Scott Ryan (Investature): 0:03

So there's a website that I love called Bank Green. Has nothing to do with Investature. It's just to help people know. It literally will show you anywhere you live in the world, who's your bank? What is their portion of the loans that go to fossil fuel industry? Dirty mining money for manufacturing and for where you live in the world, what's a green bank? Where none of the money goes to those causes? And then also it has interest rates and services that you care about.

Tom Raftery: 0:29

Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 100 of the Resilient Supply Chain Podcast. I'm your host, Tom Raftery. Now, a quick bit of context before we get into today's conversation. It's the Christmas break. Schedules are fragmented, inboxes are quieter, and rather than skip publishing altogether, I'm using the next two episodes to surface a pair of conversations originally released on my Climate Confident podcast. Why? Because supply chain resilience and climate resilience are not separate conversations. They're the same system viewed from different angles, and these are episodes that deserve another listen. Today's episode was first published as episode 238 of Climate Confident, and it tackles one of the most overlooked leverage points in the climate and resilience conversation. Money. Not government budgets or corporate pledges, but the quiet, massive pools of climate sitting in pensions, retirement funds, and financial supply chains. Capital that often unknowingly is still financing climate risk, stranded assets, and long-term instability. My guest is Scott Ryan, founder and CEO of Investature. Scott works at the intersection of finance, climate, and behavior, helping individuals and organizations understand how their financial decisions can either undermine or accelerate the transition to a more resilient future. In this conversation we unpack why financial supply chains are so often missing from sustainability strategies, how even small reallocations of capital can have an outsized impact and why pensions with their long time horizons may be one of the most powerful tools we have for systemic change. Normal programming for this podcast will return on January 12th with brand new conversations focused squarely on supply chain resilience. But for now, think of this as a chance to zoom out, connect the dots, and revisit an episode that feels more relevant today than when it first aired. And with that, Scott, welcome to the podcast. Would you like to introduce yourself?

Scott Ryan (Investature): 2:51

Yeah. Good afternoon, good evening for everybody listening to the podcast. Thanks Tom for having me. My name's Scott Ryan. I'm the founder and CEO of a FinTech climate tech called Investature, working to close the climate finance gap, as well as a board advisor to series of climate tech growth companies.

Tom Raftery: 3:08

And Scott, what is Investature?

Scott Ryan (Investature): 3:12

So, Investature, I'll say the problem we're trying to solve is to help individuals feel more empowered to help solve the climate crisis through a way that they've not been thinking about it before, which is their finances. It's also to help employers actually provide financial wellness and retirement benefits that are in line with what 80% of employees in the world are asking their employers to do, which is to have more of a double bottom line retirement plan. So good savings for long-term time horizon, as well as measurable environmental impact, as well as education for how people can manage their finances for double bottom line impact outside of their employer.

Tom Raftery: 3:50

And you mentioned, as you were the founder of Investature. What was your kind of aha moment that led to you deciding you needed to start Investature?

Scott Ryan (Investature): 4:00

Yeah, so two things. I think like many people in the world, I've always cared about the environment, right? Since I was a teenager and when I was a teenager, which unfortunately was 30 years ago, caring about the environment meant picking up litter, right, and recycling and cleaning up nature trusts. In my professional life, I've always just, I've been an entrepreneur or an entrepreneur within large companies. I've been a FinTech go to market executive across Bank of America, Salesforce, Accenture, and other large global companies. But that's 50 hours a week in my time in my private life. I've been on the board of advisors for the Natural Resource Defense Council, which is a large US climate protection nonprofit. But that's an hour of my time. Right. And then if my number one passion besides enjoying the world and living my family and friends is environment, that's not enough time, And so about two years ago, I said I need to be more satisfied with how I'm spending my time to help solve the climate crisis. I did about six months of discovery to see where's my skillset most unique to help provide meaningful impact yesterday. And my conclusion became focusing on the wealth and asset management sector and technology sector to help close the climate finance gap.

Tom Raftery: 5:13

And, who are typical clients?

Scott Ryan (Investature): 5:17

So Investature has two services. One is we sell to employers. Those employers tend to be larger. And those employers can be larger, they can be professional servicing companies, they can be technology companies, they can be universities, but larger employers. And what we provide to employers is consulting services to say, did you understand how significant the greenhouse gas emissions are for what's called your financial supply chain? For non-financial institutions, but say professional services, their financial supply chain is their pension. It might be their insurance that they have as a company, and it also might be like their treasury. So it's called off balance sheet right to employer. Did you know how significant this is? And they'll just give a, a quick benchmark. For professional services companies doing greenhouse gas reporting or net zero goals, their financial supply chain tends to be 20 to 30 times larger than everything else. All of their direct emissions, scope one and Scope two, and all of their other indirect emissions, upstream supply chain, downstream impact. Their financial supply chain is by far their largest source of emissions. So to say, Hey, you get what you measure, here's the measurement, and then here's a plan to draw it down, to actually put it into like one quarter of what it was with zero CapEx and zero opex. And the zero CapEx is 'cause by changing the retirement options you give your employees, which you're already spending money for that. It's just changing the options, changing the technology you use to make it more what people are looking for, to help them engage with their retirement plans and be educated about double bottom line in a way that hasn't really been done in 30 years. And then our users are the employees, right? So the users get scaled technology to say, here's how I can learn digitally or through classroom webinars, more about double bottom line financial wellness. Here's how I can forecast my carbon footprint. That includes my finance, And then here is calls to action to go from what is good intention saying I as an employee want to live more sustainably. I now know that I can change my banking, change my investments. Oh, but oh my God, I need to look at my social media feed. I lo I lost track. I forgot about it. Then to, to make that intention, make sure it turns to action. And so the technology is the education customised for the employer. Personalised for the individual, and with calls to action so that intention becomes impact.

Tom Raftery: 7:44

Okay. What kind of calls to action?

Scott Ryan (Investature): 7:46

So I'll give it a real easy example, And I'll go talk about banking or is banking's easier to talk about? And it's really globally relevant But I'll talk about the market. I know the best. I'm talking to you today from New York, but I have global work experience and Investature has a, a global ambition.'Cause the climate crisis has a global problem. So banking in the United States today, call it traditional bank, right? So one that you've heard globally, like JP Morgan Chase, or Bank of America, not attacking them, just brand names that are known. Those banks typically for consumers give you less than 1% interest on your savings and checking. And the loans like your deposits when they're lent out by those banks. Somewhere between 18 to 30% of those loans go to the most polluting industries, whether it's fossil fuels, whether it's dirty mining, dirty manufacturing. So you're not getting any interest rate and you're polluting, and you probably didn't realise it. So there's a website that I love called Bank Green. Has nothing to do with Investature. It's just to help people know. It literally will show you anywhere you live in the world. Who's your bank? What is their portion of the loans that go to fossil fuel industry? Dirty mining money for manufacturing and for where you live in the world, what's a green bank? Where none of the money goes to those causes? And then also it has interest rates and services that you care about. Right. And so my company Investature we have our money in a green bank that we had in Atmos, another one called Beneficial State Bank. Those are germane to the US. And my personal money is in a bank called Walden Mutual Bank. Both of those provide about 3% interest. The money goes into their sustainable agriculture, solar farms, or social impact more broadly. That includes environment and social, and they all report to me. Just like on your statement, Hey, how much interested did you earn? What's your balance? In addition to that, that's single bottom line. That's profit. For the planet, they say, and by the way, here's how many cross country flights you did not do because you moved your money from where you were at a traditional bank to us. So I get my climate impact reporting next to my interest rate. That is double bottom line, and that is for the psychologists out there that provides me dopamine that says I did a good thing and it makes me wanna tell other people about it, and I do.

Tom Raftery: 10:09

And, obviously when we're talking about people's pensions, you gotta be very careful because we've all seen headlines of companies going under, taking their pensions with them. So how do you assure your clients that the investments are gonna make, are risk free, for example?

Scott Ryan (Investature): 10:35

Yeah, so it's funny to me, people ask me that all the time, right? And I find it interesting that people provide a different level of scrutiny on climate positive investments than they do on just other investments. And here's what I mean. And I'm just gonna talk about the mutual fund and the exchange traded fund universe in the world. The world has 250,000 exchange traded funds and mutual funds. Investature is a investment advisor to employers to tell them to say, of those 250,000, here's the dozen that we recommend that you offer to your employees. And a dozen in a portfolio allocation. Here's the best double bottom line, one for large cap equity. Here's the best double bottom line, one for G30 economies. Here's the best double bottom line, one for alternative investments. That is just normal investment advice scrutiny. And it's double bottom line. If you picture like a scatterplot. The Y axis is good financial returns at a good expense for a long-term time horizon, which is what really is relevant for pensions. And the X axis is measurable, environmental intact. Every dot on that scatterplot is all of the funds in the world for that particular sleeve. Fixed income for corporate bonds, and we only recommend the top right. It's just due diligence. But our thesis is double bottom line on a long-term time horizon. And then we recommend the best. Now there's no investment in the world that's risk free ever in the history of man. But we do the proper due diligence, fiduciary responsibility it's called, which we're acting in the best interest of our customers. And then we read demand signals from our customers and our customers are employers and employees, where they say, I want good financial terms for long-term time horizon, which is what a pension is supposed to do. What a defined contribution plan in the US and the UK and Australia and other countries that have those are. Where the employer decides the options, but the employee picks which ones. And we just do the proper due diligence. Crypto is never perfect. the.com investment bubble was never perfect. Tesla goes up and down as a stock. Every investment has risk and reward. It's no different for ones that are climate positive, that also have a good financial return.

Tom Raftery: 13:21

Okay, but it's, I can understand people asking the question though, because obviously it's a newer field. It's one that doesn't have as much of a track record, shall we say. And so people are often nervous about something that's new and different.

Scott Ryan (Investature): 13:38

I think that is absolutely true. But every new investment in the history of man that was new had a higher risk profile and a higher return profile. Crypto, the.com bubble, ai, the internet, when that happened, automobiles, when that happened. Go back to decades, centuries, millennium, everything that's new because the information is new and or the technology is new, has a higher risk profile and a higher return profile. No different, but people somehow treat climate different, but they shouldn't.

Tom Raftery: 14:11

Okay. Coming back to the companies who are clients and potential clients, most of them now have climate targets, but very few have looked at the, as you termed, financial supply chains. Why do you think that is?

Scott Ryan (Investature): 14:29

So if you go through the history of I'll call it net zero and climate reporting, and I'll just stick to the most recent history that is really around finances. There's an initiative that was, I think chaired by Michael Bloomberg called the Task Force on Climate related Financial Disclosures. That was eight to 10 years ago about is when it was in its heart, and that ever since then, all of the downstream frameworks, use those insights, right, those frameworks, whether it's SASB and IFRS, Global Reporting Initiative, European Regulations, Southeast Asia regulations, United States Regulations, everybody's using that around financial disclosures. At the time what they focused on around finances was if you're a bank or an asset manager, so definitely, like if you're the choke point for the financial sector. But the financial sector's job is to serve the needs of their customers, and provide products that serve those needs. And so now if you think about a pension plan at a professional services company or a university, it's their job to state, to the banks and the asset managers, this is what my employees want. Give me that product. And then the banks and asset managers create it or promote it. So now if you think about why are people not talking about financial supply chain is because the global frameworks that I'll call it are all United Nations and COP adjacent, aren't recommending it yet for non-finance institutions because the last round of TCFD of then, which the Greenhouse Gas Protocol Framework out of the World Resource Institute is the main driver to recommend to people what are you supposed to do. And it has not in scope yet in terms of what are you supposed to do. But here's what I think is great. Almost everything that came out of Climate Disclosure Project, Global Reporting Initiative, TCFD, was modeled after. Who is the leader? What is the leader doing already? How can the rest of the world follow? And so then when we talk to employers that are leading in sustainability, they're actual leaders or fast followers versus the mighty middle that's just trying to be compliant. They love this. This is the next big thing because I didn't even know the materiality of my financial supply chain. I'm truly trying to make a difference for the climate transition as an employer, for my employees and for all of my stakeholders. And so they love it. The mighty middle is being compliant or like they're using a third party to tell you how do you be compliant. It's not being talked about 'cause it's not in the frameworks, but it will be because the leaders love it and are starting to do it.

Tom Raftery: 17:14

And why do you think employer sponsored retirement plans have flown below the radar in climate strategies until now?

Scott Ryan (Investature): 17:23

I'll take the question up another level

Tom Raftery: 17:25

Okay.

Scott Ryan (Investature): 17:26

I think, and then I'll get back down to that question. The climate crisis is a resource allocation problem. The simplest example, related to the climate was the hole in the ozone layer that the Montreal protocol solved. The world saw a hole in the ozone. They're like our planet is gonna incinerate. We need to solve this. And then the allocated resources of human capital, materials and money. And that problem was solved in years.

Tom Raftery: 17:52

Yep.

Scott Ryan (Investature): 17:52

Okay, now bring that up to the current climate crisis, which is more focused on greenhouse gas accumulation in our atmosphere, which then triggers global warming, sea temperature rise, bleaching, crazy storms, drought, water crisis, all this bad stuff. How do you solve it? Resource allocation. What are those resources? Human capital, material, and money. What do people talk about normally in the media, in the public eye when they're saying, what can I do to solve the climate crisis? Talk about policy, they talk about diet, energy, but they don't talk about money. Now, the money part is actually the easiest to solve of all of them, in my view. Now, I might be biased because I have a Wall Street background and my company's focused on a monetary system. But let me give you context. The human capital part is putting enough minds to work with enough innovation and behavior change. Changing behavior is hard Materials, those are materials, right? Whether it's making concrete less hard to abate. Or whether it's having the rare earths you need for battery storage or other things. Materials are materials and the world will just find that that's a market problem. The money has been defined to be aligned to the Paris Accords that the world needs to spend about 8 trillion a year on climate solutions to align to the Paris Accords, 8 trillion US dollars for your global audience. Right? Which I know most people are like, Hey, you hear millions, billions, trillions in US dollars or euros. You're like, it's all just big numbers. So, let me put it in context.$8 trillion a year for climate solutions and that 8 trillion will make them economically valuable. Climate solutions meaning energy, electric vehicles, built environment, sustainable agriculture, circular economy, and what is even more critically important now because we've been slow as a globe, adaptation and resilience. So all the mitigation solutions plus the adaptation resilience ones. 8 trillion a year needed to make that economically viable. The world has $800 trillion. Okay?

Tom Raftery: 20:02

1%.

Scott Ryan (Investature): 20:03

A 1% allocation of the world's money solves one third of the three legs of a resource allocation problem, just 1%. If every individual, every government, every employer, reallocated 1% of their balance sheet to climate solutions, they would become economically viable like that, and then human behavior would accelerate. So now why the retirement program, within that context? So there's a lot of sources of money. There's banking, there's investments, there's semi-liquid real estate, right? That makes up these $800 trillion across the globe. When I surveyed all the asset pools that are more liquid and also meant to be patient money. So like a longer term perspective versus I need it to pay my bills tomorrow. That's not patient money. The patient money, long term time horizon, the epitome of that is pension. And it is a huge pool of money in the world. It is more than a hundred trillion dollars around the world in terms of money that's in pensions. So it's the stocks and bonds and mutual funds that are in within pensions, whether it's pensions that are employer sponsored or individuals holding a tax protected retirement account. And it has, by definition, a long-term time horizon. And so it's the best place to align a long-term goal that needs to be solved yesterday, which is the climate crisis, and a huge pool of money that can be reallocated. And then here's the kicker, those pensions, which many individuals, their pensions through their employer or their own retirement savings, it is actually the world's most destructive asset pool right now. Not by intention. It has the largest percentage of its money invested in things that are furthering the climate crisis. And so not only is it not allocated to solutions. It is the greatest drag on the world financially as well to making it harder for progress. And so we're trying to educate individuals and employers to do two

things: 22:10

divest, stop making it a drag. Most divestments in the investment space are things that are like, okay. Divestment as concept has existed for more than a thousand years. The church doesn't wanna invest in sin industries. That's divestment. Individuals are like, I don't wanna invest in this kind of company 'cause I don't like it. That's divestment. Divest from it is easy. Divestment solutions are simple. You understand? At least stop being a drag on progress. But then also be positive. Invest in solutions. And invest solutions understanding the magnitude is trillions, but it's every little bit matters. And so then if you think of a hundred trillion as the bogey within the retirement community, globally, you can get 3 trillion outta that, A 3% allocation, and you close the climate finance gap. Plus you feel good. And what we provide is like, here's the impact you've actually had. It's not a qualitative thing. The data hasn't existed until the last year or two to be able to say, here's the quantifiable impact of your money on solving the climate crisis. And so it gives people a reinforced incentive as to like, why I did it versus, Hey, I donated money to charity. It felt good. What was the impact? Dunno. It felt good though, And so it's for real money showing diligence around one double bottom line investment. Think of like a optimisation curve. Financial, environmental. You don't have to be top of the right, you could be like all climate or all financial, but like at least be aware that that's a spectrum to consider. and then do it. Begin like, listen to this podcast, listen to other articles, and then take action in your banking and on your personal investing.'cause you can do that tomorrow. The change of bank, the average person changes their bank every 17 years. How much time does it take to change a bank about an hour. Wouldn't you wanna higher interest rate and a measurable climate impact? That's positive. Yeah. Move all your money. No, right. Move some of it, because you might have your money tied to traditional bank 'cause of something you like. It's connected to your mortgage. All, your bill pays set up and is gonna, you're gonna like, oh my God, how do I change my, my bill pay? That'll take three hours. Take the first hour and open an account and transfer some money and see if you like it. Get familiar with it, and then you decide how much of your money to move later. But just get started. Don't let inertia get in the way of progress.

Tom Raftery: 24:33

Riddle something for me, Scott. You said that the vast majority of the 100 trillion of the world's pensions are financing bad stuff. It's not exactly what you said, but you, that's not the terminology you use, but bad stuff. You also said that, and this is obviously very true, pensions typically have a long horizon. They're 20 to 30 year horizon. The Paris Climate Accord under that, we've said that we want the world to be net zero by 2050. That's 25 years, which falls nicely into that 20 to 30 year horizon that pension funds have. So if I were investing today as someone who's managing pensions, it would make no sense for me to be investing in anything fossil fuel related because in 2020 to 30 years time, in 25 years time, that has to be gone, becomes a stranded asset. So why is that vast majority of that a hundred trillion invested in stuff which has no future?

Scott Ryan (Investature): 25:40

So that's the question, right to ask pension managers at your employer, right? The, if you were to ask me, I think there's two things that actually energy companies, still need to be invested in. Energy as a sector, of which fossil fuel is a portion of energy supply, a dwindling portion of energy supply, but still a significant one around the world. You still need to invest in energy companies, whether it's their investments, their stocks, or their bonds. And actually bonds is the thing I wanna talk about if we have time.'cause people don't talk about it enough, but it's actually 35% of the world's investible assets. And it's predictable in return, and it's a direct loan to a solution versus investing in the stock of an energy company that's a clean energy company. It has marginal impact on the climate. So what do I think? If I'm a pension manager, because I'm an investment advisor, I'm not a pension manager. I'm not an asset owner, right? I'm an advisor. I don't own my own funds, I'm not BlackRock as an asset manager and I'm not an asset owner, like a pension. I advise them. I don't think anybody should cut outta the energy sector. I think people should have a pathway where they're cutting out of energy sooner, especially the organisations that have, are not actually pivoting their mix of energy. And so some of the world's largest energy companies, they are great at energy creation and energy distribution and energy innovation, but they refuse to change into clean economy. Other energy companies are actually changing, right? Some of my favorites, Total Energy NextEra. And others, they're actually transitioning. And so if you as an investor or your individual money, or a pension owner or someone in the United States or Australia's superannuation funds where your employer gives you choices, and then you pick how to allocate across those choices. If I'm the investor, I would not exclude the energy sector, nor would I blindly exclude all fossil fuel providers because some of them, like Total they're mix. They're actually doing the transition. So you have energy creation and distribution experts that need the money to transition, but then also don't give it to the energy companies that refuse to transition. So it's nuanced. And you can't do it all right away. But start yesterday. Start being intentional about how you're doing that mix of energy. People love talking about it. It's the one you asked. It's only one fifth of the climate solutions. So if you read research like Project Drawdown, which is my favorite nonprofit in terms of telling the world, this is the highest return on investment solution, the 100 best to quickly solve the climate risk. Within their framework, the energy sector is only 20% of the solution. The mobility sector is 20%. This is rough math, not precise math. The built environment 20%, nature-based solutions and food systems 30%, circular economy, 10 to 15%. My math didn't add up to a hundred, but I think you get the point. On, on the mitigation side, there's like five buckets. Energy's just one, and the adaptation resilience is a whole nother bucket. People love to talk about energy because it's all publicly traded. It's in the news cycle. It's obvious. And we should solve energy. We need to transition still because solar cannot be more like it is cheap. Wind is cheap. So the economic viability is there. It's all about just permitting and installation. There very little innovation is left needed. If you wanted to just say shift on clean energy, it's just finding the pockets where it's hard to get the clean energy too and solve that. But the other ones still need money. Nature-based solutions need money at trillions of dollars of scale. People love nature-based solutions, and they're amazing because they provide both mitigation through sequestration and adaptation resilience, especially like watershed. If you could figure out how to scale the money into reef restoration or creation, mangrove restoration and creation in the global south, you're providing the most affected communities money where the solutions help protect them because they're the most affected by flooding and they have the most land that is viable for those kind of things. That's a win, win, win. And a three-year-old's like, I wanna protect nature. Like it's not even complicated. And then if you think about when I said equity versus bonds and bonds, right? The nature-based solutions have loans with an interest rate. So if you're an investor as a person or as a pension, you just say, Hey, I take a loan and I do a normal risk return assessment, but I include climate impact as a factor that I care about. And it's like, it's obvious, right? So there's many what are called blue bonds and green bonds, which are invested in land-based nature-based solutions, or ocean-based nature-based solutions that at the same interest rate and the same credit rating as corporate bonds. People should just buy those up because guess what? Corporate bonds don't have quantifiable climate impact in your brain. And on paper, same return, same risk. Why not do it?

Tom Raftery: 31:01

So why aren't people doing it?

Scott Ryan (Investature): 31:03

Education? Because we go back to the resource allocation problem. What do people talking about? Policy. Why it's not my problem. It's like this bigger entity needs to solve it for me. My message and investors' message is, everyone has power right now. Tomorrow. Look at your banking. Be intentional about it. Look at some double bottom line banks and move some of your money to experience it. If you like it, tell your friends. If you don't like it, tell the bank what you need. Make them better. On the investments that they're, they're in your own control. If you're self-managed, do some more research. Ask us to help you. We'll guide you to good research. We have some collateral but our companies, just over a year old, so we're not, you know, we're not, I have 15 people, right? I can't service everybody right now. I'd love to eventually, but I can't do that right now. But like, be intentional about your own investments, and then at your employer, talk to your leaders. Right. Like, Hey, I would like to have better education from you about financial wellness. That includes sustainability.'cause I care about it and I'm one of the 80% of people in the world that wants my employer to help me live more sustainably. I've just learned that part of that can be had my finances. It's not just my diet, my energy usage, my my installation at my home. Help me. Tell all of your other friends, 'cause guess what, 80% of them feel the same way. And then you are the beneficiaries of the benefits from your employer. And then if you think about, hey, if your employer says no, it's because they need to be shaken out of inertia. This is not like a I'm carrying a pitchfork and I'm chasing my employer to stop being better. Which is what the climate movement was 10 years ago, 20 years ago. Right. It was like fear mongering. What you're actually saying is. No, like I just, I want this and it makes sense for me, and I'm the beneficiary of the benefits. If you look at the P&L of the employers, whether again a university or corporation or a private company, the third largest expense is retirement benefits. Most employees don't truly appreciate it as much relative to the expense for the employer, versus like the number one expense is cash, pay, number two tends to be health benefits. So that's more of a US thing because we have privatised health system, which is a whole nother topic. And then retirement plans. In the US retirement plans, especially defined contribution plans, there's three components to it. There's is your employer matching what you put in yourself? The second is what's the technology you use to transact? And third is the investment advice that the employer's given for what investments to give to you. The technology and the investment lineup is plain vanilla. Not appreciated at all. In the United States, employers spend $15 billion a year on that. And the money's just being thrown away because employees don't care. For two reasons. They almost all look the same about single bottom line financial only. Or a qualitative thing like, oh, we included a social index fund. It like qualitatively feels good, but there's no quantifiable benefit. So let me talk about just suggestions for how to have a, a civil conversation versus a carrying a pitchfork conversation with your employer leaders about your retirement benefits. The thing to know for you as an employee, right, if they got to listing or if you're an employer, people leader. And a people leader doesn't mean a human resources professional. It means someone who leads people. You care about your people. Retirement benefits are meant, they're designs called by fiduciary responsible do what's in the best interests of the employees. So 80% of employees, according to Morgan Stanley at Work studies, Schroeder studies, the Texas studies, which are the only ones in the world that really continuously ask about how important is sustainability to you in the workplace? 80% up from 40% of employees, just 10 years ago say they expect their employer to help them live more sustainably. So the demand is there. It's in the best interests of the employees. There are plenty of financial vehicles that have a good financial return for a long term time horizon and a sustainability. And in my case, I'm focused on the environmental part of sustainability, cause people have different definitions of sustainability. That's the dominant one, but it's not everyone's. But measurable environmental impact. And you say, Hey, I would like to have some of those options and then I'll tell you where they where there tends to be a much better option than what you currently have in your pension. The much better option is on the fixed income side. And the second is in what's called alternatives, alternative investments. So if you think of like crypto as an alternative investment, real estate is an alternative investment. It's basically not a stock or a bond or cash. And so on the alternative side, what we recommend is actual funds that are focused on climate solutions. And so why is that a good thing? One is that it's actually helping solve the climate crisis. Two is that if you think about all investments are relative to a risk return profile for its peer group. Climate solutions is its own peer group. Crypto is its own peer group. Real estate is its own peer group. So we recommend what is the best financial investment for climate solutions as a peer group, but you classify it in alternatives because it's still newish. Even real estate investing through like the markets and REITs and other things is newish. Newish meaning the last 20 years, versus stocks and bonds is a hundred years or more. So because it's new, I should say add, you know, add a climate solution fund in the alternative space, and that's being fiduciarily responsible to your employees 'cause they want it. But also you're saying, Hey, I'm setting an expectation. This one's an alternative, has a high risk, high reward, just like other alternatives, But then the second one is in the fixed income sign, Most fixed income offerings. And I'm gonna speak to the mutual fund world versus individual securities. When people are doing portfolio allocation for mutual funds or ETFs, they tend to have roughly two fixed income buckets. One is government bonds, which is basically to be as safe as possible, some, or like money markets. So a cash equivalent for the most part, but it's still invested in the markets instead of under your mattress. And then number two is typically a corporate bond. A fund of corporate bonds could be typically investment grade, sometimes high yield, sometimes balance between the two. Basically it's like two or three choices where on the equity side there's like 10, cause equities are exciting. They've got greater long-term returns, But more volatility. But, so, because most people, especially retirement plan, they don't need the money tomorrow. So equities makes more sense. They can take the ups and downs, but get the long-term time rise of adjusted returns, but 35% of pension money is in fixed income. 35%. So of that a hundred trillion dollars, 35 trillion is in fixed income. Why not have more of the fixed income where it'd be a similar risk bond, same interest rate that you get predictable fixed income, but it's a, it's green and blue bonds or it's energy transition bonds where or organisations that are trying to transition, 'cause this is their asset class, you're funding their transition to a better tomorrow. Good interest rate, predictable against a risk return. So we focus on those two areas most because they're underappreciated and are actually the most impactful and it makes the most sense from an investment advice standpoint.

Tom Raftery: 38:22

Let's say your platform gets picked up by every Fortune 500 company tomorrow. What's the most surprising ripple effect you think we'd see in society?

Scott Ryan (Investature): 38:36

I would probably explode with enthusiasm. It it would, it would be some sort of social media story. Like this Scott Ryan Guy that is an emerging leader just suddenly exploded. Outside of that, here's, here's, I'm gonna my father is a psychologist. My brother's a therapist. I come from a family of people that just think about mental health. I think it'll be a breath of fresh air for society. I'm not gonna talk about data,. I think it's a breath of fresh air to almost like bring more happiness to the world because so many people, whether leaders of organisations or employees or individuals like. I just realised something else I can do that makes me feel good. That's a genuine impact. That was actually a stress the day before. So that's what I think the biggest impact would be is that actually like hope with impact and outcome has actually been achieved, and it'll bring a breath of fresh air and a feeling of optimism to society in general.

Tom Raftery: 39:33

And if we look five or 10 years ahead, what's your vision for how retirement investing fits into the broader climate transition?

Scott Ryan (Investature): 39:40

I think so. I'll go math on this one.

Tom Raftery: 39:43

Okay.

Scott Ryan (Investature): 39:44

That 10%. Or 10 to 15% of investments in retirement plans, whether it's pensions, defined contribution plans, so employer provided or individually managed is invested in climate solutions. Why? Not 'cause it sounds like a good number. It actually logically makes sense from this standpoint. I believe the smartest money in the world. For long term time horizon, or even medium term time horizon is venture capitalists and private equity investors. Venture capitalists and private equity investors tend to have a five to 15 year time horizon. Okay. Shorter than a pension retirement, but depending on how old you are as an individual, receiving those benefits. Right. But pensions tend to, as you said before, they design for about a 25 year time horizon. Right. But they have to account for the variability within the individuals. In the world, venture capital and private equity, the dollar amount coming from venture capital and private equity fluctuates based on interest rates and other externalities. But the thing that is sticky is the wallet share of investment. Currently, 12% of the money from venture capitalists and private equity is invested in climate solutions. That is up from 2% 10 years ago, and it's been a linear growth. The smartest money in the world in a similar or even a shorter time horizon is investing all of their money at a 12% clip on climate solutions and growing. Why? Because it's good value. That should be the same allocation change that patient money, which is what retirement plans are supposed to be, have as well. So then that's $10 trillion of the a hundred trillion is now in solutions. You have now solved the financial part of the resource allocation problem to solve the climate crisis. Then the world can focus on human behavior, of things that are now economically viable. Because by solving the financial part, you make things like direct air capture, economically viable. You make things like mobile nuclear energy, economically viable. You make things like nature-based solutions, sustainable agriculture scale that the capacity that need to be scaled at. That's what the money does.

Tom Raftery: 41:57

Okay, Left field. Question for you, Scott. If you could have any person or character, alive or dead, real or fictional, as a champion for aligning investments with climate goals, who would it be and why?

Scott Ryan (Investature): 42:15

Ooh. It's funny, I've thought about like who I wanted to be at the dinner table with me question before, but I haven't thought about it related to this. I'm gonna say two people. Someone like a Catherine Hayhoe who is a voice, right for decades of just taking action that's smart related to climate problem solving. And someone like the Dalai Lama, who just focuses on live a happy life or you know, or the Pope or you know, some, someone who's just focused on like happiness and ways to happiness and realising being intentional about how you use your money is a not a new concept but it's one that can help bring you happiness related to the climate crisis. And like the phrase that's existed forever is like, your money is your power. Your money is one of your votes that will bring you happiness, that will give you power. But having somebody who has no ulterior motives, other than like, I just try to help make people happy. And then the reason Catherine Hayhoe is that, you know, I think having diverse gender age voices right at the table all the time is important, right? There's a lot of good voices out there. I love Michael Bloomberg. I like Bill Gates. I like Tom Steyer. Mean, I love a lot of the voices that I'm learning more that really are coming outta Southeast Asia. I think the greatest innovation on climate solutions is coming out of East Asia and Southeast Asia, not the United States.

Tom Raftery: 43:42

Yeah.

Scott Ryan (Investature): 43:43

My home country. I wish it was, but it's not

Tom Raftery: 43:45

United States is going backwards

Scott Ryan (Investature): 43:48

From a policy standpoint, I don't think it's going backwards from what the business community can do, nor what individuals want to do. The only thing where the US is going backwards is on federal policy. That is a seasonal headwind that is not a long-term demand signal.

Tom Raftery: 44:05

Sure, but there's been a pushback against ESG policies as well in the business environment.

Scott Ryan (Investature): 44:11

Yeah, My belief and my team's belief and my board's belief that ESG is a misused phrase that, okay, ESG today versus when that phrase came into lexicon, I think it was 2002, the way it should be used today is it's a risk framework. When it was introduced in 2002, it made sense as like an actual term for choice and risk management because of the amount of data. Like it was hard to basically, Hey, ESG is always saying like, values based stuff, But creating a framework for it, right? And then making the lingo simple for society to understand. Now, If you think about financial decisions in ESG, 'cause ESG can have a lot of things. Governance on the G, it's been mostly built into financial decisions and due diligence since the dawn of time. You don't need a separate bucket for it. The reason it exists in ESG is that people could just say, oh, I'm being very diligent about board selection. But that was already happening through journalism and proper due diligence for advisors and asset managers that are actually good at their jobs. So then you break it down to e and s. Environment and social. Both are good causes, but they both have very different global alignment on what the outcome should be. And so having policy disputes around social change is natural in the history of man. That's why we have wars and other things. It is social differences, I think people should fight for equity and equality, but you're never gonna get global alignment on what the right outcome is. It's gonna be different. That's why people have been fighting for years and people vote a certain way, and it's sways, it's seasonal and it's regional. The environment, there is a global alignment on what the outcome needs to be. There is masses of data to make sure we achieve that alignment. And so ESG is an outdated term for investment choice, for banking choice for society. If you think about investment, maybe if you thought about, Hey, ESG as an investment concept, it's a fund the funds concept. I wanna do everything that's good values, but like this is why there's ExxonMobil and ESG funds.'cause there's good, great governance, it's horrible for the environment. And then people get confused and they should be because it's confusing. It's not an investment criteria. It's just factors 12, 13, and 14 in an existing risk framework. And most investors you say like, Hey, it's, people are stepping away from it again. There's a difference between who is the mighty middle that's just trying to be compliant and who's actually trying to lead the world. Right? The mighty middle is like, Hey, I didn't really wanna do this in the first place. I was being told to do it The people that actually wanna change the world are still changing the world.

Tom Raftery: 47:05

Scott, we're coming towards the end of the podcast now. Is there any question I didn't ask that you wish I did, or aspect of this we haven't covered that you think it's important for people to think about?

Scott Ryan (Investature): 47:16

The question for me, but then also a question for you is, you know, what kind of help do I need? I don't wanna feel like I'm on a soapbox. Right. I have this theory of change and solutions for it, and the solutions are constantly evolving, just like all climate solutions are. I would love people to go to my website and fill out the Contact Us form or see me on LinkedIn or when this podcast goes live and just provide comments like, Hey, this is what I actually agree with. I understand and I've taken action. This is what I agree with. I understand, but I'm uncomfortable taking action. Can you help me with this? This is what I, I'm cynical about. Just help us get better.'cause we believe we're generally trying to help society with a values driven, and by value I mean business value, not moral value, There is business value, in solving a climate crisis with financial decisions. There is individual value in solving the climate crisis with intentional financial decisions. So one is like, just give myself and my company feedback so we get better. So it resonates, and I am focused on the US market primarily right now, but looking to expand into other markets where it makes the most sense. So like, tell me stories of who's doing it well in your region. And then my question for you, Tom, is where do you see the most inspirational stories?'cause I think most change happens through storytelling and success stories. People get inspired by that. They don't get inspired by white papers. Where do you see the best stories coming around people innovating around financial decisions in the world?'cause you've got a better global lens than I do. And you've been doing this longer than I have.

Tom Raftery: 48:47

Sure. I don't have that much insight into the financial world. It, it's not one that I come across as often as, for example, the energy space that you mentioned earlier. So I'm not sure I'm the right person to be answering that question. I did come across a couple of interesting innovations in the financial space. In the climate space. One was I came across a company who are creating a cryptocurrency called Tocos, T O C O S, and the cryptocurrency is based on tons of carbon. Tons of carbon, abated. So, it's not speculative. You buy your Tocos like a one euro for one Toco, whatever it is, and then they're going into communities and cities and having the shops in those communities accept Tocos as a form of currency. So now you're creating demand for them. They have a, a nonprofit foundation based outta Switzerland, which is doing the purchase of high quality carbon credits on which the Tocos are based. So, so now people are able to buy Tocos and then go to the local coffee shop, and, instead of giving them euros for the coffee, they give them Tocos. And so suddenly you're putting your money to work to abate carbon.

Scott Ryan (Investature): 50:38

Very cool. I'll end on like one note of hope and then we can wrap up. Right. So on the financial side, it is common to people to not talk about it. And to not know about it. Right? So I've spoken at conferences in the last year that were focused on the leaders of the higher education community. Ones that once to declared to go Net Zero 15 years ago through an organisation called Second Nature. It's more North American universities, but there's some in Europe as well as a, a conference that's called Green Biz. It's the global sustainability leaders. About 4,000 people attend every year mostly on the corporate side. And what I spoke about was, did you know your financial supply chain is your largest source of emissions? to hundreds and thousands of sustainability professionals. And the answer with everyone, whether it's on stage or during coffee breaks, was, what are you talking about? And so I love the fact that I'm providing something that is new for people who are already living in their day job, sustainability, yet alone the billions of people who are not living in their day job sustainability, one, live more sustainability that it's like something new that they didn't realise they could do. It's not just become vegan. Right. Or something else.

Tom Raftery: 51:56

Yeah.

Scott Ryan (Investature): 51:56

Right. And I, and I, and I, and I didn't invent the solutions. I'm leveraging people that have been doing this a little before me research from an organisation called like Topo Finance. Project Drawdown I know I talked about before that are bringing forward the data that says here is the impact of your every thousand dollars of your money. You move from a traditional bank to a green bank is the same as not flying 4,000 kilometers per year. So if you move 10,000 US dollars or you know, euros, that's 10 flights per year. You've just saved the world. Like that is impactful stuff

Tom Raftery: 52:35

Mm-hmm.

Scott Ryan (Investature): 52:36

and people don't know it yet. We need to bring it out into the public eye.

Tom Raftery: 52:40

Super. Scott, if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Scott Ryan (Investature): 52:49

So we have a website Investature and Investature is spelled invest in Nature Invest, A-T-U-R-E. I. will ask for forgiveness in that our website is the quality of a startup's website, but it does exist. So go there, fill out Contact Us, read content, and give us feedback. And the second is we're very active in LinkedIn, because of professional networks, right? And so my own profile or company's profile, read the thought leadership and comment and respond. We monitor it so we can engage that way.

Tom Raftery: 53:18

Super Scott, that's been fascinating. Thanks a million for coming on the podcast today.

Scott Ryan (Investature): 53:23

Thank you, Tom. Appreciate it. Have a great day.

Tom Raftery: 53:25

Okay. Thanks everyone for listening to this episode of the Resilient Supply Chain Podcast with me, Tom Raftery. Every week, thousands of senior supply chain and sustainability leaders tune in to learn what's next in resilience, innovation, and transformation. If your organisation wants to reach this influential global audience, the people shaping the future of supply chains, consider partnering with the show. Sponsorship isn't just brand visibility, it's thought leadership, credibility, and direct engagement with the decision makers driving change. To explore how we can spotlight your story or your solutions, connect with me on LinkedIn or drop me an email at Tom at tom Raftery dot com. Let's collaborate to build smarter, more resilient, more sustainable supply chains together. Thanks for tuning in, and I'll catch you all in the next episode.