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Bruce Usher

lines on the record: 80
first: 2024-07-07
most recent: 2024-07-07
sittings or episodes: 1
sources: podcast

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“Well, I look forward to more conversations in the 20 years to come. I'm really excited to talk. It's terrific. Thank you.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“We don't debate gravity. We do debate maybe how we prioritize how to address it. I get that. People say, look, we can't spend so much money on hex now because we need more to unwide because, you know, we got some short-term challenges. Those are worthwhile debates to have. That makes sense. Prioritization issues. But as to whether or not we should care and not care. This is real or not real, that's a waste of time. And the biggest problem we have here is time. You know, if we just get on it, we're going to be in good shape. If we keep having these ridiculous whitical and emotional debates and talk about the environment as opposed to talking about the economy, for another decade or two, then we'll live in a whole wheelie or really find ourselves in the best part.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Start to do the math and think about the numbers and so on. A couple things come to light. First of all, you start to make it much more objective than emotional. I think that's really important. Secondly, you start to understand what the problem is. You can frame the problem. You can also start to frame and understand the solutions, what's going to cost us. How do we reduce those costs? How do we deal with it? And I think moving it from the environmental realm and sort of the emotional subjectivity of it to the more objectivity of business, first of all, I just think that's much more practical to address the problem. But I also think it gets better outcomes because this is the crazy thing about climate change. It's the last point I'll make is it shouldn't be a political issue. We shouldn't be debating about this. There's really very little to debate about it. It's very clear what's going on. I use the example of physics like gravity.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. So if I was in climate change at the business school here, this is our home where I work because ultimately it's a business issue as opposed to some other environmental issues. And I think it's important to sort of separate those a little bit. So the number of environmental issues that people care about greatly, and I understand why maybe things like, for example, wildlife protection, right? And, you know, should we have regulations to protect certain species? And how strong should it be? Are you allowed to build things like that? I get all that. But that's a really different issue. That's really much more sort of an ethical issue, an environmental issue. What do we care about and how do we deal with that? Climate change is different. Climate change at the end of the day, it's an economic problem. It's about how do we produce goods and resources and services without this unfortunate byproduct, these greenhouse gas emissions that come with it. And so if you look at it through an economic or business or sort of financial lens and start.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Government policy is true when it comes to God policy because you can make a lot of mistakes and back industries that are wrong ones and money gets wasted. The other thing I like about the policy is they're not picking a winner in there. There's support for virtually anything, any technology, any industry that's part of these changes that are coming. And they're kind of spreading it around. And I'm like, that's the right strategy because we don't know exactly what's going to dominate. Maybe it'll be small nuclear in the future. Maybe it'll be direct air caption. Maybe green hydrogen. Maybe it'll just be wind and solar is going to continue to be our main thing. There's support for all of that. And I think in a very clever design. So, you know, Gore Stammers may be a little bit hyperbolic, but I agree with the sentiment for sure.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“It's competitive positioning versus the rest of the world. And so the Europeans are now trying to implement a similar bill of their own. There's something in the parliament that looks a little bit similar. And of course, China also is trying to understand how they continue to compete. And this is the world that we're in, the world we're going to be in the future. So I think it's tremendous piece of legislation, not just because of climate piece, but”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“That were protected, that our nation industries are protected so they have time to grow, to get to scale. If people do build these businesses and assign products in the U.S. that they use U.S. manufacturing and U.S. labor and the like, it's a very protectionist policy based on the idea that this is the way the world's going. And so either we can get ahead of it or not. And when it was first passed, of course, I was here at Job O'Brien J's and myself are obviously very, very pleased to see it from the client perspective. Also pleased to see it from the economic perspective because I'm American. And we also assume that the Europeans and others would also be thrilled to see it because finally the US is stepping up to take real leadership on climate. And of course there was a moment of happiness and then they kind of freaked out because what they realized is this is economic policy. This is competitive. This is how the US is going to accelerate.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Is quite a quaint. Here's what I think the inflation reduction. First of all, why is there more government policy? It's not just the US. Globally, we see more policy because of the other trends, right? When you start to see physical climate change, when you start to see changing social norms and these innovations, governments doesn't react very quickly, but it sees these changes, politicians see these changes, they see what's happening, and they eventually start doing something about it. And that's what we see happening in the inflation reduction act as an example that what's really important in the inflation reduction act is yes, it is addressing climate change, but it's also a economic industrial policy bill and on a scale that we haven't seen in a long time. In other words, what it is is the government saying this is the way in the world's going. The US can either be a leader or a follower in this. And if we follow, it's going to hurt our economy. We're going to be behind on things like logic vehicles and energy storage and the like. And it's time that we invested so that we're in front.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“American politics. All politicians, everyone on the planet. We only have one objective, which is to get power and to keep power, and whether they're in a democracy or an autocracy. It's the same strategy. And it's always short term. That's the world they'd have it. So these are all the big challenges. But I do believe we'll avoid catastrophic climate change because we are very smart adaptable species. And so we will eventually decarbonize the economy. We'll probably eventually have to do a lot of direct air capture just a pool, CO2 atmosphere, which will be costly and challenging to do. So in other words, we'll do a really crappy job of adjusting this problem, but we'll eventually we will avoid a catastrophe much as we did with COVID. We did not do very well, but we eventually got our act together and it still exists, but we've managed to live with it.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“So, my response is two and fourfold. First of all, we can at Wait Cast off Climate Change. I mentioned at the beginning of our discussion that we have the technologies by and large. We're bringing on the ones we need and we have the capital and we have the ability to do this. That doesn't mean we will avoid cash officer climate change because as a species we're not very good at dealing with long-term challenges. Look at immediate challenges like COVID. We certainly didn't deal with that one too well until we finally did. And in some ways The way COVID played out over a couple of years in some ways climate change I think has played out over multi decades. In other words, we're getting to a really poor job of addressing these because the human species we don't cooperate well as they cross nation states only within our countries. We're slow to invest because the uncertainty makes us nervous and so on. There's other challenges and the political challenges they are politics is just very short term. And when I say we, by the way, I don't just mean.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“China, and it's going to be tougher and tougher competition going forward. And then lastly, Tesla has a couple is they still have some upstarts like Rivian. I think at this point, we're not going to see too many more disruptors trying to answer that the automobile market is now way too gravity. Maybe Rivian will be the last successful one. So a lot of the game is not the one that Tessa was playing five, ten years ago. They've been awfully fortunate. That's such a longer run way to build and protect the moats around their business. But it's going to be pretty, pretty brutal going forward. I think Tess is going to continue to do well, though. They build such a good product and such a good strategy, but it's hard to know if they'll remain quite so dominant. That would be really something.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“That's such an interesting question. It's so hard to answer. I think it's shocking how Tesla has managed to maintain its lead. They've made some very smart strategic decisions over the years, and the comic car companies have just been so slow to really enter the market. That being said, Tesla faces two problems. One is the incumbent car companies that we're familiar with, Ford GM, BMW, Mercedes. They are rolling out dozens and dozens of pretty attractive products, right? So I can't say if they're necessarily better or not better, but there's now serious competition at Tesla didn't have before. And the second thing for Tesla is the international car companies that have not traditionally competed quite as much. And I'm thinking about BYD, particularly Chinese companies. Now, they may not compete much in the US. They're not here in the US yet. They might do one day. Conversely, Tesla isn't.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“I said, I don't even need, I'm not trying to convince consumers to go out and do things that are going to hurt them financially, hurt them in the pocketbook or, you know, make their lifestyle less enjoyable. What I'm saying is take the time and effort. And by the way, it does take time and effort to educate yourself. And ideally do things that you know worse off. And actually, you might turn out to be better off. And in the worst case, you're at least going to feel better about what you're doing. Right. So if you can get electricity from solar at the same cost or hopefully maybe even less, you should do that. That's going to take you a little bit of research and look at that. And the same with EVs, right? So if you are in the market for a new car, you know, take the time and go drive some EVs, check them out, dude, do your research. And maybe at the end of the day, you're like, no, I'm not ready for this car yet. Next go around, so I'll be there. My guess is you drive a few EVs and particularly right now because the prices have come down a lot. You know, you walk in the showroom, if you're, if you're going to.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Number one, I'd say the advice I gave is just be informed, like this conversation we're having. There's so much misinformation out there. And it's just important to understand what's going on. Because if you understand what's going on, you'll make better decisions. And make decisions that he's not to do something, but if you're informed in a year, two years from now, you'll be ready to make a different decision. The thing I would say is that as consumers, the two big decisions you can make that do have impact today are around how you source your power, your electricity, and your automobile. Unfortunately, as I might tend to do around flying today, you can buy carbon credits, but it's probably not going to make much impact. Sourcing your power, you may not have much choice. But if you can use solar, where that's panels near roof or community store, which is pretty popular here in the US, that's a good thing. That's an impactful thing to do. And again, I'm not saying you should go out there and spend more money than you would otherwise and increase your electricity bill. You should be able to do it essentially no cost. Because the key here is not to get consumers.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“And it's always easy, right? Because some of these technologies are pretty exciting. I think most investors, you know, they'd like to have impact on climate change. Now they're doing the right thing. And I think it will be easy to caught up. And then management teams themselves will stir it up. I mean, some of them are, you know, most CEOs, especially of, you know, early stage companies, they're pretty good evangelists about their business. And evangelizing about the business is great, evangelizing about climate change and the business. It gets a little, you know, these things connected that can confuse people.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Well baked. You're making a huge mistake just because it's got a positive for the climate does not make it a good business. Start with find a good business that's a positive for the climate, not the other way around.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Very sophisticated device, but it's a thermostat. And it has a package in a way that's very, it's more beautiful. It looks better on your wall, right? Consumers like that. They want to put something nicer looking on their wall, like a thermostat. But embedded in it is the technology that is more efficient how to use electricity in your house. So those sort of products, don't try to change, radically change consumer behavior or you'll never get there. Those sort of things are important. And the third last thing I say is important is climate business is a business. Cash flows to really matter. Funding cycles matter. Really strong management teams matter. That's all the prerequisite for success. The decarbonization part of it is the icing on the cake. And if the business itself, the cake is a really, really well.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“And often disappear on you politically, things change rapidly. So betting alcoholics, especially betting on political decisions that have yet to be made, like betting on government, the government's going to put a price on government. The government's going to, no, they may or may not, but don't make an investment based on assumption about policy. The second thing is be careful make any investment around assumptions around changing consumer behavior. Consumers just don't change that easily. None of us do. I don't. And so the best products or businesses are those that present this consumer as something that they really like. It might be a little different than what they've had in the past, but doesn't entirely change the way they do things. I think about the Nest thermostats. I don't know if you remember that thermostat that came out of Domstey ago. You know, we've all had thermostats at Home Street many years. And these funny little devices, these sort of ugly little devices, NASA's.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah, exactly. Don't give me alluring. I'm just trying to put some information. Cool. First of all, I'll say most of my investing in this space been early stage investing. So it's an adventure, business start, I started some companies. And that's always highly risky, right? No matter what you do. And some investors worked out very well and some have not. Here's what I learned in a couple of generalizations. They do think are really, and they've helped me and may help others. One is to be very wary of policy support. So many of these industries start with government policy or they accelerate with government policy and there's a good reason for that because without the policy there's never they would never would get started. By the way, that's not unique to climate change. You know, look at many tech industries, there's often some government initiative behind it. And that's really important. But there has to be clarity on how that business or that technology continues to be commercially successful when the government policy goes away. You can't rely on government policy for too long because it'll change.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Ultra long term, ultra comfortable with risk. You have to have very sophisticated resources, whether you're self-expertise or more often, you know, access to expertise to evaluate. Can you imagine Nufbia Bill Gates, a big investor? It's called SMR Nuclear, small molecular reactors. Very interesting new technologies coming into the nuclear space. But there's not just one type SMR. There are many different types. Each one has tremendous complexity around it. How do you evaluate which of these makes sense? And then most of this stuff, as I mentioned, is venture investing. It's private. So first of all, you need access, but even if you have access, being able to judge these investments is very, very challenging. But I do think it's important. I think it's important to mention, first of all, if we understand what it's all about. And secondly, because you have these investments can really move the needles. So they are important.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“That's right. Now I do want a caveat by saying Bill Gates put a billion dollars on breakthrough initially. I think he's put more into that, probably because they can, right? Most of us cannot put a billion dollars into investments that may never return a penny. But I suspect some of the investments are going to do very, very well. And that's the impact first investing is all about.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Hard to know where to vet. And the reality is most of those investments, the risk adjusts or return is not acceptable. The timeframe's too long. Most fiduciaries cannot put capital into impact first type investments. So I put that as a special category, but for those investors who have the luxury of maybe being able to take on additional risk or shrink multi-digetal in terms of their returns, then sister edgy they might want to consider as well.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“The second strategy. The third strategy, I was going to mention it, though it probably doesn't apply to many folks, but I think it's just worth mentioning. We call this impact first. This is a strategy mostly only for high net worth or ultra high net worth individuals. And this is putting capital to work into climate solutions, companies, products, often a venture capital world that are extremely high risk, extremely long term. They may never be commercial successors. But if they are, you know, these might be next trillion dollar companies, so to speak. And we reason, we call this impact first, is that these investments are what could really move a needle on climate change, things like you mentioned green hydrogen early on our talk, right? Green hydrogen is a very complex, very risky area, but capital work, but it could turn out to be, you know, this might be the next oil and gas industry to screen hydrogen industry. And by the way, a lot of oil and gas companies are pretty interested for that reason.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“It's all boring utility. It's now the most valuable utility in America. It's also the biggest owner of renewable assets in America. And that's what's certified. So it's different to go now. Think about thematic investing is it's greater risk, right? In this case, you're making a more concentrated bets on specific factors of the market or specific companies. And with that concentration comes much greater risk and much greater potential to performer underperform the market. I would also say that this is where you also have impact, though. So if you're comfortable with the risk and you feel comfortable making those decisions, that capital is what's changed in the world. It's that capital that's back in companies. So they're going out and actually decarbonizing the economy. And so from an alignment of both trying to make an investor and feeling your impact in climate change, this is where you're really going to have that nice alignment here. So that's a sense.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Pretty solid, what you're not going to get also is great outperformance. It's going to perform roughly the market. And suddenly, you're not changing the world by doing this. You just protect yourself a little bit. You're going to feel a little better, I think, about what you're doing here and investing. The second strategy is the one you touched on a few minutes, go with thematic strategy. So this is where you're like, you know, I see where the world's headed. And I want to put some capital work in claim solutions, stuff that really is changing the world. And by the way, if I'm good at it, I might outperform the market because if the world's going to change that way, I had to pick some of the future winners, right? I'm going to figure out which companies are heading the right way. I'm going to put money to them and they're going to do really well. This is what we call thematic. So you can put you can buy an ATF that buys clean energy stocks. That's all they do. Or you can buy, you know, specific company stocks. You know, if you invested, obviously, in test volatility years ago, you would have done very well. You can also invest in a company that's much less well-known, like next era. It was a...”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“First of all, you might be happy anyway given the way things have gone. But more quickly, if you start to look at the entire, first of all, if you look at just the stock market, you're highly exposed to these tech stocks, these really expensive tech stocks, right? That's just the market that we're today. So if you don't want to expose that, you got to, you know, invest in a different market, frankly, or really pick carefully. What they're doing is they're not saying, well, in the broad market index, you're getting this. And now these ATFs are you only exposed to half the market or really different exposure, they look an awful lot like the market. They're just very carefully picked out the most polluting companies essentially and replaced them with similar beta companies. It looks and acts a lot like the market. They really do. And yeah, I'm actually with those. I'm much, I'm not concerned that you're going to have some sort of terrible underperformance, maybe a few basis points. So a few basis points down. I think they're.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, but most of these, the more that most of these I'll try to index funds are structured is to perform the market and not underperform. So what they're doing is they're picking stocks that are very similar betas. Fossil fuel stocks. Similar performance characteristics, less exposure to emissions that they're doing. And I think some of them are pretty cleverly structured. Now, there's no guarantee that eventually outperform. But I think there is some good cushioning there. I do believe there's risk protection to clients.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“So over time, as you start to move away from fossil fuels, that index should protect you a little bit. So that's one group”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Strategy. And there are plenty of ETFs or funds that do that. What I would say to investor is don't get wrapped up in some sort of marketing pitch about how this fund is clearly going to outperform the market. A lot of ESG marketing is how we're going to, this is wonderfully going to beat the market because of ESG or get wrapped up in the, you know, you got to change the world through this. Neither of those by correct. But there's a lot of evidence, research that shows that you can very easily reduce your exposure to companies that are very high in pollution or very exposed to climate risks and still get complete market exposure. So as SP 500 or broader all rope index and the like. And I'm not going to pick a particularly ETF to suggest, but there's a bunch of them out there. You mentioned a state street, you know, fossil fuel free. Sp500 and his track, S&P 500 broad index almost exactly. But there's no fossil fuels in there.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. So when we first preface by saying that, you know, when it comes to predicting climate change, impacting the economy, decarbonization, things like, you know, the transition from fossil fuels to renewables, honestly, that's not too hard to do. I don't want to downplay my job, but it's not that hard a job. Picking investments, beating the market, this is hard too. Let me absolutely try. I want people to think, well, obviously this is easy stuff. It's challenging. What I would say is I would look at this sort of for three in three different ways. The first is for the investors as look, I'm concerned about this. I'm thinking long term. I don't want, I'd like to minimize my risk. And also in mind feeling that I'm, you know, kind of avoiding stuff that's going in the wrong direction over a long period of time. And that's where you get into a little more of sort of a divestment or ES.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Totally get the acid value really low or it's modest, but in the next several years it's not going to make that much difference, obviously also depends what kind of investor you are. If you're a day trader, it's irrelevant, right? If you were a typical, I would say fund manager, you know, a couple of year horizon, it starts to become relevant. And if you're someone who's sort of planning your retirement or pension funds, probably these factors are very relevant. And so timing is a big deal here.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Now, just to be clear Sometimes, hear people say to me, Well, climate change, you know, it's going to wipe out all these values. And I wouldn't ever touch this sector or that sector. And that's not true, right? We do have to put everything in the context of materiality. And so for some businesses, these factors aren't. Material at the moment. You know, we talked about Apple before. Apple is not terribly exposed to climate change, and they can afford to decarbonize. Other companies are very exposed. And so we do need to make sure we understand the materiality of the problem, both today and in the future for different businesses. It's not always the same.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“And incorporate into our analysis into the math. And it was so far away that it doesn't really affect asset values today. So you go, not much to worry about. Well, that tragedy, the horizon, that horizon is now much closer. And we're now starting to see it affect asset values. And we're starting to see how that risk is becoming real. And to your point, to quote from Life Ang, climate risk is investor risk. And now those numbers are starting to show up.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“We'll never care for the fact that, or really, the health bill that's associated with him is outrageous. But, you know, it's a pretty argument to say at some point, you know, the chickens are going to come home to roost, so to speak. Yeah, we should care about that. And one day that's going to affect that business. Now, if you think it's going to be decades in the future, you may say that you're right, but it doesn't matter to an investment perspective because anything decades in the future does not affect really the value of an asset much today. It may be real estate. And that's really come back to climate change. Because up until pretty recently, everything was too far in the future. You know, Mark Carney, when he was governor of the Bank of England, he made a famous speech where he talked about what he called the tragedy of the horizon. And what that is, a play on the words, tragedy of the commons, which is to describe the climate change problem, but tragedy horizon was climate change was felt so far in the future at that point that even if you were an investor, even if you had a lot of thinking and go look, this stuff is real and serious and we got to think about it.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Well, exactly right, and Shiva's analysis and his articles is a little bit, you know, he's pushing a point pretty hard. And that's his style. And I like working on it. What is she about? But I think fundamentally, I completely agree. And that's kind of what ESG comes down to is what are the risks to the business because of these other factors that currently, historically have not been priced in. And maybe will never be priced in, right?”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“All the ESG is people aren't doing enough of it. They need to do it better and harder. Well, that's just misunderstands what ESG is all about. And then there's another group who are saying, you know, the problem with ESG is it's taking money away from fossil fuels and it's hurting the economy. And that's not true either. It's really just the market. It's the investors trying to be a little bit smarter, recognizing that the world where is more complex than the world as it was because these factors really matter. They mattered to business. They mattered to the economy. They mattered to society. And in the future, they're going to matter even more. Politically, it's now been politicized completely. And at this point, I think it's, you know, I wouldn't bother me if I never heard the letters ESG ever again.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Has it ever fled down yet? How often does it flood? How bad is the flooding? Is it going to flood more in the future? Is there a sum pump to reduce my risk? You're a fool not to check out the basement. And that's kindly what the concept of ESG is. Now here's where it gets misunderstood and a little bizarre. The idea of ESG has also been taken up by those who care about climate change and other issues to say ESG is a way of helping solve climate change because the whole concept is to move capital into companies that are going to address climate change. And that's not what it is. And so there's this idea that ESG somehow is going to put all that capital where it needs to go. That's not ESG. And so there's a lot of people sort of on that side of the argument saying.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Because in the world we're in today, the modern economy conning we're in today, those factors can really affect asset values. You know, 50 years ago, the most shares traded based on book value, the actual physical value of the assets. You just sort of added up, you know, all the buildings and everything. That's what the company's worth. Today, most companies that value is intangibles. If you look at the S&P 500 or something like that. And ESNG factors can really affect intangibles. They can really affect brand value, they can really affect risk to businesses and the like. And so it's kind of a smart idea. Or to put in like really simplistic terms, you know, it's trying to buy a home, let's say a second home, a vacation home. Let's say it's a place that's perhaps exposed potential flooding. You know, I should probably check in at the house, go down, open the door, go down the basement.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“It's pragmatic. So, what's going on yesterday is both fascinating because it's so bizarre and also a little depressing because it's so misunderstood. So let's first again step back. What is the issue? The issue is simple. It's a very simple concept. So simple. It didn't really get much attention, which is if you're an investor and you're considering making an investment, you're going to presumably do a certain amount of analysis. You're going to review the financials of whatever that asset is, it's a stock or a or a building. You're going to look at the quality of management. You're going to look at competition. You're going to look at growth trends, all that stuff. All yes she is, it says in addition to the analysis, you should also consider what's environmental factors are going to affect that asset value, what social factors might affect that asset value, and what government's issues affect the asset value. That's all. Just do a little more analysis. Do a little more work. And that's smart.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“And I think it's fantastic these companies are coming out with net zero players. Not because there isn't a lot of problems with him, but because it's forcing them to the very least try to understand what's going on in their business to reduce emissions. And at the best, actually take action at works to reduce their emissions. And there's a lot of examples in companies that have reduced emissions, truly reduce emissions pretty quickly. And, you know, at the end of the day, climate change emissions are mostly a result of business activity. Businesses emit most emissions and more importantly, businesses have the solutions to change it. As consumers, we can change their behavior a little bit. I can bike a little more. I'm a big bike here in New York City, but that's not going to make a difference. And what's going to make a difference is companies coming up with products and changing their business methods, their supply chains, doing things that reduce emissions. And so if a net zero pledge is what gets a company to really work on that and talk about it and report on it, I think that's absolutely fantastic. That's just what we need.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Think there's a certain amount of accidental greenwashing. What I mean by that is companies, they have a plan, but there's a lot of uncertainty about how to decarbonize certain industries, things like steel and cement. These are very complex actually carbonized. They have a plan and they get out there and they start working on that plan and they realize they made assumptions that weren't correct. And that's not because they're foolish. It's because there's a lot of complexity to these technologies and this innovation. And then they get there and they realize the plan isn't going to work the way they thought it was going to work. And so they made a pledge. And I was at greenwashing or they're trying to do the right thing and it's just not working out the way they'd hoped. So you got a lot of that. I think a lot of that's going on as well. For some companies, this turns out to be harder than they realized or more complex. So I think what's going on with companies are doing it because of all the pressure they're seeing. Also in certain parts of the world, like Europe is a real regulatory pressure as well.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Of a wealthy company, so they have a capital to do this, right? For them, it's pretty straightforward. Ben, you've got other companies, airlines, American Airlines, and so on, which are making these pledges. How are you going to go on the assumption that they want to make the pledge? But there is no clear path for them to do so at this point in a way that's clearly going to reduce emissions. I mean, there are sort of workarounds using things like carbon credits, but those are a whole raft of issues as to whether or not those are actually effective and so on. And then there's companies, all the companies in between that are doing various amounts of greenwashing. They use that term. And it's rampant because, you know, there's no regulation around these zero pledges. If you make a promise, and it's prolonged the future and you don't read it, there's really no penalty. And it's just such an incentive to at the very least exaggerate where you plan to do and worse will I. So there's a lot of that going on.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Right. That's right. I talked a whole course on this yesterday. It was pretty interesting three hour discussion with my business school students. And all the issues you raise are correctly. So in other words, you've got a lot of companies making these pledges. Why are they making these pledges? Because they're feeling pressured to do so in various ways from a various stakeholders and employees or consumers. It seems to be just kind of a smart strategic business decision. Some of them in doing so have a pretty clear plan on how they're going to decarbonize. Generally speaking, because they're in industry where it's not so difficult to do it. So, you know, you look at Ameta or an Apple or a company like this. Most of their emissions are from electricity use. And the way they assolt that is to invest in renewables. In fact, they're even investing 24-7 renewables, so they're figuring out how to get power 24 hours a day. And first of all, they know how to decarbonize. There's a clear path to doing so. And these are very, very profitable.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Is and how much is helping to address climate change and so on. And you ask yourself, you know, why did they put that on a wall? Like, well, if it's to do with the taste of my coffee? And the answer is because consumers like it. They prefer it. Now, the evidence is consumers are generally not willing to pay much more for it. A small number of consumers are really, really willing to pay up for sustainability of climate change. But most businesses sell a product that's kind of fungible, kind of commoditized, you know, coffee. There's a lot of good coffee out there. And so you'll see companies more and more competing on sustainability attributes because it's what their consumers want, what their customer wants. And so again, this driving more investment and more change at a business level. And then you got investors themselves, right? And we've had this increasing almost a wall of capital looking to invest in companies that do well in these issues. And part of that's the whole ESG movement, which is another”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Because it's a morally right thing to do. It's because they see the world as it is and where it's headed, and they realize this can be a really important thing for them personally and for their careers and their businesses. So that's anecdotal. There's a lot of research showing a couple things. One is that employees looking to work in companies show a marked preference to work for companies they believe are sustainable. And there's a lot of reasons for that. But at the end of the day, getting the best employees of a competitive advantage for companies, all companies compete for really good employees. And that's a big trend. And it suggests that that's not going to change anytime soon. Employees wanting to work for Sample College makes companies take more action to be more sustainable because they want to get the best people. Similarly, we see that on consumers among consumers, you know, you walk in a coffee shop and there's big things to wall about how sustainable their coffee.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“It's been a big evolution in norms, particularly among younger people. And I think a lot of that is recognition by climate change is real back to the physical manifestation and recognizing that their generation is really going to have to deal with this for better or worse. And I've had an anecdotal experience through teaching smaller classes in this area to this year in Columbia Business School, which by the way is a pretty traditional business school, right? You know, one of our many claims of famous value investing and, you know. This is far from a radical liberal business school or very, very major, we're very large business school. When you introduce a new business and climate change course this year, and we'll probably have half the class take the course this year, and we would have even more if I could just find more professors to teach it. I mean, it's massively oversubscribed. And that's not because students say, oh, I have to take this.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“First of all, it's a very powerful wife, right? And it's pretty hard to disagree with that line. I agree with it. And so to me, it comes back to the values point. In other words, if you feel that your values are, I don't want to be part of making a situation worse. In other words, I don't feel my money should be going in this direction, then don't do that. That's absolutely, I totally agree. And I can see why people would feel, you know, profiting off of additional greenhouse gases for many people is morally wrong. I support that. But divestment, I go through a book much, much more detail. I've got time for you today doesn't really make any difference in terms of reducing emissions. You're not going to reduce emissions by not investing in an oil and gas company and can be counterproductive. As Swanson pointed out, you no longer have a vote. You can no longer talk to management. You can no longer sway management. There's some reasons to think that traffic.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“To invest in the product. And if it aligns with your value is not to invest, you should go ahead and divest. But don't think by divesting your solving climate change because you're not. But there's nothing wrong with doing it. I think there's good reasons for it.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“Now, I want to say, William, that doesn't mean that I totally disagree with the idea of divestment. Okay, in other words, if an investor feels that they do not want to invest in fossil fuel companies because their values are not aligned with that, then I say, why would you make that an investment? Don't hold those stocks. Don't hold those companies. I mean, I don't smoke. I'm not a huge fan of smoking. It's really nice to go to bars, restaurants in New York City since the no longer allow smoking in them. I'd prefer that. And, you know, I don't really want to put my money into Nago company. It's not me. And so I'm perfectly fine with not investing in tobacco. And there's plenty of people who feel sort of the same way about fossil fuels. Now, fossil fuels are a little bit different because even if they're divesting, they're almost certainly still using the product because they don't have a substitute yet. And again, my example is flying. If you fly on a plane today, you're certainly burning. Jet fuel. But that doesn't mean you have.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT
“And so the real impact here is not the moral and bad and it's not the capital impact. It's the product impact. I mean, Tesla, I don't even say about whether Tesla's today a good investment or not a good investment or how Elon Mas is spending his money, but I will tell you that what Tesla has done to change the arc of emissions is really incredible. And LBD and other companies, they're certainly not alone anymore. Because now people are buying electric vehicles instead of internal combustion engine. And that's how you reduce fossil fuel reliance.”
2024-07-07 · We Study Billionaires · RWH047: Investing In The Era of Climate Change w/ Bruce Usher · IDENTIFIED FROM THE TRANSCRIPT