My Climate Journey

Ep 66: Marilyn Waite, Program Officer, Climate & Clean Energy Finance at William & Flora Hewlett Foundation

Episode Summary

Today’s guest is Marilyn Waite, Program Officer, Climate & Clean Energy Finance at William & Flora Hewlett Foundation. Marilyn manages the foundation’s grantmaking on climate and clean energy finance with the ambitious goal of addressing climate change by accelerating the transition to a climate-friendly economy. Her grantmaking mobilizes private capital investments in low-carbon and climate-friendly energy infrastructure and systems, seeking to redirect finance from high- to low-carbon activities and encourage wiser energy investments. A key component to this work includes assessing climate finance flows, identifying ways to lower the cost and risk of investment, and supporting innovations in capital markets to address investor requirements for clean energy and climate-aligned projects. Great discussion, and great intro to how the foundation world can help tackle climate change. Enjoy the show!

Episode Notes

Today’s guest is Marilyn Waite, Program Officer, Climate & Clean Energy Finance at William & Flora Hewlett Foundation.

Marilyn manages the foundation’s grantmaking on climate and clean energy finance with the ambitious goal of addressing climate change by accelerating the transition to a climate-friendly economy. Her grantmaking mobilizes private capital investments in low-carbon and climate-friendly energy infrastructure and systems, seeking to redirect finance from high- to low-carbon activities and encourage wiser energy investments. A key component to this work includes assessing climate finance flows, identifying ways to lower the cost and risk of investment, and supporting innovations in capital markets to address investor requirements for clean energy and climate-aligned projects.

Marilyn has worked across four continents in venture investment, startups, and low-carbon energy. She previously led the clean energy practice at Village Capital, where she sourced and performed due diligence for early-stage startups solving energy challenges and built a network of 1,000-plus clean tech entrepreneurs, investors, corporations, and government stakeholders. As a senior research fellow at Project Drawdown, she modeled and forecasted energy solutions to climate change. Marilyn led several operational and research and development projects at AREVA in France, including performing technical and economic studies in the energy-water nexus and the nuclear energy cycle.

Author of Sustainability at Work, Marilyn serves on the board of directors for the Biomimicry Institute and lectures on sustainable business at the University of International Business and Economics in Beijing. She is an E2 1 Hotels Fellow, and as such, her work and writing highlights opportunities in women-led, green economy startups throughout the country.

She holds a bachelor’s of science degree in civil and environmental engineering, magna cum laude, from Princeton University and a master’s degree with distinction in engineering for sustainable development from the University of Cambridge.

In today’s episode, we cover:

Links to topics discussed in this episode:

You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.

Enjoy the show!

Episode Transcription

Jason Jacobs:                Hello everyone. This is Jason Jacobs and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change, and try to figure out how people like you and I can help. Today's guest is Marilyn Waite, Program Officer Environment for the William and Flora Hewlett Foundation. The Hewlett foundation is a non-partisan, private, charitable foundation that advances ideas and supports institutions to promote a better world. Marilyn manages the foundation's grant making on climate and clean energy finance with ambitious goal of addressing climate change by accelerating the transition to a climate friendly economy. Marilyn is also the first guest I've had on the podcast that comes directly out of the foundation world. We cover a lot in this episode, including Marilyn's work at the Hewlett foundation, the types of projects that they support, how they determine what projects are a good fit.

Jason Jacobs:                We talk about the strategic plan that they rolled out recently in some of the core areas that they'll be leaning into in the years to come. We talk about some example projects that Marilyn is particularly excited about. We also talk about how they measure success with the grants that they make and the role of the Hewlett Foundation and of philanthropy in general in the climate fight. It's a great discussion. I hope you enjoy it. Marilyn Waite, welcome to the show.

Marilyn Waite:             Thanks for having me.

Jason Jacobs:                Well thanks for hosting me. Well it's sort of your office, it's your satellite office here in Oakland.

Marilyn Waite:             It's the New Energy Nexus Office.

Jason Jacobs:                I'm excited to talk to you. Alicia Seiger is who suggested that I reach out, but as it turns out I know you work with the Prime Coalition team and I've gotten to know them pretty well and they're great. I'm sure we know a lot of other people in common as well. This is actually the first stop on My Climate Journey either on the podcast or just in general that's actually talking to a foundation. It's such an important piece of the puzzle and this is the icebreaker for me, starting to understand that perspective. I've talked to professors that do research. I've talked to climate scientists in the lab, I've talked to entrepreneurs hitting it from all different angels. I've talked to people at prime coalition or more of the institutional funds.

Jason Jacobs:                I just came from talking to Ilan at Cyclotron Road. It's like I hit it at all different ways, but nobody from the foundation world, so thank you for being the guinea pig.

Marilyn Waite:             Pleasure to be here.

Jason Jacobs:                Oh and the other thing I should add just for listeners' benefit is typically, I mean the way it works I usually at least know people a little bit before we do the episode and in this case, we basically said, "Hello," and hit record. That's just for context for any listeners. I don't know what-

Marilyn Waite:             There's no preparation in this podcast episode.

Jason Jacobs:                Yeah, I did some. I did some homework on ... I know all about you. No, but we haven't had the benefit of speaking before. But I'd love to hear a little bit about your work and your story. You can take that wherever you want it to go.

Marilyn Waite:             Sure. I am a civil and environmental engineer by training. I started my career in Madagascar in water resources, and-

Jason Jacobs:                You speak a zillion languages.

Marilyn Waite:             I do not speak Malagasy, I learned a few words when I was there. I spoke mainly French in Madagascar. While in Madagascar, I went a few months without electricity. A local utility called Jirama, they went bankrupt. They just had a bunch of issues and just cut off the power. That's what really set me on my journey towards energy and climate solutions. After working in Madagascar, I went to the UK to do a masters and started my career in the nuclear energy cycle.

Jason Jacobs:                And can I stop you for second? You said energy and climate solutions. There's some overlap on the Venn diagram, but those are two different, right?

Marilyn Waite:             Yes. As we have learned by the great work by Project Drawdown, which I was also a part of. In Project Drawdown, we modeled over 80 solutions to climate change. Everything from educating women and girls to renewable energy to plant-based diets. Yes, there are multiple solutions and we need all of them to actually solve climate change. Should I continue my story or-

Jason Jacobs:                Yes, please. No more interrupting from me.

Marilyn Waite:             Joined the nuclear energy cycle in France. Started at a spent fuel recycling plant, which is where we take the spent fuel or used fuel from nuclear reactors and run it through a process and come out with new fuel. Slowly made my way to cooperate R&D where we were acquiring renewable energy technologies, offshore wind, fuel pellets for biomass, concentrated solar power, all of these new technologies that would complement this low-carbon energy base. It was there that I realized a lot of our troubles and obstacles were around the capital and not around the technology spectrum. I shifted my focus from engineering product management R&D to capital investing.

Jason Jacobs:                What brought you to that realization? What did you observe that led you to that conclusion?

Marilyn Waite:             Bad interest rates, meaning high interest rates from banks. The unavailability of capital for some of the high ... or perceived higher risk solutions to climate. Anything that wasn't essentially fossil fuel. If it was renewable energy, less of a track record. Just getting the protects financed. Getting the cooperate finance as well.

Jason Jacobs:                What was holding the capital back at that time of your assessment? I mean was it that the technology wasn't ready for primetime, or was it actually ready and there was something else holding the capital back from coming in?

Marilyn Waite:             Bankers and investors were not as knowledgeable for climate solutions, or let's just say zero carbon or low-carbon energy solutions as they were on emitting technologies like fossil fuel. The track record. The awareness. The ability to write size projects and to price them accordingly. These are all knowledge gaps, awareness gaps and market gaps.

Jason Jacobs:                Not to nitpick, but in my mind there's a distinction between an awareness gap and a lack of track record, because a lack of track record is actually valid an awareness gap is just a lack of education, but the track record is there. I guess it's moot because it's in the past anyways, but at that time when you observed this, should the capital have been flowing in and it wasn't, or did we need a different type of capital that didn't exist at that time?

Marilyn Waite:             I was sitting in a large multinational energy technology company, but if I take a step back, at that time and also this time, you have to look at matching the kind of capital to the kind of solution. High-risk capital, low-risk capital. We can call a high-risk capital a venture capital for lack of a better word, but that kind of capital was definitely and still not flowing to things like direct air capture, seasonal storage, all of these things that we need to have commercialized and available. But low-risk capital like bank capital is not going to take it on. There's a dearth of that higher risk capital available. That's one thing.

Marilyn Waite:             Also on the low-risk spectrum, when it comes to just scaling offshore wind, onshore wind, solar photovoltaics. Things that are very much proven in the marketplace. There's also a lack of capital there. There are gaps there around scale, around the time horizon of investors. A lot of investors or lenders, they want to go with the three to five year loans. A lot of those have paybacks beyond that. There are gaps like that that exist. Across the risk return spectrum, there are gaps.

Jason Jacobs:                Okay. You are at this big company working on nuclear, and you uncovered that the gaps were more pronounced on the capital side. What did you do with that insight? What next?

Marilyn Waite:             Working on nuclear and renewables.

Jason Jacobs:                Oh, and renewables.

Marilyn Waite:             Low-carbon. It was low-carbon at that stage.

Jason Jacobs:                Thank you.

Marilyn Waite:             I started to help really dive into the technical economic studies that we're doing, the financial analysis behind it. I had then left France to go to China to work on cross border MNA in the energy and industrial cycle, because there's so much capital available in China. There's so many solutions available globally. Helping with that, matching those two things. My plan was to spend a decade in China. I only spent about a year, year and a half at that stage. The main reason was actually ironically the air. Here am I trying to solve an environmental problem, and it turns out that there's a big environmental problem of bad air quality that inhibits me from staying long term in China. I go to the second most innovative and dynamic place, I come back to the United States to the market, where I join a investment firm [crosstalk 00:08:53].

Jason Jacobs:                I hope nobody from the federal government hears this episode. They're going to break out in hives when they hear that.

Marilyn Waite:             The second most ... and climate solutions. Please give more funding to high-risk climate solutions. Yes. No, there's just nothing like the growth rate of an emerging economy like China. Just can't match any industrialized, highly developed economy. I'm comparing that interest rate. It's that 10% versus the two or three percent. I come to the US and I join this investment firm, and I leave there clean tech, clean energy practice for-

Jason Jacobs:                Those global?

Marilyn Waite:             Village Capital.

Jason Jacobs:                Oh Village Capital. I'm sorry.

Marilyn Waite:             I don't know Village Global.

Jason Jacobs:                I think there is actually Village Global.

Marilyn Waite:             There's a Village everything. There's a Capital everything, there's a Village everything. This one is Village Capital.

Jason Jacobs:                I was just trying to show off that I had done my prep, but now I stuck my foot in my mouth.

Marilyn Waite:             Sometimes known as Vill Cap and the various verticals, and I was leading their energy or clean tech vertical. Great experience. Set up an investment basis around transportation logistics freight to really reduce emissions, improve energy efficiency in how we move around as people and how we move our goods around. That was amazing. Really focused on the domestic US economy, was able to really explore the different innovation ecosystems in the US.

Jason Jacobs:                You were writing early stage-

Marilyn Waite:             Early stage.

Jason Jacobs:                ... equity capital or ...

Marilyn Waite:             Well three kinds of checks. Equity, debt and revenue share. But mostly convertible notes at that early stage.

Jason Jacobs:                And what stage were these projects in that you are funding?

Marilyn Waite:             Some were pre-revenue, but most were post-revenue, early traction, but less than a million in revenue, generally speaking. Sometimes we were one of the first checks. Sometimes we were definitely one of the first checks in. We did something called peer selected investments. We got together a cohort of entrepreneurs that were addressing the same problem in different ways, so no direct competition. They were evaluating each other in this process that was facilitated, moderated. It was through that peer selected process that we chose our investments or made out final investment decision. Very unique take on-

Jason Jacobs:                I never heard anything like that.

Marilyn Waite:             Yeah. Peer review is very common in academia. There's no published paper without a peer review. It is virtually non existent in the investment world, but we were bringing that concept into that investment process.

Jason Jacobs:                Was it purely financial-oriented in the sense that ... I mean was it that high-risk capital that you were describing before, the venture capital asset class? What category did you consider yourselves in, in that fund?

Marilyn Waite:             Early stage BC, I would say.

Jason Jacobs:                Other than that process, it looked more or less like a typical venture firm?

Marilyn Waite:             That's a big, "Other than that process," but yes. It's a big caveat, but yes. For profit.

Jason Jacobs:                Yeah, that's what I'm getting at is that is it [crosstalk 00:11:49].

Marilyn Waite:             But always seeking to solve a big challenge or a big problem in society.

Jason Jacobs:                Okay. You did that for how long?

Marilyn Waite:             As opposed to the latest laundry app or dating app.

Jason Jacobs:                Yeah, yeah. I mean I got the fitness app, which is maybe somewhere in between. It's making people healthier so it's not completely mission-less, but relative to climate change, feels like a more existential societal problem, I'll say that.

Marilyn Waite:             Right.

Jason Jacobs:                No judgment, but ...

Marilyn Waite:             Right.

Jason Jacobs:                Okay. You did that for how long?

Marilyn Waite:             I did that for about a year and a half and before joining the Hewlett Foundation. The Hewlett Foundation was offering this opportunity to really have a blank page, and shape a whole portfolio around mobilizing capital to solve climate change that covered China, covered the European Union, covered India and covered the United States.

Jason Jacobs:                Is the Hewlett Foundation investing ... being a major climate funder, is that a relatively new thing, then?

Marilyn Waite:             No, being a climate funder is not a new thing. Probably one of the biggest parts of the Hewlett Foundation is the environment and that includes conservation in the western parts of the United States and some parts of Canada, and climate change. We have I guess a newly refreshed strategy around climate, and that is a $600 million commitment to helping solve climate change. That's a refreshed strategy. But Hewlett's been, from the outset, has been involved in the environment and in particular in climate for a long time.

Jason Jacobs:                That's 600 million over what time frame is that-

Marilyn Waite:             Over five years.

Jason Jacobs:                Got it. How does that compare to say, the five years prior in terms of the philanthropy that Hewlett was doing in this area?

Marilyn Waite:             I believe that it was less. There's an interesting history. When Hewlett first started to fund climate solution, so to speak, it did that by establishing intermediaries. Sometimes they're called re-granters. It established the Climate Works Foundation, and it put most of its capital through that entity to do the funding. Then it evolved into what we have today, which is an in-house operation, which still includes intermediaries like the Climate Works Foundation, European Climate Foundation, and the European Union, Energy Foundation of the US, Shakti Foundation in India, so on and so forth. But it also includes a whole strategy around developing strategies, publishing strategies, and implementing those through our funding in-house.

Jason Jacobs:                You work on the side of the organization that is determining who the grantees are for that 600 million?

Marilyn Waite:             Yes. We have sized my portfolio at about 75 million over those five years. We just launched our strategy, or made that public, the climate finance strategy. Yeah. Essentially, my portfolio is both working on sustainable finance, or innovative sustainable finance and systemic de-carbonization of capital. It's very unique in that we are able to support the prime impact fund that you know about. We are also able to support things like the platform for carbon and counting financials, otherwise known as PCAF, which is an industry-led initiative.

Marilyn Waite:             Bank-led, asset owner and manager-led initiative to actually begin to measure the tons of CO2 equivalent for each transaction, for each asset class of a financial institution. And have that number available, disclosed, or have those numbers, I should say, available, disclosed, so that they can begin to actually shift those numbers, change them, reduce them, and become more aligned with the Paris agreement. It is very much a blank page and very much flexible in terms of what we can do with that capital to get the job done.

Jason Jacobs:                That 600 million, there's a program director and then there's program officers that have a piece of that to make up the portfolio?

Marilyn Waite:             Yes.

Jason Jacobs:                Got it. How many program officers are there on the climate side?

Marilyn Waite:             Oh I should know shouldn't I? There are four of us.

Jason Jacobs:                And even if you're off one [crosstalk 00:15:49]. I'm just trying to get orders [crosstalk 00:15:50].

Marilyn Waite:             Well what's really unique about it-

Jason Jacobs:                Although I can guess because you take the 600 and divide it by 75, right?

Marilyn Waite:             It's not that even, but we have this unique thing called term limits, which I think is great at the Hewlett Foundation. We're in a period right now where we are one person short, and we are hiring for that position. That's why I was like, "How many are we exactly?" We have eight year terms. We have the people cycling in, people cycling out, but generally speaking, we have four on climate.

Jason Jacobs:                I want to dig into that 75 million and what you're focused on. I have a bunch of questions there. But before we do, maybe just big picture, what other buckets are there in that 600 million, besides your area of focus? Even if you don't hit all of them, just to get a sense.

Marilyn Waite:             My area of focus is quite unique because it is looking at markets, mostly. I would say the bulk of resources go towards policy and shifting public policy and politics across our geographies, which are mostly India, the United States, European Union and China. Most of the world's emissions. We have someone that's focused on transportation or electrification. Someone that's focused on power supply and the grid. And someone that's focused on the United States broadly, and shifting those politics.

Marilyn Waite:             We're actually in the middle of reshuffling that. I would say my portfolio is very clear in that it is focused on mobilizing capital for climate solutions and I'm also the European lead. We have a lead for each of our geographies, so staying abreast of what's happening at the EU level and also within those 28 EU level countries with climate.

Jason Jacobs:                Given that you've now worn so many different hats in the climate fight for so many different types of organizations, for-profit and non-profit, and big company, et cetera, what is it that made you think that the foundation side was the right place for you now? Also within that, what drew you to this market focus that you're describing? Or about to describe.

Marilyn Waite:             It's less about foundation world or philanthropy and more about somewhere to solve problems. It's a perch. I'm less embedded in the overall depth of philanthropy and more interested in solving this particular problem. There are many ways to do that in our society and Hewlett provide an opportunity to do so. What's interesting, philanthropy is this very uncountable part of the ecosystem that we have to set our own KPIs. We're not a business. We don't have customers or shareholders to keep us inline.

Marilyn Waite:             We're not a government. We don't have elections for the citizens to keep us inline or hold us accountable. We have to create this ourselves. It's very interesting being in this particular space, but it is a space that provides us flexibility to further whatever goal, whatever problem it is to help really solve it in innovative ways.

Jason Jacobs:                When you think about philanthropy and the problem of climate change, what is the job of philanthropy and how can it have the biggest impact in the climate fight?

Marilyn Waite:             That's the wrong question, Jason.

Jason Jacobs:                Tell me the right question then.

Marilyn Waite:             The right question is what do we have to have done? Period. What needs to happen in our world to solve this? It's a all hands on deck thing. For example, there isn't this such a big level of inequality in all societies in the worlds that has this excess capital available that has not been taxed to do these things. I don't think the solution is philanthropy. I think the solution is we need to have 100% renewable energy. We need to have 100% zero emissions transportation. Electrification. That includes electric vehicles charging infrastructure. We need to have high speed rail as a part of that. We need to move towards plant-based diets and have that be more mainstreamed globally.

Marilyn Waite:             Of course in some countries that is already the mainstream diet. We need to sequester more carbon in our soils. We need to maintain our forests. All of those things have to happen. How do we get them done, is then the next question. Each of those solutions has its own barriers and has some financial or capital barriers, and so how do we address that? I think it's less about a particular tax-exempt code of the IRS called philanthropy than it is about solving this particular problem, and how we can have all hands on deck to do so.

Jason Jacobs:                Then if you went down that list sector by sector, let's say using the Drawdown list as an example, because you mentioned Drawdown. Is it a different mix in each ones of those in terms of what should come from philanthropy versus innovation versus policy versus government versus something else? And you should look at it in terms of what's the problem and then what's are right approach using what's the right mix of these levers to best solve it?

Marilyn Waite:             Well definitely, I guess there are two things. One is just the pure mandates and policies around having that vision and that policy behind renewable energy, plant-based diets, regenerative agriculture, storage that enables that, all of those things. That's just from a governmental perspective.

Jason Jacobs:                Separate distinct policies in each one, or an overall policy like pricing carbon for example?

Marilyn Waite:             Distinct policies that make it very clear because ultimately we live and work in particular places in particular sectors. If you're working in agriculture it's not the same thing as if you're working for a renewable energy company, right. It's just not the same ecosystem of players. Yes high-level vision, but there needs to be concrete plans for each sector that has to transition. Industry, chemicals, steel, cement. Steel, cement and chemicals being the biggest part of the industry's industrial sector that has to decarbonize. All of things have to happen in order for us to solve this thing called climate change.

Marilyn Waite:             There has to be more than just this high-level target or high-level price. There has to be actually concrete action plans. Likewise, for the capital side, there has to be a concrete action plan and some concrete measures that come. I would say there's two main actors. There's business and there's government. There's the policy side and the capital side. Then there's each of us as individuals on the behavioral side. We also have to look at the behavioral changes needed that you can't necessarily mandate or provide enough accedence for financially either. You need all those things to come together.

Jason Jacobs:                Given that it's such a systems problem and given that each of the groups within those categories that you just mentioned have different intensives, who quarterbacks to make sure that there's a cohesive plan that's put in place, how does that happen?

Marilyn Waite:             Right. It's like how does the world even happen, right. There's a lot of chaos and there's a lot of organization. We have to organize and through multiple ways of doing that, I would say going back to one of the initiatives I mentioned earlier, PCAF, that is the financial sector organizing around decarbonizing financial portfolios. What's the best methodology? How do we get it done? What other products and innovations we can create to incense advise, so that a person that's going out to lease a vehicle, they can be incense advised to go after the EV as opposed to the internal combustion engin? Can our interest rate be more attractive for that EV? Those kinds of things can happen with that kind of organization.

Jason Jacobs:                Okay. I guess, given the top down approach that you described of starting with problem and then looking at what needs to happen, and then looking at what are the tools. I guess you mentioned that you have a 75 million dollar portfolio to allocate. What does that process look like then to get from, "Hey, I'm so excited about this opportunity, I start on Monday," to figuring out what to actually do?

Marilyn Waite:             Is your question about what to do with that portfolio? What to do as individuals? Sorry.

Jason Jacobs:                Oh I think what I'm hearing, correct me if I'm wrong, is that you're primary charter is to make sure that the portfolio that you're responsible for gets allocated in the way that can have as much impact as possible. Is that true?

Marilyn Waite:             That is correct.

Jason Jacobs:                Okay. What is that process of figuring out how to determine how to allocate that money so that it can have as big an impact as possible?

Marilyn Waite:             It's definitely more of an art than a science. We went through a whole 18 month process of creating our strategy around just, as you've mentioned, how do we have the most impact with this amount of capital. We talked to a lot of people, a lot of stakeholders, in all our focus regions. People that are really impeded in sustainable finance. Asset owners and managers, banks, those providing lending and credit, venture capital firms, private equity firms. Some of the development financial institutions, the MDBs, multilateral development banks. And those that are implementing the actual solutions, the energy professionals and the transportation professionals and the regenerative AG professionals.

Marilyn Waite:             Just collected a lot of solutions and understanding the gaps and the barriers and all of the advice around what needs to happen and how are capital can help. We when through this 18 month process of gathering that and then developing a strategy as you would if you a cooperation, if you would, to how to best mobilize capital. Where we fixated for this particular portfolio, was on the 1.5 trillion plus that's needed annually and globally to solve climate change.

Jason Jacobs:                Where does that number come from?

Marilyn Waite:             A lot of different studies. Actually the IPCC says from 1.6 to over 3 trillion is needed. There are other groups out there that have modeled around a 1 trillion needed globally, annually. Independent of whose study you use to come up with that number, there needs to be at least a tripling of what we're currently spending. We have about 500 billion going towards climate solutions and that's based on the climate models.

Jason Jacobs:                In that model where the 1.6 trillion and the IPCC report for example, what is that money assumed to be allocated towards?

Marilyn Waite:             Well it's across solutions and mainly energy solutions, but also land solutions broadly define. There's definitely been a lot more modeling done on global energy solutions than some of the other solutions for climate. The exception would be for Project Drawdown.

Jason Jacobs:                But does it assume ... and I mean forgive my ignorance, but it's just a new way of thinking about things. I come from this startup technology world thinking about my little piece and raising some equity capital and things like that. I mean this is just a much different world and I don't have my bearings yet, which is the reason I was excited to start this chapter of the journey, right. Does it assume that, I mean I guess, just structurally is that philanthropic, 1.6 trillion? Is that investment 1.6 trillion? Is it assuming any type of return on the initial money that is allocated? I guess I'm having trouble just picturing what that number represents.

Marilyn Waite:             Yeah I mean that's investments and that's across a variety of solutions, both large scale and for infrastructure [crosstalk 00:27:11].

Jason Jacobs:                Investing into companies? Or investing into R&D?

Marilyn Waite:             It's mostly project based, but however you can tie that number to the tons of CO2, right. You could imagine one dollar going to a company, that company may not use that one dollar, that translates to tons of CO2, right. This is really going to the tons of CO2 so that install project. Whether it's done by a company or let a state-owned enterprise or privately owned enterprise, that's independent of that. It's math to the solution.

Jason Jacobs:                Okay. I cut you off because I had a question, which you just answered. There's the 1.6 trillion that we need on an annual basis, and then what did you do then figure out how to ... what was the next step in that 18 month evaluation?

Marilyn Waite:             Sure. Then we see how much is currently being spent or being financed. We begin to identify where the barrier's inhibiting the capital from flowing at the right speed. Identify the barriers and then-

Jason Jacobs:                What are they?

Marilyn Waite:             There are multiple. Some we kind of outlined earlier around time horizons. The short-term nature of lending and investing, versus the longer payback periods, but also the longer time horizons of climate project and climate impacts. You have certain barriers that are the very project levels. I was mention some of the things the high-risk capital could serve. That's for example, there's dearth of that kind of capital willing to take those risks. Then there's risks or barriers at the portfolio level.

Marilyn Waite:             When you have, for example, a series of stocks or a series of bongs and you're managing that. You could be tempted to go and put the fossil fuel asset in your portfolio as a track record, which is another barrier, the same amount of track record as similar solutions, or let's say emitting solutions. You might be able to do that and still have a return in the short term, versus if you hold it for long that's definitely a standard asset. There's a mismatch between the way decisions are being made and the needs for planet.

Jason Jacobs:                Okay, you identified some key barriers. Then what?

Marilyn Waite:             Then-

Jason Jacobs:                This is all new for me.

Marilyn Waite:             Then we explore what we've done in the past, what others are doing in the ecosystem. What other foundations for example. What are the gaps to addressing those barriers? Sometimes we need to reinforce that others are doing. What we've done in the past. Sometimes we needs to go completely new places and address gaps because no one else is tackling those.

Jason Jacobs:                When did you complete this 18 month process?

Marilyn Waite:             Literally the strategy was released a few days ago.

Jason Jacobs:                Was that the post that said, I think it was 2019 to 2024?

Marilyn Waite:             2018 to 2023. Yes.

Jason Jacobs:                Yeah.

Marilyn Waite:             Close. We were-

Jason Jacobs:                I did read it.

Marilyn Waite:             We were implementing that strategy all along since January 2018, and we just have been refining it and finalizing it. Now it's out into the ether.

Jason Jacobs:                What's a summery version of the key pillars of that strategy as it relates to your area of purview?

Marilyn Waite:             One of the key things about this strategy is a recognition that we can no longer ... as climate finance philanthropy so to speak, only focus on the institution and the decision makers at the top of those institutions. I think historically we focused on convincing the CEO or this particular asset owner, or the CIO or CFO, to take a certain action. We thought that all the problems would be solved if just did that. Well, when you look at the decision making pyramid, really you have individuals, households, consumers making up the bulk of it, the base of it. It's our money.

Jason Jacobs:                What they would historically call mom-and-pop?

Marilyn Waite:             Mom and pop, or I like the put mom-and-pop shops at the next layer, the SME layer, but sure. But it's our savings that make up the assets of pension funds. It's our deposit that make up the assets of banks. That has been almost completely ignored by climate finance philanthropy. Then you have the next layer of small and medium size enterprises. That's where I put mom-and-pop shops that make up the bulk of employment across our economies, that we're focusing on. And decision makers around how capital was spent as well. Then you have the next layer, which was the large corporations themselves. Then you have the final layer, that Fortune 500, so-to-speak. Then the final layer is actually the financial institutions.

Marilyn Waite:             Those asset owners, managers, banks, VCPE firms. Then encompassing the whole pyramid, you have government oversight. All of that has to align around Paris, the Paris agreement has to align well below two degrees Celsius world. That is one of the, I guess, biggest points of our new strategy is that we're working on the entire pyramid and not only that top layer of just the financial institutions.

Jason Jacobs:                If those are the buckets within which you're looking to help, what is that help actually look like in terms of the types of projects that you might like to support?

Marilyn Waite:             Am I assuming right in that most of your listeners are in the US?

Jason Jacobs:                No. It's a mix. Right now it's about 80% US, but it's actually trending down percentage wise as the word of mouth spreads. I mean climate change is a global problem and I've tried to have a wide mix of guests. I would say the guests have been heavily focused in the US because ... oh well not exclusively, just because that's where I happen to be. Being in person is so much better, but directionally I absolutely want look at ... the focus of the podcast is not US. The focus is global, but it's just happening in stages and it's more heavily weighted to the US early on, but that's going to normalize over time.

Marilyn Waite:             Okay. Well I'll choose most examples from the US, but-

Jason Jacobs:                You have a global focus, is what I'm hearing.

Marilyn Waite:             Actually at least 80% of capital does not cross a border. Even though there's a lot of global trade money, capital is very, very national. The minute you cross the border that presents risks to investors, whether it's currency risks or just unknown risks, perceived risks, all kinds of things. It's actually very national or even regional when it comes to capital mobilization. On hand there's a global element, but really we're taking a deep dive on three economies, China, the United States, the European Union, and the 28 countries for now, in the European Union.

Jason Jacobs:                Full stack three countries.

Marilyn Waite:             Yeah. To give you some examples of what that [crosstalk 00:34:06].

Jason Jacobs:                I'm noticing a theme, which I really like by the way, that you can't just jump to the thing, you first need to frame it and start at the highest level and then work your way in, which I think is a really ... it's substantive way to answer a question. I like it. But now I'm used to your style, so I just need to incorporate that when I delve into the next topic.

Marilyn Waite:             For example in the United States, there's over 12 trillion US dollars in bank deposits. If we can even mobilize 1% of that, that's very material to our goal. One thing we've done is to help capitalize the Clean Energy Federal Credit union. There are over 5000 banks in the US. There are over 5000 credit unions in the US, credit unions are on the frontline of doing this kind of lending when it comes to EVs, energy efficiency equipment or they could at least theoretically be doing that when it comes to rooftop solar. All of these elements that need to be scaled massively. There's a new credit union, called the Clean Energy Federal Credit Union. That's available in all 50 states. Virtual online credit union. Anyone can become a member.

Jason Jacobs:                I'll have to link to it in the show notes.

Marilyn Waite:             Yes. We helped capitalize that and we're working with various credit unions, societies or associations, including one called Inclusiv, without the E on the end, to help scale what they're doing and help replicate what they're doing among the other 5000 or so credit unions. That's an example. We're also-

Jason Jacobs:                Is that earmarked? In that case if you support it, is it just a blank check or is it earmarked that it's got to be used in specific ways?

Marilyn Waite:             That is direct balance sheet capital.

Jason Jacobs:                Got it. Again, I've never applied for a grant before, this is just a newbie question, but if I'm building something, call it a company, call it a project, a non-profit, how do I know when it might be a good candidate for a grant?

Marilyn Waite:             Yes. It goes back to the unaccountability of philanthropy. Either the foundation has to tell you what it's looking for and not all foundations tell you. For this you would look at the strategy. We had very concrete key performance indicators or implementation markers. We had very clear action items.

Jason Jacobs:                But any company could just apply for a grant. They might not get accepted, but there's no rules. It's not like, "If it's not this class of organization, or things like that then it's not eligible." Doesn't work that way.

Marilyn Waite:             Right. At least not for this particular portfolio. I think different institutions have different parameters, criteria, rules. It's not standardized. I don't know if you ... in US there's I guess ... I'm forgetting the name of it, but when you apply to a university, there's a common application.

Jason Jacobs:                Oh yeah. I used that. It was as personal so I felt like my odds were a little worse, but for at least the schools I cared about less it was like ... and this was a long time ago. I don't know if it works the same way.

Marilyn Waite:             There's no common applications so to speak equivalent for all these different foundations. It's difficult to answer the question in general because it really just depends. There's a lack of transparency for many different philanthropic organizations. Some philanthropic organizations are private non-operating and therefor are required to report certain things to the IRS, but some are just LLCs legally. They just are private cooperations and they don't have to do that same reporting and they don't expect to have a tax break. Those kind of things. It's really the wild, wild west.

Jason Jacobs:                This is another newbie question, maybe it depends on the foundation as well and different philosophies, but in the venture capital world, which I understand better, you might have a fund that's X dollar size, and then within that typically the fund writes checks of between X and Y and they tend to come in at this stage. Do you have similar criteria or is it all it over the map? Within your area of focus, could you allocate across 300 grantees or 3 grantees and it's up to seeing what you like? Or are there constraints of ... or a comfort level that you try to have in terms of diversification?

Marilyn Waite:             In many ways what we're looking for is like a VC fund, I mean we're looking the quality of the teams. We know that there has to be pivots for any ideas and there's some similarities there. But when it comes to the standardization of those investment criteria, there's a lot.

Jason Jacobs:                Not just the criteria, but also the percentage of concentration. Could you put 80%-

Marilyn Waite:             And concentration. Yes. No.

Jason Jacobs:                You have liberty in that regard.

Marilyn Waite:             Theoretically a lot of liberty, yeah. My checks have ranged from 25K to 10 million. Single checks.

Jason Jacobs:                Okay. Switching gears for a moment, one of the stats that I heard in my journey, and I haven't talked to foundations yet, but I heard people ... you know who I heard it from primarily? Is people who depend on foundations for their funding. What they've told me is there's 18 foundations that are responsible of 80% of climate giving. Does that sound right to you?

Marilyn Waite:             Well I think if you define climate giving very narrowly that's probably true. If you don't look at-

Jason Jacobs:                But ... no finish that thought.

Marilyn Waite:             If you're not thinking about the 80 Drawdown solutions, the climate, that's probably true. If you're thinking climate is funding some kind of policy building exercise around clean energy adoption, then yes. It's probably those 18 funding 80%. But if you think of broadly about climate, then that's probably not accurate.

Jason Jacobs:                Let me think about how I want to ask this.

Marilyn Waite:             But those 8 ... sorry. Those 18 are probably communicating with each other a lot and they're probably more well-known, but I would say that's a certain perspective on what we need to solve climate change.

Jason Jacobs:                Well given how much we need to do to solve the problem and how behind we are, do you feel like philanthropy has a bigger role to play than it's playing today, and if so what's been holding it back?

Marilyn Waite:             Your philanthropy questions.

Jason Jacobs:                I try to ask in a way that I wasn't going to get scolded, but ...

Marilyn Waite:             Well let me say this. I started a book club at the Hewlett Foundation to first read Winners Take All: The Elite Charade of Changing World. Our second book was Just Giving.

Jason Jacobs:                I'm going to link to all these by the way.

Marilyn Waite:             Yes. Our third book was Decolonizing Wealth. All three of these books take a critical view of philanthropy. Especially, I mean, in the sense of institutionalized philanthropy, mostly from a western perspective, especially from a US perspective and the IRS tax code here. Let's just say I have a critical lens on that-

Jason Jacobs:                Got it. You ... Finish. Sorry.

Marilyn Waite:             Maybe I should've started with that.

Jason Jacobs:                Yeah. No, but that's new information. You are skeptical of philanthropy in general but you think that the Hewlett approach is different how?

Marilyn Waite:             We have term limits. We limit our power. We publish our strategies. We try to be transparent.

Jason Jacobs:                There's more accountability.

Marilyn Waite:             We create the accountability. There's no one that requires it from us. I mean the IRS to some extent because we're a private non-operating. We have this tax exemption, but that's very light. It's not the same thing as being a government or a business.

Jason Jacobs:                But you feel like your approach is the exception rather than the rule in philanthropy overall?

Marilyn Waite:             Well definitely the term limit part is definitely the exception.

Jason Jacobs:                Do you feel like your brand of philanthropy has a bigger role to play than is being played today and if so, what's holding it back?

Marilyn Waite:             I definitely think strategic climate work is needed and that needs to be funded on a much bigger scale. I'll say that.

Jason Jacobs:                Okay. Let's try a different question. What is the biggest thing holding back our ability on trying to make progress in solving climate change?

Marilyn Waite:             Thank you. Thank you Jason.

Jason Jacobs:                See, now we're getting to know each other.

Marilyn Waite:             Yes. Yes, sorry listeners, we should have prepared. The biggest things, I would bucket them into two, one is the politics in policy and the other is the capital. Literally. People have a key role in that. The listeners, individuals. On one hand it's the voting and on the other hand it's shifting your capital. It's choosing that sustainable bank. Those are the two things that have to shift.

Jason Jacobs:                I mean let's take each of those. Politics in policy, let's just go one level more granular. Where are we and where do we need to get to in that regard?

Marilyn Waite:             We're losing big time globally. Emissions are increasing. They're increasing in all the economies that emit the most carbon. Pretty dire.

Jason Jacobs:                How is policy holding us back and what type of policy should be put in place that would put us in a better position?

Marilyn Waite:             For example, renewable portfolio standards of 100% renewable energy, which incorporates serious storage. Likewise for transportation. Complete electrification mandates. Things like green bonds used to help build out charging infrastructure. Things like green bonds used to build out rail infrastructure in a place like the US. In places like China once again, that part's already been done. The high speed rail and that can always be improved or enhanced, but that's pretty well done. Regenerative agriculture being a big piece of this. Improve the sequestration in soils. Improving soil health. Helping farmers convert their soil so that's healthier so that it sequesters more carbon.

Jason Jacobs:                What type of policy would be impactful there?

Marilyn Waite:             Incentives and rebates for conversion, that's one. Mandating for example cattle. Mandating some kind of civil pasture. Providing the financing to help with not. Not just mandating but also providing the capital and incentives to make it attractive.

Jason Jacobs:                For these examples and for other types of policy that would be impactful that doesn't exist today, what is the biggest thing that could change that would help bring about more of the right policy?

Marilyn Waite:             Well I'll first answer what we don't need more of. We know exactly what needs to be done. We have done so much modeling, so many analytical exercises, we know exactly what we need to do technically. It's not more technocratic solutions or analysis, it is simply getting it done. It's the political will to get it done. It's partnership with communities, with businesses including financial institutions. It's a road map incentives and actions to get it done. It sounds so simple because it actually is. It really is that simple now that we know what needs to happen.

Jason Jacobs:                Then on the voting side, I mean if people do care, and they want to bring about more of types of policies, I struggle a little bit because on the hand it's looking at whose got the boldest plan. But on another it's about who has the best ability to bring about any plan and to make progress when it comes to things like putting durable legislation in place, which I guess debatably, but some people argue requires bipartisan support. How do you think about that in terms of the most impactful use of one's vote if you care about climate change?

Marilyn Waite:             If you look at certain economies like the United Kingdom, like China, like even India, there is broad nonpartisan support. It's not a partisan issue. There is nonpartisan support for keeping the planet. Do you want a earth? Yeah I want a earth, so let's get it done. Actually you see in the US when you actually poll the public, it's also nonpartisan. Something has happened, which is not representing the people across this particular economy.

Jason Jacobs:                What does that mean in terms of people showing up at the poles?

Marilyn Waite:             Yeah, it means you got to go out and vote for the people that are actually representing solving this and keeping the earth together, which means keeping the economy, keeping our families. It just has ripples effect throughout everything.

Jason Jacobs:                My last couples questions. One is just if had a $100 billion and you could allocate it towards anything in the climate fight to maximize its impact, where would you put it and how would you allocate it?

Marilyn Waite:             If I had how much?

Jason Jacobs:                100 billion.

Marilyn Waite:             100 billion. If I had 100 billion. Are you limiting me in terms of geography or where can I put it.

Jason Jacobs:                No, you can do whatever you want.

Marilyn Waite:             In any kind of climate solution?

Jason Jacobs:                Yeah. It's not US-centric, it's not-

Marilyn Waite:             It's just-

Jason Jacobs:                ... California-centric. Overall as a species.

Marilyn Waite:             Yeah, and my answer might be boring so I'm sorry in advance, but I would but them into sustainable banks. I would capitalize the banks who are going to keep this going. It wouldn't be a one off 100 billion, it would at least ... you would immediately when you put it into a banking structure, you have at least a ten fold increase, literally.

Jason Jacobs:                It sounds like I need to cover sustainable banks because you're not the first guest to bring up sustainable banks or green banks, and I haven't had on anybody that represents that perspective. If you have any ideas either now or once you have a chance to reflect. That'd be an interesting topic.

Marilyn Waite:             Yes. I know all the sustainable banks.

Jason Jacobs:                I don't know any.

Marilyn Waite:             There's an organization called the Global Alliance for Banking on Values, completely global. Literally dots on the map on every continent. Their memberships represents a lot of the banks that are getting this job done. There's those kinds of banks. There's also the Clean Energy Credit Union, which I mentioned, which is a startup. But you have larger banks that can finance larger infrastructure projects and you have smaller institutions that can also finance smaller distributive projects. But regardless, I would funnel it through that way. That way the lending can happen in perpetuity so to speak.

Jason Jacobs:                My last question is just for any listener that's trying to figure out their own lane. There're concerned about this problem and they're trying to figure out how to help. I know you mentioned voting as a big thing that they could do and maybe that's the biggest thing. But other than voting, what other advice do you have for people trying to figure out how they could have the biggest impact on helping with this problem?

Marilyn Waite:             I would move your cash into a sustainable bank. That's what I would do because that is a one time thing. It's a one action and it has ripple effects that permeates throughout all these solutions to climate change.

Jason Jacobs:                Wow, you've given me some good homework. I got to go and dig into that topic because I don't know much about it yet, but it sounds important. Worthy of exploration.

Marilyn Waite:             Yes. Worthy of explorations. I have a website that has some links to the other-

Jason Jacobs:                Oh yeah? What the website?

Marilyn Waite:             It's just marilynwaite.come and there's slash to sustainable banking and investing.

Jason Jacobs:                Awesome. Anything that I didn't ask you that I should've or any parting words for or listeners or for me?

Marilyn Waite:             No. Thank you for inviting me.

Jason Jacobs:                Well this was awesome. Thanks so much for coming on the show. I learned a lot. You've given me some good homework and thank you for all the work that you do. I wish you every success.

Marilyn Waite:             Thanks.

Jason Jacobs:                Hey everyone. Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us on myclimatejourney.co. Note that is dot C-O, not dot com. Someday, we'll get the dot com, but right now, dot C-O. You can also find me on Twitter @jjacobs22 where I would encourage you to share your feedback on the episode or suggestions from future guests you'd like to hear. Before I let you go, if you enjoyed the show please share and episode with a friend, or consider leaving a review on iTunes. The lawyers made me say that. Thank you.