 I am very excited to be able to introduce Alicia Seiger. She's a lecturer at the Law School and is the managing director for both the Sustainable Finance Initiative and the Steyr-Taylor Center for Energy Policy and Finance. Her work focuses on business and financial innovations to accelerate the transition to a decarbonized equitable and climate resilient global economy. So welcome, Alicia. We're very happy to have you. Thank you, Kate. And thanks, Arpta, and the whole pre-court energy at Stanford and Slack planning team. Really nice to be with you all today. And thank you all, you students, for showing up. It takes a lot to come to campus a week before classes start to do this program, and especially in this current environment. I really feel for you all having to endure COVID at this time in your lives. And that, on top of our countries, struggled to reckon with hundreds of years of racial injustice. And had some wildfires on top of that, and it's really quite the cocktail. So I was thinking about when I first started at the GSB many, many years ago, all I had to contend with was math camp and moving my stuff from San Francisco to Palo Alto, where I grew up. So I feel for you all. And I hope you're enjoying the program so far. And I look forward to spending the next half hour with you. So I know this is energy at, but I can't separate energy and climate. And as my title suggests, that's entirely what I'm focused on. So I'm going to walk you through the changes in climate over the last 40 years in one triptych and very briefly. In 20-year increments, just to help set the stage and contextualize why I'm talking about sustainable finance. So in the period of 1980 to 2000, that 20-year period was really characterized by questions of science. Is climate change real? What's the mechanism? And we've largely settled that question. And then we moved on to this question of, and I should add that Stanford researchers have contributed greatly to not only settling the question, but also advancing the science and understanding of climate change. Then in the 2000s, the questions became economic in nature. How much more expensive is it to build green than to build dirty? And those questions have also now largely been settled. It's in many sectors and in many places around the world. It's just cheaper to build green. And Stanford researchers have also been instrumental in driving down the cost curves of these clean technologies and helping to design innovation that will further expand their deployment. So now we come to 2020. And the questions that abound are really ones of finance. How do we price the risks of climate change? Who's going to pay for them? And what about stranded assets? And so the work that we're driving across campus now really aims to contribute to this important frontier of inquiry. I forgot to advance my pictures here to depict the science, economics, and finance. So now I think it's a good time actually to do our first poll. Hey, there it is, look at that. So I'll give you about 10 seconds to tell us all how familiar you are with the concept of sustainable finance. All right, so great. Well, hopefully your time will be well spent. Sounds like you're in the early parts of your learning journey. So that's great. So I will give you a little mini lesson today. So we'll start with what is sustainable finance. I'll talk to you about who does it on campus, how we do it, so what, and where you can learn more. So start with a what. What is sustainable finance? You will find lots of definitions if you go about searching. I'm answering this in the context of the Sustainable Finance Initiative and the work that we do. And so we define it as essentially a suite of investment activities oriented toward transitioning from high to low carbon systems and low to high climate resilience. So what does that mean? Let's think about it in terms of activities. So the fields of activities that are in bounds are the flows of capital. So mapping those flows of capital, the sources and uses, the institutional organizations that are involved, asset owners, managers, banks, development finance institutions, et cetera. And then the models, methods and standards. So this gets into various risk models, different data sources and tools, the task force and climate related financial disclosures, TCFD, it's a whole alphabet soup, SASB, UNPRI, PCAF, CDP. For our next lesson, we can get into the details of those. Then we're talking also about instruments and products. So green bonds, sustainability bonds, private equity funds, ETFs, catalytic capital vehicles, accelerators, incubators, activist hedge funds, et cetera. Questions of portfolio management. So there are movements now around net zero portfolios, Paris Align portfolios, climate risk management activities in the context of a portfolio strategy, green tilts to a portfolio, et cetera. Blended finance. This is the set of questions around how to layer different flavors of capital together to further accelerate decarbonization, public-private partnerships, development finance institutions, philanthropy. And then questions of regulation, of course. Things like disclosure requirements, stress test requirements, green taxonomies to define what's green and what's dirty green deals. So this is the world of sustainable finance. Who does it on campus? So I'm talking to you today specifically about the Steyr-Taylor Center for Energy Policy and Finance, which launched in 2011 and is a joint initiative of the Business School and the Law School. And the Sustainable Finance Initiative, which launched in 2018 out of the Precourt Institute for Energy in partnership or thanks to the generous contributions of Bank of America. And that work, together, you can think of this as a cocktail of activity, really what you can think of also these centers as people. And here are our people. So some of these folks technically have Steyr-Taylor in their title, others are SFI in their title. We all generally work together in service of our shared mission. You will find these folks available and really interested in helping engage students in our areas of research. And there's a little snapshot of that to give you sense of how some of our students have engaged, it can range everything from committed research assistance where you're getting paid by the hour to do research on our projects, to having any one of us help you sort of think through your internships or externships, independent study advisory or taking classes with any of some of the folks on that previous slide teach courses. We'll get to that towards the end as well. And then we host events where we bring practitioners and scholars together to talk about these topics. So how do we do our work? So our mission is to develop system transforming policy, business and finance solutions in partnership with government and market participants in specific countries and regions with the goal of unlocking public and private capital flows at the speed and scale required to transition to decarbonization and climate resilience. I've bolded the words that are really important here, particularly this concept of partnership. So we at both SFI and STC are very committed to, and I'll have a picture of this schematic on the next slide, to working in partnership in situ with where these problems are located. We can't solve the big challenges of climate and sustainable finance by staying on campus and imagining up what the problems might be and designing solutions in a vacuum. We really need to understand the problems where they're situated and work in partnership with governments and market actors to design and implement those solutions. This Innovate Teach Connect is a catchy tagline to really depict this concept of developing and disseminating supportive policies and financial instruments, training the next generation of leaders, that's you, by the way, through teaching and then connecting ideas and people and students with opportunity and impact by convening all these folks around key questions at key moments in time. So as I said previously, the method of our work is somewhat unique on campus and that we are working as a team of teams, putting together students and fellows and faculty on specific sets of research questions where we are working in partnership with governments or market actors to design solutions where there are implementation pathways for that work to be put into practice and actually have an impact on the ground. Our outputs are a combination of research and analysis, so papers, which is a mode everyone's familiar with for campus activities, but also meetings and workshops, engaging practitioners, courses and internships. And the second and last one is really critical. We actually are creating new vehicles and alliances where capital is flowing in new and more aligned ways as a result of this work. And then a frontier we have yet to deploy at scale is executive education to really bring these concepts into practice directly through training practitioners. So I walk you through our mission at a high level. This is a more detailed description, sorry, let me go back, of our focus areas. So in pursuit of our mission, which is a lofty North Star, we've divided our work into five focus areas, catalyzing private investment. This is work in pursuit of unlocking flows of private capital through, as I mentioned earlier, blended finance, purpose-built investment vehicles, understanding risk and return opportunities in the application of machine learning and artificial intelligence and ESG investing. This second tier energy business innovation is actually housed at the GSB, I don't know, Steve Camelos on your roster for the program, but he's a great resource at the business school, working with Stefan Reichelstein, who's Professor Emeritus on these questions of energy business innovation, looking at things like the levelized cost of miles driven in the EV market, doing techno economic analyses for valuing batteries, second life, and so forth. Risk management and metrics, this is the set of questions moving beyond carbon to risk as a means to reprice assets and the various tools and strategies for engaging in that work, stress testing, transmission, understanding the transmission of climate risk through national economies. Climate is a factor in investing and understanding climate risk through the financial system. These are very timely topics that the EU is, and parts of Asia are actively wrestling with, where we have a frontier of work happening now here in the US, where depending on the outcome of the November election, we could see huge changes in how the financial system in the US operates in regard to risk, climate risk. Straded assets and just transition. So if we catalyze a bunch of capital, business innovates around understanding how to price and manage it, we're gonna strand a whole bunch of assets in this transition. And that's a good climate perspective. It's not a good thing for communities and workers who are dependent on that legacy infrastructure. I will continue. So this is a set of work and research around innovative ways to finance the transition so that communities and lives and livelihoods are not left behind. And then finally looking at it from a systems perspective, understanding how to transform and integrate legacy systems. This is taking a look at things like the electric power sector in India and how do you actually redesign the market for decarbonization, land use policy and electricity market redesign in California in light of the wildfires, the future of agriculture in Brazil. These are big and heady questions around system transformation that we're wrestling with. I'm not gonna spend too much time here in the interest of time, but this is just a snapshot of some of the projects in our catalyzing private capital bucket. I mentioned blended finance a few times. Esther Troy is our research fellow who's leading our work in this area who's just recently published a paper you can find on our website about understanding blended finance from the perspective of decarbonization after a long history of application of this tool in other impact sectors, particularly economic development and how do we really effectively deploy this tool to achieve transformative impact? Another set of questions around financial innovation I'm highlighting here. So young in is our lead on research and financial innovation, understanding these conceptual frameworks for aligning material sustainability factors in investment analysis and decisions, understanding climate related policy risk exposure of energy assets. These are all ongoing research questions where if you have an interest in these topics you can find ways to plug in. So what? So Toljo, what sustainable finance is? Who's doing it on campus? But so what? Why do we care? And I'm gonna take you through a very quick mini lesson in why this stuff matters. So I will walk you through the triptych there of science, economics and finance and this is how we arrive at this question of climate as really a capital allocation. So what's the question remains? What's, the answer is three X but the popularity contest of five X here may have just been picking a number in the middle. But in fact, those of you who chose it may have been thinking of the one and a half degree C scenario where five X is the number. Obviously this isn't an exact science but the punch line here is that in the energy sector we need to scale up investment three X. You'll note that this is an old, for two degrees five X for three, excuse me, five X for 1.5. You'll note that this is an old slide with 2015 numbers here for 329 billion of the current spend. Turns out that's actually where we are five years later. So in 2020, the number was about 363 billion. On the plus side, we're getting a lot more bang for our buck. So think about how much the cost of these technologies have dropped over that period of time. So you're just getting a lot more megawatts for the dollar spent. And you're seeing now a real uptake in offshore wind which is exciting. But it's also important to think about the, well, excuse me, this is just another way of looking at these numbers. That this trillion dollar gap is thinking about it just from a clean energy perspective. You may have seen the IEA numbers of a $2 trillion per year through 2040. That also includes renewable energy, efficiency and low carbon technologies, nuclear and CCS. So in either case, you're looking at a three X for two degrees and five X for 1.5. I don't know about you, but I have trouble robbing my mind around a trillion. So just to contextualize these numbers for a minute, here's some mile markers. An important one to call out is this 54 trillion. This is according to the IPC, the expected economic damages from 1.5 degrees C of warming. Obviously more warming results in more economic damages and to just put those numbers into context in the 07 to 2010 subprime mortgage crisis the U.S. household wealth lost 19 trillion. So we're talking orders of magnitude, a greater economic losses in even a 1.5 degrees C scenario. The one trillion you saw on the previous slide is you can think of it as a very achievable number. If you think about it in the context of just the market cap of the device you have in your hand. So Apple in 2018 hit a trillion dollar market cap, Amazon, Microsoft and Alphabet have all done the same over the last two year period. Of course the markets have been rather squirrely so at any given moment those numbers are subject to change but it gives you a sense of context. It's important to note as we're talking about all these financial numbers that there are off balance sheet and equity numbers that are very important that aren't captured here. That we're trying dollars and cents losses but the impacts on human and ecological health are unimaginable. The UN has published a study recently that estimated an additional 122 million people will be forced into extreme poverty by 2030 as a result of climate change. And it is so important to note particularly in the context as we're seeing it play out with COVID just immense inequity that's playing out with the health and economic impacts of COVID. That is the same when it comes to climate impacts. Also you can include the global south in that. So there are real issues of equity when it comes to the impacts of climate. I'm gonna keep going in the interest of time. I just was gonna take you through a very quick lesson of energy financing to just remind people that people often tend to equate energy financing with venture capital, but there's a lot more steps in the process as you go from the labs here at Stanford out to commercialization and maturation. There are different sources of capital that play at each stage of that pipeline. And there are a couple of critical gaps here, the Innovation Valley of Death and the Commercialization Valley of Death where innovation and research that can come out of Stanford can really help catalyze capital to fill those gaps. Understanding in the context of innovation, those barriers happen around these nascent solutions and unexplored solution spaces across these different sectors of the economy. Most of you probably are interested in the stuff in the energy supply category, but this holds also for transportation, buildings, ag and industry. So there are all these solutions that just aren't quite ready for commercial capital, but that are really critical for us addressing the climate crisis. And so the opportunity here is to innovate around how to deploy capital in this space. I serve on the board of a non-profit organization called Prime that's doing really cool stuff in driving catalytic capital into these funding gaps to help get these nascent and unexplored solutions out to a stage where they can capitalize on commercial success. In the case of deployment, the barriers have to do with the flows of funds between OECD and non-OECD countries where a lot more of the need exists, but the capital is much more heavily weighted in the OECD zones. And just to wrap up this mini lesson, I'll just quickly kind of walk through some of the ins and outs in reframing climate to move capital at requisite speed and scale. So we're really moving from price to risk. So out is this idea of pricing carbon and in is this idea of pricing risk. They're not mutually exclusive, but the emphasis is certainly on understanding it in the context of risk. Moving from micro to macro. So instead of just focusing on cool, one-off demonstration projects, thinking about how to change production systems from there to here. So rather than looking at things just from a global wholesale perspective, understanding local solutions and local problems and understanding that climate solutions are everywhere, that this idea that Asia is a finance and technology taker needs to be replaced with an understanding of state-driven finance systems. And the last thing I'll cover before our Q and A is just where, where can I learn more? How you can sink your teeth into this stuff. So here's the Steyr-Taylor Center website, the SFI website. You can find more information about our fellows, our research projects, the courses that are affiliated. These are not to be clear degree granting programs. We are research centers, but we have course, our fellows and faculty teach courses in these topics. Here's a selection of those courses. So in the fall, I encourage you to sign up for Soyoung's Sustainable Finance and Investment Seminar. That'll be once a week, kind of like the energy seminar, but focus specifically on topics of sustainable finance. There's also a policy lab that my colleague, Jeff Ball, is teaching on understanding the impact of China's global infrastructure spending on climate change. Great fun if that's a topic you're interested in. And then I want to make a plug for my winter quarter course that I teach with Kate Gordon, who runs the Office of Planning and Research for the Newsome Administration, Climate Politics, Finance and Infrastructure. And it's listed as a law course, but in case you glanced at my bio, I've actually never been to law school, although Kate has. So I really approach this from an MBA perspective, from a practitioner and entrepreneur perspective, and think about this as really climate risk and opportunities for 21st century leaders. And the course is the enrollment tends to be about half law and half business or engineering and science, master students. So with that, I want to make sure, and I should add also I and Soyoung and potentially others have had the pleasure over the years of advising students who are in the EIPA program on Directive Reading and Research as Independent Study in the winter and spring. Sorry about my internet connection and I welcome your questions. Awesome, Alicia, thank you. So feel free to raise your hands or ask in the chat. Melissa, why don't you go ahead? Hi, Dr. Segar, that was great, thank you. I'd love to know more about your experience working for Andrew Cuomo in New York's Decarbonization Advisory Panel. And if you could share some examples of what kinds of goals are set there and how progress is measured in that context, that'll be really helpful. Sure, so that was a really interesting experience. Just for context, the Decarbonization Advisory Panel was formed out of calls for the New York State Common Retirement Fund which is the pension system for all New York State employees, calls for that pension system to divest to fossil fuels and in response to that, the governor and the state controller decided to convene a panel of experts to investigate the question over the course of the year and pose recommendations for the state controller on what we then expanded the scope to be a consideration of how to decarbonize and build climate resilience in the portfolio rather than looking at it as a thumbs up, thumbs down on a divestment question. And our recommendations to the controller which he adopted in quick order thanks to the way the New York system is set up or where the controller is the sole fiduciary so he could make these decisions unilaterally. Our recommendations were first couched in a series of beliefs which I think are really, really important as you approach these questions and by beliefs it's really a recognition of scientific facts and data. So just acknowledging the existential threat the climate poses to people and planet and the implications that has for investment portfolios. And the headlines of the recommendations were to one, build towards a portfolio that is aligned with climate science by 2030 through the application of what we call minimum standards. So this was a set of objective qualifications for assets to meet in order to stay in the portfolio and the first technology to go through that process was coal, thermal coal and as a result the fund has published its minimum standards for thermal coal and the assets it sold as a result of going through that process. And then the last piece was to really lean into the tip of the spear of setting up a sustainable assets. Carbout's kind of the wrong word. I would call it tip of a spear because Carbout suggests that it's kind of a separate separately managed pool but the idea was really to have the auditioning stage for these assets to come through across all the different asset classes to build the muscle and the networks and the information to be able to infuse sustainable investing across the entire portfolio. And they did that too in hiring a head of sustainable investing and climate solutions and doubled their commitment from 10 to 20 billion to fill that mandate and then to continue to infuse that knowledge across the portfolio. There's a report on this. You can pick up on our website if you want to learn more too. Thanks. William, do you want to go ahead? Sure, thanks Professor Seger. I've been reading about and have also experienced somewhat the, how poor the venture capital model can be in helping to develop clean technology and sustainable solutions both in terms of the horizon that it takes to develop those solutions and also the ultimate outcomes that venture typically seeks. What's your experience with that and what do you kind of see as potentially solutions that can fill the gap? Yeah, great question. So, I think we learned this lesson in the kind of mid-Aughts 2005 to 2010 timeframe and the lesson was learned and new solutions have been deployed and it's been a really exciting experience to be part of rebuilding that investment ecosystem for early stage climate solutions. So, part of it is better baton passing from places like Stanford to Sand Hill Road in a microcosm. So, you see now the Tomcat Center which is our sister center at Steyer-Taylor that has these tech transfer grants to help students who are still working in labs with supervision from faculty get the resources they need to transfer that technology into the marketplace. You've got a whole proliferation of accelerators and incubators, particularly ones like Activate Energy where you've got lab space that comes with it. So, they've got space ever at Lawrence Berkeley with more labs that can give you all the equipment you need and the mentorship. And then you have entities like Prime where you're figuring out how to deploy catalytic capital that's very scarce this sort of the philanthropic capital that can be put in the right place at the right time to get these technologies and companies past this innovation valley of gap where they're just not suitable for commercial capital yet they need to be doing risk in some way. And then you've got a whole slew of new funds, venture funds, some of whom are still look more like traditional venture that are figuring out software solutions to climate and it kind of keeps them in their vein. But others are taking a more patient approach whether it's breakthrough energy ventures with Bill Gates' buddies as serving as LPs or corporate commitments now, Microsoft and Amazon with their couple billion dollar funds that are putting capital to work. You're just seeing a lot more capital ranging from those with like a traditional venture thesis to those that understand that venture capital doesn't necessarily apply in the case of hard tech innovation and there are different ways to structure investments at different stages and participating multiple rounds with some patients where you can still generate appropriate risk just of returns but where you're really committed to leaning into the thesis of the transition. Great, well, I'm afraid we're out of time for questions. I'm sorry I can't get to everybody but please join me in thanking Alicia. I think that was great and we'll move on. Thanks everyone. I look forward to hearing from you. I hope I see some of you in my class and again I'm sorry about the wobbly internet connection. It worked well, so thank you. Thank you.