on that one.
Jeff: I was going to say, well, in scripts for earnings calls I am constantly looking up synonyms for strong or robust.
Gil: Oh, that's right. That's right.
Jeff: Because you can only say strong or robust so many times on an earnings call, but I think in general dialogue, if I had to answer that question, I'd probably say constructive. I tend to use that word a lot. I talk about constructive dialogue and constructive collaboration. Hopefully, I don't overuse it. I do use that word a lot.
Susan: Say yes.
[laughter]
Marc: I think that much of the company will enjoy that response.
Susan: Always trying to find solutions for our clients, always accepting as Gil knows, speaking on another panel, or going to another meeting.
Gil: Susan, the key ingredient to my productivity is?
Susan: Energy. One of my colleagues, former colleagues, described me in the office as the energizer bunny. [chuckles] I always have enough energy, which is helpful when I say yes a lot, too.
Gil: Jeff?
Jeff: To some extent, fear and anxiety. I always deem myself as a glass-half-full person in life and a glass-half-empty person when I think about the business. I only mean that in the sense of I'm always worried about something. That drives me to be super productive, that I'm not missing anything. I'm not failing to ask the right questions. Fear and anxiety is a huge driver of productivity.
Hilary: You got to make sure you get lots of walks on the beach in the summer.
Jeff: Absolutely, Hilary.
Gil: Marc, key ingredient to your productivity?
Marc: I only allocate time in two places. One is with my family, and one is with work. If I'm going to spend that much time being at work, I might as well be good at it and work to make the company better.
Chad: Finally, before we go to the last one, I will note that the phrase climate positive was developed by Gil. Hilary and I helped shape the name of the podcast to make sure there weren't other words in the name of the podcast. Gil did come up with climate positive as our chief marketer here. I just want to give Gil the credit there. The final question we ask quickly, to me, climate positive means?
Jeff: The world's best podcast. And the largest macro trend we'll ever see and the driver of this absolutely wonderful company that we all have the privilege of working for.
Marc: A numerically positive carbon count. A mathematical computation of the carbon impact for every investment we make, based on data and science.
Susan: Leaving the world a better place for generations to come.
Hilary: Wonderful. Thank you all so much for doing this.
Gil: Thank you.
Chad: That was great. Thank you so much.
Jeff: Thank you, guys. As I started with, congratulations on building this into a really first class podcast. We're all very, very proud of you guys.
Gil: Well, thank you for being here and representing the most people we've ever had in our podcast recording studio at any point and thanks again for coming on.
Chad: If you enjoyed this week’s episode, please leave us a leave a rating and review on Apple and Spotify. This really helps us reach more listeners.
You can also let us know what you thought via Twitter @ClimatePosiPod or email us at climatepositive@hasi.com
I'm Chad Reed.
And this is Climate Positive.