The Role of Family Offices with Spring Lane & CREO

[MUSIC] This is Invested in Climate with Jason Rissman. I see climate as the world's biggest, most diverse, most important movements in human history. Millions of people dedicate themselves every day to protecting the planet. This podcast shares conversations with advocates, entrepreneurs, investors, policy experts, and anyone else that can push our thinking about what's possible and what needs to happen to address climate change. If you have ideas for episodes or feedback, get in touch on LinkedIn. If you enjoy the show, please leave a rating on Apple or Spotify. I'm currently building a new venture. It's related to storytelling and how we engage all sorts of folks in meaningful climate action. If you have expertise in this area, big ideas or examples of something that's really working, get in touch. Thanks for listening and for doing whatever it is you're doing to support climate progress. Okay, let's get started. The climate is both a risk and an opportunity, and for some, they do start with risk, whether it's physical climate risk, which we're seeing a lot of in the marketplace, and the World Economic Forum came out with a number last year saying that we lose 12% of GDP for every one degree of warming, which is a huge number, and that impacts every stakeholder. Hi, everyone. The climate transition requires not just allocating trillions of dollars to scale new technologies, build new infrastructure, and transform incumbent industries. It requires getting the right mix of capital to develop, grow, and eventually scale innovations. In the world of climate, promising technologies too often don't find the growth stage capital that's needed before large institutional investors can finance reaching scale. Addressing this missing middle is a structural challenge that requires more attention, and today's episode is the first in a series of discussions on the missing middle and climate developed in partnership with Spring Lane Capital. In today's conversation, I'm joined by Jason Scott, a longtime climate investor who is partner in residence at Spring Lane Capital and also board chair of the Creole Syndicate, and Regine Clement, CEO at Creole Syndicate. Spring Lane has been investing for years in the missing middle and has unique expertise in the challenges and opportunities it holds. And if you haven't heard of Creole, this is a group you should know. Creole works to help family offices invest more in climate. Families hold over $10 trillion in assets globally and can bring versatility and resilience that can help improve climate finance. Creole is working to mobilize a trillion dollars for climate in the coming years. We talk about insights from the recent report on the missing middle, how climate investing has evolved in recent years, the role of catalytic capital, whether investors are backing away from climate, a mixed policy change and macro factors, and much more. This was a great kickoff for the missing middle series, and I hope it piques your interest in the other episodes as well. And if it piques your interest about partnering on the topical series of your own, don't hesitate to reach out. Here we go. Regine and Jason, welcome to Invested in Climate. Thank you both for being here. - Great to be here. - Let's get started by first learning a bit about both of you and the roles that you play. Regine, you are the CEO at Creo Syndicate. Will you please tell us a bit about Creo, what it is, and the role that it plays? - Great, thanks, Jason, and thanks for having me and happy to. Creo is a not-for-profit organization that was launched in 2011 as a network, and we have a mission to mobilize and catalyze high impact capital into climate solutions and decarbonization transition, really to build a better future for all. We have two goals. So we have a goal of mobilizing $100 billion by our members by the end of this year. We're well on our way. We think we're going to achieve it. And also to catalyze $900 billion by other investors really focusing on asset owners to bring about a trillion to the marketplace. We've been building this catalyst platform over the past 10 years, because we believe without private finance in climate transition, we're just not going to get there. And so we need to activate these investors. The way we do our work, we partner. I already mentioned members. So we partner with family offices, family foundations, and family-controlled businesses, about 200 families we work with as members. And we also now work with institutional asset owners such as pension funds and sovereign funds through partnerships with the likes of the UN, Nedzer Asset Owners Alliance, and the Investor Leadership Network. So the scope of really the work we do is threefold. So we look at mitigation, conservation, biodiversity outcomes, as in terms of goals, the sectors we mostly focus on are energy, transportation, industrial, food systems, and nature-based solutions. And whereas in 2011, we really only focused on venture capital and project financing, today we cover all asset classes, and we see deployment of checks anywhere from 500K to 300 million into both directs and deals. What we do as an organization, we do four things. We do a lot of community building. It's important for these investors to be connected to do their best work. We also do research, we do educational programming, and I think what is unique to Creo as a nonprofit is that we do deal sourcing. So we look at about 1,000 deals a year for our members. We do this at no fee, and it really is to make sure that the rubber hits the road. So we're not only helping our members find the right partners and really build their knowledge, we're helping them actually deploy the capital. We're a community today of about 8,000 people, about 1,300 are members, and we work with about 5,000 investors in about 30 countries. - Incredible. Well, folks can see why I said I'm a fan of Creo doing amazing work. Jason, let's turn to you, your co-chair of Creo, and also a partner and entrepreneur in residence at Spring Lane Capital. Tell us a bit about Spring Lane and how you focus your time. - As you mentioned, I'm a partner and entrepreneur in residence at Spring Lane Capital, and I've been working with a firm for almost 10 years now as an advisor and just joined full-time a couple years ago. Initially to scope out the market for new and interesting investment ideas, but we thought there were capital gaps that Spring Lane could uniquely fix. I'm chairman of a portfolio company we launched called Development Engine, which provides early-stage project development capital for renewables and distributed generation, mostly. We also get EVs and other proven technologies. But my main job is as a partner at Spring Lane where I work across the portfolio, sourcing deals, managing companies, helping those companies raise capital. So let more on the company formation, investment, and capital side, less on the operating side, we have a team of operating partners that work with companies to really build projects. Spring Lane invests in what we call the missing middle of sustainable infrastructure. We invest across a variety of sectors, waste to value, EVs, distributed generation, green data centers. But what we're really trying to do is find companies that have been invested by venture capital firms and they're in a Series B, let's say, or family offices or non-institutional investors and are looking for their first institutional round. We invest both corporate equity to help build the company and the platform and then provide project capital to build out a first plant of proven technology or a second and third plant or financing facility for that company to grow. So we'll talk a lot about the missing middle today. We think of ourselves as part of one element of the missing middle, which is this sustainable infrastructure, project finance part. And there are lots of other missing middles we'll talk about, but we really sit squarely in that sustainable infrastructure, project finance, helping companies scale with physical assets. - Thank you, Jason. Thank you, Regine, for setting that context. Let's dive in and start defining terms. This episode is part of a multi-part series on the missing middle developed in partnership with Spring Lane. For new listeners that haven't heard about the missing middle, let's quickly define what we mean. Jason, will you kick us off and help explain what the missing middle refers to? - Sure, and the nice thing about the timing of this podcast is that I think the idea of the missing middle, which my partner Rob Day actually coined around 2019 in a Forbes column, is now mainstream with investors and asset allocators, at least in our small little world of climate financed, which is exciting because I think we need to recognize that the climate investing sector faces some pretty unique challenges as we're trying to build out a completely new set of infrastructure providers and building new companies that are creating new industries. So in the missing middle, we really think of it as the gap between series A or maybe series B venture capital and mainstream project finance and private equity, which is a huge gap. So it can go anywhere from the growth equity firm that's investing at the series B or series C, or it could be a late stage infrastructure investor but who maybe is more comfortable underwriting some risks on the policy or deployment side that a mainstream infrastructure investor won't. So we think of it as growth equity, we think of it as early stage project finance, and we think of it also on the more tech forward side as investing in first of the kind, maybe higher technology risk product projects that mainstream investors won't touch yet. But the key to all of these kind of ways of defining the missing middle is we think there's huge economic opportunity but opportunity that mainstream investors either don't understand, they don't understand the markets, the technology, the project risk, the operating expertise that you need to build something with all of these missing middles promise really great investment returns, but they're just misunderstood by mainstream capital markets. And hopefully as we prove out these sectors, the missing middle will go away as more money comes in from the instrument investors. - Thanks so much for that context, Jason. Regine Creole recently released an excellent report on the missing middle last July. And I'd love to hear about some of the findings and I'll admit I was surprised and impressed when I checked out the Creole website and just saw how many different reports you do, everything from oceans to geothermal, ocean wind, AI for agriculture, much more. So clearly there's a strong research bench at the Creole and the missing middle report is a clear testament to that. Let's talk at a high level as your report starts, really providing context on how climate financing has grown in the last 10, 15 years. Give us a sense of that growth and what's fueled it. - Sure, so first I want to thank Featherlight. They commissioned this first report for us to produce just one clarification. So Creole has a research team. We also have an advisory team. The advisory team can be hired by our members or other aligned investors to produce research around a very specific element that person is interested in us diving into. And in this case, it really was, we keep hearing about this missing middle. Does the data show the missing middle and where is the missing middle and is it different across different sectors and different asset classes and different geographies? So that's what we set out to look at with this report. So with regards to your question around climate investment flows over the past 10 to 15 years, I will say we're just revamping this report. So some of the data that I'll be sharing today is actually updated preliminary data. So I want to be clear that we're still working on it, but I'll give you some snippets. But what we have seen, and this is really good news, is that from 2012 to 2022, we saw twice the doubling of climate finance coming into the marketplace. So it took eight years for the first doubling and then two years for the second doubling. And we got to 1.4 trillion, I think it was 2022 or 2023, which was actually the same level of investment as in oil and gas. So for the first time, we surpassed a trillion. And for the first time, we were on par with investments in oil and gas. Couple of things on that. One thing that's important to understand is that this 1.4 trillion is really both public and private sector investments. The other important piece is that it's almost a 50/50% split between public finance and private finance. And in the public finance, over 60% of that financing comes from China. So huge concentration of public finance coming from China. So that just also sets the context for further discussion. - Jason, I've seen reports of a speed bump the market has experienced over the last couple of years. Sightline Climate reported that venture investment in climate dropped 24% in 2023 and then an additional 14% last year. They're reporting on the roughly $30 billion of climate tech venture and growth market investments. Regine is talking about trillions of dollars. Pull this apart and help us understand how the pool of capital and decline noted by Sightline fits into the broader picture of climate financing. - Sure, I think what's interesting about climate is that mainstream asset allocators, the big pension funds, foundations, endowments, sovereign wealth funds are really just starting to understand where the opportunities are. And I think as Regine even mentioned with Creo when we founded Creo in 2010, 2011, 2013, most of the climate investment market was in venture capital. I'd say almost a decade I think people thought of climate investment as venture capital and new solutions. I think what was really misleading about that is underneath all this investment in new technology and new solutions, there was always a really growing interest in deploying existing technologies and there were declining cost curves for things like solar and wind. So there was always a lot of money going into climate from more mainstream sources into things like deploying solar, building wind farms, building out EV charging networks, things like that. So I think the public perception of climate investment as venture, I think is what right now is, I think skewing the perception of what's happening in the market. So the problem with climate venture capital is that even though returns have been according to Cambridge Associates and many other benchmarks on par with some other technology subsectors, they haven't been returning capital to investors at the rate that they expected. Now neither other venture capital subsectors, except maybe AI and some SaaS software and things like that. But I think because it's a relatively new sector, there has been a pullback in LP interests and climate investment at the earlier stages. But while that gets the headlines, what is happening is this massive wave of investment in building out the deployment of solutions that do work. So a lot of solutions are low tech. There's things like renewable natural gas and waste of value. And as I mentioned before, now green data centers, we have a green data center power company that's using wind power to power data centers. So these are not super high technology solutions. They don't have super deployment risk. They have operational risk, policy risk, other kinds of market risk. But I would say that deployment of capital in those sectors is still increasing at a steady pace. So you have this kind of real gap at the venture stage because investors haven't seen performance. But they haven't seen performance in other sectors either, right? It's just climate is getting the focus because of the fact that there's a lot of focus on climate policy right now. I think there's this continued steady growth on the more mainstream infrastructure side and a more incremental growth in the missing middle, right? So what we're really seeing is a real degrees of difference in the subsectors of climate investment. What's great about the career report is we break it down into these subsectors and you can see these trends play out across subsectors and stages, both in terms of returns and in terms of deployment. So amidst all the kind of, I'd say some meaningful negative headlines around some early stage climate investment gaps, there is a much better bigger story about deployment at scale in the later stages. - Well, great to hear the bigger picture in that there is some good news. Regine, despite that progress and despite it being worth celebrating that we've surpassed a trillion dollars in investments, much more is needed and your report details the growth in climate financing that's needed by 2030 to reach net zero goals. Give us a sense of how much more capital is needed and how that needs varies by sectors. - Yeah, I'm happy to answer that. I just want to build a little bit on what Jason was saying. So we've been doing some analysis with the current data. So 2023, 2024 preliminary analysis shows that indeed there is a slowdown in terms of capital being raised in climate, but also across all industries. So right now we're seeing a 42% decrease of capital raised for all industries and 40% decrease in climate. So quite close and that's over 2023, 2024. Now this is different than deployment dollars, right? This is what capital being raised. So that's something we need to keep an eye on 'cause it will have impact in the years to come. But we really see and continue to see climate sustainability as a mega trend. We saw really an uptake following the Paris agreement and the governments rallying around necessity to decarbonize their economies. So that had a huge impact. We also saw kind of a race to the top with climate policy, which definitely accelerated this, then rapid increase of corporate commitments, rapid increase of investor commitments and realizing that the world is changing. There's certainly more uncertainty in the marketplace, but that's for every industry. It is impacting climate for sure, but we and our community continue to see, as Jason mentioned, that this is a mega trend and stakeholders are continuing to do the work behind the scenes. We're seeing that quite prominently, which is great news. In terms of what are the gaps in the marketplace? So through research and this aligns with industry of understanding, we're looking at about six X gap currently through 2030. So we really need about 8.4 trillion annually invested in the space and about a trillion of that needs to go to emerging markets. But once you start looking at sectors, it gets interesting because there is a gap in every sector and every solution, but there's a wide variance between the gaps. So if you look at something like energy, transportation, built environment, we're looking at about a five X gap. But if you're looking at something like agri-food and land, it's a 32 times gap. If you look at nature conservation, it's a 64 times gap. If you're looking at industry, it's a 16 times gap. And if you're looking at hydrogen alone, it's 29 times gap. And again, I want to be clear, this data is directionally correct. It's very hard to get the exact number, but looking at this time series, we know that's about right. And so there's a lot of work to do, especially in the technologies that are stuck in that missing middle. According to Mackenzie, there's about 125 technologies. They're about to hit free commercialization and commercialization. It's unsure that we need all of these technologies to succeed, to be able to get to our decarbonization goals, but we need many of them. And many will say we have 75 or 80% of the technologies already to be able to reach our goals. But those technologies that need to scale are those that will allow us to have breakthroughs and to go faster, because we can get to the goal, but we might not get to the goal in time. So urgency is really important. And this is why we really do have to fix the missing middle. - Well, let's go deeper there. The 6X gap that you've mentioned, which is that we need to, overall climate financing needs to increase sixfold by 2030. That focus is on the whole market. Let's focus now specifically on the missing middle, which your report points to is where there's an acute need for financing to help technology scale. And we've talked at a high level, let's go deeper and really understand what it is, what's driving the missing middle, and how it's holding us back from the climate transition. Regine, let's start with you again. - Great. So there's three things I want to point out here. And before I do so, first of all, the missing middle exists in any kind of tech across industries. It is something that we've been able to see with the analysis that we've done. But we have also seen that the missing middle in climate is a little different and needs different solutions. And there's three things that I want to raise around that. First, over the past 15 years, we have seen in climate VC funds being raised over indexed in the VC category and under indexed in private equity category compared to all the other industries. So for example, in VC across all industries, about 35% of capital raised that goes to VC. And in climate, it's 58% over 15 years that has gone to VC. The other interesting thing is that again, PE is very under indexed in all industries. We see a 51% of the capital going to private equity and only 28% going in the climate space. And that creates different problems within structural problems within the system. Where you see the missing middle in all industries and in climate is that about 15% of capital raised goes to growth. And that's for all industries, not just for climate. So this is where you see the missing middle really does exist everywhere. It's just that the climate missing middle is more complex and more expansive. So that's point number one, point number two. And this was really an interesting piece of information. We have seen a lot of capital going into climate and a lot of this capital going into billion plus size funds. And these funds, we looked at the average size of their ticket sizes of these bigger funds compared to the average size of deals in the marketplace over 15 years. And for example, in VC, we see that the average size of the billion dollar funds is 55 million, whereas the deal size in the marketplace is 11 million. That's a problem because that means that the capital is not being deployed. The capital is there and available, but it's not being properly deployed. And we see this in growth and we see this in private equity as well. I wouldn't say conclusions, but one of the things we've been talking about is we likely need more funds at the 250 to 750 million dollar size to be able to match the need in the marketplace. And we need many more funds to do this. One of the catalytic strategies of Creo is to help support build the emerging managers marketplace. The third piece that I wanted to raise, and this is something that Jason talked about, is what is the role of First of a Kind project financing in that missing middle? And that is something that is much more unique to climate than any other industries because we're talking about hardware tech that needs to be integrated into infrastructure because we're building new plants to build new products that just don't look very familiar to lenders. And there's all kinds of problems with First of a Kind project financing that Jason can tell you a lot more about. But without fixing that piece of it, we're also not going to fix missing middle. And so some of the things that our families are doing, they're creating very flexible strategies, credit strategies to help these companies. There are also a lot of discussion around creating a separate asset class for First of a Kind project financing and really understanding the key characteristics of risk return of First of a Kind project financing and also what kind of investors would be able to do that alongside different types of tools to de-risk those investments. - Regine, thanks so much. Jason would love to hear your thoughts. And one thing that comes to mind is that the Creole report points not only to a particular stage that's not getting enough investment, but also certain sub-sectors. And let's also talk about returns because the report shows that when you compare climate tech ROI to other venture sectors, it compares really well except for mid-stage where there is a dip in returns for investors. So what sort of strategies are needed to help improve returns and bring in enough investors to fill that missing middle? - First of all, even though I've read the report and heard it presented 20 times, I always learned something new. It's really almost shocking to me that this analysis has not been done as comprehensively as we've tried to do at Creo. And I think part of it's because I'll just say as the co-chair of the board that I think our members, and this is related to your question, Jason, which is why I want to go into it, they're passionate both about generating good risk-addressed financial returns. These are fiduciaries and they're trying to make money, but they also care passionately about solving the climate problem. And so I think the level of sharing they do and analysis we're able to do is pretty extraordinary. And it's really helpful in helping us direct capital and helping families direct capital. And we hope some of these families can be a lighthouse for some bigger institutional asset owners to do the same thing and follow. And to just stick on one point, Regine made around this kind of size of fund, I think that one of the challenges we have in the sector is that there are misaligned incentives both for asset allocators and fund managers. For fund managers, you raise one fund and another fund, you get bigger and you create sub funds and you create platforms and you look at the biggest asset management firms in the world, that's what they've done. And so it's great that some of these fund managers are raising two, five, 10, $20 billion funds for climate. But if you don't have another set of managers coming in to fill in the gaps, that's where you start having problems in the sector in terms of returns. And I think what's happened with growth equity is that the mainstream firms have come in and they've gotten bigger and bigger, they've left these gaps. And that's part of their business model and it makes sense. What hasn't happened is you haven't had a new set of managers come in to pick up those deals and carry them to a place where they can be bought by big private equity firms or corporates. We need to fix this kind of manager gap. That helps actually fix the return gap because if you have a growth equity business and you have no one to sell it to or you have no one to invest in it, the business is gonna fail. And there's just not enough money in our sector and families have been stepping in an exciting way, first in climate tech and now in this missing middle as regime explained exploring new strategies and structures. But I think part of it is just misaligned incentives in the asset allocation system. And even when you talk to some of the best, most mission driven investors in our space at the big pension funds and sovereigns, even they say, look, we have to start with the big guys. We have to allocate to them first. We have to build credibility and track records. And then we'll start getting to these smaller managers. And so the gap, it's well understood by the asset allocation market. But their incentives are misaligned and the big asset managers' incentives are misaligned, right? So it's not like anyone's doing anything that isn't natural to them, but it's creating this really serious gap in the deployment of capital to solve problems that we all care about. So I'll say one other thing. The policy uncertainty that we're facing now is maybe a little extreme in terms of uncertainty, but macroeconomic and policy coupled together. But these are companies that to a large extent are fighting against incumbent industries and incumbent regulations. Transmission, permitting, things like that have been around forever. There are massive subsidies to incumbent industries. And I think we're in, unfortunately, like a part of the cycle where people are gonna just take a step back and wait six months, 12 months, two months to see how things sort out. That is a terrible idea. It's very clear that through cycle, through economic cycle and policy cycle, a lot of these technologies are better cheaper faster, but there are real kind of policy and structural barriers. So we're facing kind of two things. One is bigger funds raising more money, leaving big gaps in the market and kind of policy uncertainty that's freezing investment and really just crystallizing incumbent advantage that will eventually go away. But those two things coming together at the same time, it's a really precarious time for managers. But it is a great time to invest. And there was even an article in Bloomberg today about Macquarie doubling down and Brookfield doubling down, which is super smart. That's exactly what they should do. So we need more investors and more asset allocators to double down at this moment of uncertainty rather than step back and just do what they've always done, which is go for safety, go for scale, wait until things resolve themselves. - Jason, I'm glad that you brought up both policy as well as structural challenges with managers. Well, turns of both, let's start with the managers. Regine, I noticed that the reports also pointed, and this was really surprising to me, to the small number of funds that call themselves climate funds, but actually invest at least 50% of their capital in climate companies. Talk to us about that finding and what it means for the missing middle. - We did find that 18% of the funds that we looked at, this was really bringing together funds. I think we looked at 2,400 funds for the first report. We, Creo, work with about 1,000 funds, and we typically look for minimum 50% invested in climate to make our cut. This is why it's important to actually track these funds because they may have a goal, and sometimes they're, for all kinds of reason, not able to invest more than 50% into the marketplace. What does that mean for the missing middle? It does mean even less capital in growth equity, which is not useful, but it really does mean, and this is in part why Creo exists, is making sure that investors are really diligently these funds appropriately. It's hard because the new fund managers don't have a track record often, and part of the value of Creo and the flexibility of capital of family offices is to be able to come in and anchor those new fund managers and those new strategies to be able to build the data and the track record for institutional to come in. This is not passive investing. I will say it's not for everyone. I think every investor can invest in climate in certain strategies. When you're talking about venture investing and the missing middle, you do have to be well-connected, well-informed to be able to be successful, and part of it is making sure you're doing good due diligence. - Great, let's circle back to the policy uncertainty that Jason mentioned and also reconcile that with the huge increase in climate financing that at the beginning we said is needed, the 6X growth by 2030, and that's to reach net zero goals. In some circles in the US, net zero is no longer, let's say, a widely shared goal. In the Creo reports, you point to the net zero asset owners alliance, which includes 89 large asset owners who committed to transitioning over $9 trillion of investment portfolios to net zero greenhouse gas emissions by 2050. But a similar group, the net zero asset managers, recently announced a pause in operation after BlackRock pulled out of the initiative. The net zero banking alliance also has seen a wave of exits. How are you thinking about the financing gap in this new era amidst a new administration and these shifts in big finance? - Yeah, a couple of points there. One, I don't want to speak on behalf of net zero asset owners alliance. However, what I can say with our partnership, our partnership focuses not on the net zero goal, but on investing in climate solutions. So net zero asset owners alliance has four goals and they're tackling those four goals at one time. We're working with them solely on the investing more dollars, so increasing AUM into the solutions, which again is different than managing a portfolio for net zero goals. I think there is a difference between asset owners and asset managers and how they can show up in this space. Asset owners do have the capability, depending on the asset owner, it really does change between insurance companies and pension funds, but typically have to cover their liabilities if it's pension fund over a much longer period of time. And that perspective and viewpoint is aligned with climate investing, which requires more systems thinking or some systems led investing. I would like to point that difference. The other thing I would say is that we have seen other networks move towards investing in climate solutions. And this is what Creo started. We've always been about investing in solutions and decarbonizing the economy, not necessarily decarbonizing the portfolio. There is a nuance there. From where we sit and at least the viewpoint of our families, they continue to be committed to this work. I will say that the partnership is on track with Nedzero Asset Owners Alliance. We're very excited about what we've achieved to date. So far, so good. Jason, I'm curious how you think about that growth that's needed and how will we possibly get there? I'm gonna take another shot at your last question, too, 'cause I think it's such an important question right now. I have been investing in this space. I'm gonna sound like an older person since 2004, 2005 with Generation Investment Management. And when I was there, we started our first private investing fund. Now Generation has three or four different funds. There's a bunch of managers who were started around the same time that have now grown into multi-billion-dollar managers. But it's taken almost 20 years. And so if you think about where we started as generation, when we were traveling around the world, kind of pitching this idea of sustainable investing to big asset owners, almost nobody was interested in this idea of integrating climate risk into your investment strategy. And now almost every major investor in the world does that. So it took two decades, but I feel very comfortable saying that most every sovereign wealth fund, insurance company or pension fund, somehow thinks about climate, either as a risk or opportunity and has integrated that into their investment strategy and whether they use it as a way to evaluate existing managers or whether they use it as a way to deploy capital into new managers and everything in between. I really believe that's true. And in between now and then, we've seen huge blips in investment progress and policy progress. 2008, 2009, financial crisis, we saw a huge increase in investment with the passage of the IRA, that's two bookends, but we've had the growth of carbon markets. We've had, again, deployment at massive scale of low-cost capital into renewables infrastructure. So it is an up-and-to-the-right story. The problem is we started from a very small base. We need to get to a very high number. So every year, the rule of compound interest, who takes some progress away, to Regine's point, makes a huge difference for the trillions that we need to deploy. But to be very clear, we are on a up-and-to-the-right curve. And I think that the response you see from very mainstream, very high-profile, listed public companies who are big asset owners or state pension funds or people who have a complicated stakeholder base is very nuanced and very different. But no one is pulling back from their investments in the sector because they understand the risks and the opportunities. What they are doing is they're changing the way they talk about it. They might be putting a pause on things. They might be slowing down. But we don't see people fully saying, "Hey, we're not investing in climate anymore." So I think it's just important when things like this happen to remember that we're on a multi-decade journey that's up-and-to-the-right. The unfortunate part is we can't afford to slow down, and we do have slowdowns and bumps along the way with our macroeconomic, policy, cultural, whatever they are. But so now to answer your actual question about how do we get trillions of dollars deployed, we just need to keep going. We need to try harder. We need to push more. We do need policy advocacy. We do need data. We do need stories about winners and winning companies. We do need returns. We do need DPI, like cash returning to asset owners. So we need all those things together. There's not one way to do it. What I love about CREO is we're pushing on a lot of those things that you can't push on when you're an asset manager or you're a family yourself. The one thing we can really do is CREO. We can push on our families and make sure they're continuing that journey. And if they're seeing bumps in the road, help them figure out why and how to get around them. One thing that I wanted to add to what Jason was saying is that I've been really pleasantly surprised. So since we've been starting our work with institutional investors, we've been connected to many who are not part of Net Zero Asset Owners Alliance or the ILN. And I found that many don't have commitments but are actually doing the work to Jason's point. The climate is both a risk and an opportunity. And for some, they do start with risk, whether it's physical climate risk, which we're seeing a lot of in the marketplace that the World Economic Forum came out with a number last year saying that we lose 12% of GDP for every one degree of warming, which is a huge number. And that impacts every stakeholder, governments, investors, portfolios, corporations, et cetera. So that risk is real. The transition risk is also real and the uncertainty is very real. So I completely agree with Jason that every institutional investor I have spoken to, whether they're on the list of some sort of a commitment or not or thinking about it. Some are even thinking about it or how do you manage beta and the volatility? There's certain characteristics of investing in clean energy that actually helps manage that, different from commodities. So that's really interesting to see. And this is why we feel positive about the space in terms of what is the role of families in this particular moment. So CRIO plays continues to support the increase of capital flows in different ways at different times. Right now, we are expecting an increasing gap, as in some cases, government funding may be reduced in this space. And so families have a really unique superpower in a way. They can leverage their commercial capital and there it can be used as catalytic capital. We often speak about CRIO being horizontal catalytic capital, meaning that will leverage purely commercial capital but take higher risk and manage it in a way that no other investor can. And this again is anchoring new fund strategies, anchoring investing in new tech. And these families often come from operating businesses and can bring a lot of expertise to be able to manage that risk, right? They can take off takes, for example, to reduce the risk of a certain strategy. They can also do impact first investing. And this is where the impact takes precedence. They may end up generating alpha in that strategy, but the impact is the driver. And that is a choice of family members to do that because they care. No one else can do that in the world. And there's over 10 trillion of AUM by families in the world. And so that's something that we keep pushing forward, really making sure that any family who's doing this work is really well equipped to be able to do that catalytic work. The third piece is that they're philanthropists. And there is not enough philanthropy in the world to be able to solve this problem, not even close. However, you can use philanthropy in very catalytic ways. And where Creo is going with this is that we are going to engage more with our families to leverage philanthropy and program-related investments, which is an instrument that mostly American families can use to de-risk commercial opportunities. And this is what will allow the marketplace to keep moving forward. And right now, it is much needed. And so we're all heads down trying to do this work to ensure that we continue to move in the right direction. Thank you, Regina. Jason, close us out. You have lots of things that you could be working on. You choose to be focused, at least part of your time, on family offices with Creo. Tell us your take on why families are so important to the role they can play. Sure. Thanks, Jason. It's a great place to end. When we started Creo originally, we were a very small band of family offices and family office-backed investment managers, post-financial crisis in 2008, just trying to keep our companies alive through collaboration. And Eugene focused on that at the beginning. We grew from that to covering many asset classes, many types of investments, multiple geographies, huge family-owned businesses decarbonizing their operations, people starting and spinning out new funds, people investing off their balance sheet in both new technologies and deploying large amounts of capital to build new sustainable infrastructure. So we've seen this incredible growth, hockey stick growth, over 20 years. I think the role that families have to play now is just to keep doing what we've been doing, better, faster, more. But I do think that families are unique in their ability to be insulated from outside noise if they choose to be. And I think that we're seeing in our families a real persistence, a real innovation, and a real creativity around how to step into this moment. Not everyone. People are going to have issues. People are going to have challenges, whether they be macroeconomic or concerns about the policy environment or other dynamics. But for a large part, I think families investing through cycle are a great example of how you can make long-term returns in this sector when other people hesitate. So to me, the reason I'm so passionate about Creo, so excited about the time I spend with the families is that we have a very unique position in this ecosystem right now. Our goal is to stay firm, to keep investing, to do it smartly, to deploy the other forms of capital we have in clever ways that are catalytic, but really just to keep our eyes on the prize and stay focused because cycles happen. We're in an interesting part of the cycle and what families can do is stay firm and true to the mission and the goals that they have. So that's why I'm so passionate and focused on the role of families and this ecosystem right now. - Jason, Regine, thank you both for the work that you're doing and for your time today. - Thank you, Jason. - Thank you. - Thanks for joining us for this episode of Invested in Climate. Please remember to rate us on Apple, Spotify or Google. Find show notes, sign up for updates, get in touch and visualize your climate action at investedinclimate.com. This podcast is for informational and entertainment purposes only and does not constitute financial accounting or legal advice. Thanks again. [BLANK_AUDIO]