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ZEUS: Wall Street's A-team starts to line up behind climate investing
Hank Paulson's appointment as chairman of the TPG Rise Fund a signal that ESG investing momentum may just be starting
(David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is the former president of the World Editors Forum, Editor-in-Chief of USA Today and MarketWatch, and CEO of TheStreet Inc.)
SAN FRANCISCO (Callaway Climate Insights) — The instructions came late in the evening on a snowy night in Davos years ago. Go to this address at midnight. Take a funicular up to this hotel on the mountain. Walk to the second floor and out the back, 100 yards up a hill in the snow. Knock on the door of this private chalet.
I had been asked to come see Bono, the U2 star and regular celebrity at the World Economic Forum in Davos, Switzerland. As editor of USA Today at the time, I was sought out so he could make a proposal to collaborate on a publicity campaign for his RED movement to fight AIDS.
Instead of Bono answering the door, I realized I had arrived at an after-party for Bono and about 100 of his greatest and good. Will.i.am was across the room. Maria Bartiromo was in the corner. I reached for a glass of wine and stepped back on someone’s foot. Bill Gates. Then Bono emerged from the crowd in classic late-night form and made his pitch to me for five minutes — a good idea, it turned out. We did the campaign but I never saw him again.
I’m reminded of this story by news this week that Bono has convinced Hank Paulson, the legendary Wall Street executive, to return to the limelight and chair the TPG Rise Fund, a San Francisco fund dedicated to climate solution investing. Paulson, in my opinion, was the key figure in saving the U.S. economy from financial ruin a decade ago during the great financial crisis. As Treasury secretary at the time, he and Federal Reserve chief Ben Bernanke orchestrated the Wall Street bailout that prevented both the banking industry and money market industry from collapsing.
The former Goldman partner has been semi-retired for many years, working on his non-profit, but he’s always been an advocate for fighting climate change. In an op-ed for the New York Times in 2014, he argued for a tax on carbon emissions to fight the “climate bubble,” comparing it to the great financial crisis in terms of risk.
At 74, it appears Paulson’s making this move as his last major play — and likely the most important one of his career. In doing so, he joins a growing A-team of Wall Street executives who are staking their legacies on financing solutions to climate change. Not philanthropists. Investors and regulators.
Larry Fink of BlackRock. Axel Weber of UBS. Chris Hohn of The Children’s Investment Fund. Mark Carney, former head of the Bank of England and Bank of Canada. Janet Yellen, former Fed chief and incoming Treasury secretary. Anne Simpson of CalPERS. Mindy Lubber of Ceres. Bob Gitterman, former Goldman risk partner and chair of Kepos Capital. Jean-Laurent Bonnafe of BNP Paribas.
Even Warren Buffett, the old Oracle of Omaha, has boosted his investments in renewable energy companies, not out of some flash of altruism but in pure pursuit of profit. Wall Street leaders travel in packs. As this pack grows with names like Paulson and Fink, others will follow.
The TPG Rise fund itself, based in San Francisco and Fort Worth, Texas, is made up of heavy hitters in the next phase of their careers, such as Jim Coulter, Maya Chorengel, Steve Ellis, and Mike Stone.
All of these folks — and most of you, dear readers — remember the tense days in 2008 after Lehman Brothers collapsed, when the stock market was swinging 700 or 800 points a day and the global money markets were paralyzed. Thanks to leadership from Paulson and Bernanke and others, we survived, and have since seen one of the greatest bull markets in history.
The climate crisis threatens to dwarf that. Worse, it could play out in slow motion over years, or decades. But the investment minds lining up behind a transition of the financial system to fighting climate change could also lead to opportunities for entrepreneurs and investors not seen since the dawn of the computer age, or industrial age for that matter.
Bono has a way of surrounding himself with people who get things done. Whether in a chalet in the mountains or in organizing global campaigns. This one may be the biggest yet. But the team rising to the challenge grows stronger every day.