One of the powerful benefits of a Presidio education is the opportunity to tap into a community of change. At Presidio, we welcome our students to join and benefit from the insight of our talented and highly driven alumni, who are working to make a positive impact across both borders and sectors. In our going Alumni Spotlight Series, we take a moment to shine a light on some of the fantastic leaders and organizers from the Presidio circle, to learn about their experience as a graduate student and to discover where their path has taken them since achieving their degree.
In this Spotlight, we are excited to feature Andrew Rodriguez (he/him/his) from Pinchot (MBA 2014), now CEO & CIO of Change Finance, which manages the first Carbon-Neutral Certified Fund listed on the New York Stock Exchange. Read on to learn about Andrew’s current work and his Presidio experience.
If you could, please introduce yourself! Tell us a little about what a typical day might look like in your current role as CEO & CIO at Change Finance.
I’m Andrew, and I’m really grateful for the opportunity to be highlighted by a community that has meant so much to me over the years. Bainbridge Graduate Institute went through some twists and turns on the way to joining Presidio, but I met many of my best friends, collaborators, and mentors because of it.
In 2016, we launched Change Finance to build investment products for the growing interest in the Divest/Invest Pledge. At the time about $5T was committed—today the number is nearly $40T. At the time I was President and Chief Investment Officer, and it was my job to translate an ambitious set of thought leadership around people and planet into a next-generation, passive impact methodology. And make sure we kept the lights on.
Today it’s still my job to keep the lights on and it feels less like begging, borrowing, or stealing. As we came through the gauntlet of early startups—I prefer to call this “The Good Luck Wasteland” rather than “The Valley of Death”—I took over as CEO and Chief Investment Officer. We are a firm in growth mode, preparing next investment products while growing investments in our first strategy. My job is to hold the vision with my team and make sure we find the path to scale. Recently, that has involved a lot of work on partnerships, our advisory board, and with our next group of investors.
I’ll be honest that it also involves a lot of hard work to stay in emotional balance. I am a work in progress. I put a lot of work into knowing myself so I can be responsive from integrity. Financial services is a fast-paced, aggressive environment (at least outside of our firm), and we want to operate differently.
How did you come to Change Finance? How long have you worked there and what was your educational and career journey to get to this role?
After graduate school, I joined a small firm in Boulder to build private funds (known as Separately Managed Accounts) for high-net-worth clients that met our thinking on impact and sustainability. We proved to be good at it, and a year and a half later a mutual fund family in Denver came calling. They wanted to launch ESG ETFs and were looking for the right partner.
Rather than convincing individuals to invest one high net worth client at a time, this allowed us to democratize the kind of investing that had been exclusively available to wealthy clients. I was bit by the scale bug and have never looked back. If the impact scales with the business, it’s worth doing in my opinion, and this does.
While in graduate school, I was fortunate to work for Adam Seitchik and Natasha Lamb (another BGI alum) on The Highwater Global Fund, started by Paul Hawken. I wrote 20-page ESG SWOT analysis on companies from Amazon to Unilever and presented it to their investment committee. But prior to Bainbridge Graduate Institute, I had been a pastor and life coach.
For those of us who aren’t as familiar with the terminology, talk to us a bit more about the nature of an exchange-traded fund (ETF) and why it’s important that Change Finance has listed one that is carbon-neutral.
Exchange-traded funds are a lot like mutual funds, except they trade on an exchange (and a few other things). They are often passive—meaning we don’t actively buy and sell stocks, but rely on an index—and often have lower fees. We charge 0.49% for our first strategy, while many mutual funds cost 1.00% or more.
ETFs are coming to replace mutual funds as the dominant investment vehicle for the public to use. This is in part because passive investing has regularly outperformed active investing, and in part because of the cheaper fees. They are also easier to trade and have tax advantages for the investor. There are well over 2,000 ETFs in the U.S. alone, and more are launched every year.
Carbon neutrality is often the place for greenwashing, and corporations and investors are tripping over themselves to commit to be Carbon Neutral or Net Zero by 2050, or 2045, or a few by 2030. There’s even a pledge. But we know that this is grossly insufficient, and doesn’t address the real science. The IPCC Report this year confirmed that we have baked in (no pun intended) no less than 30 years of temperature rise, even if humanity were carbon neutral today. Today.
So, we figured out how to make our strategy the first Carbon Neutral Certified Fund (our fund has been in the market since 2016). Nobody should wait until 2045. Given the milquetoast commitments from the world’s largest investors, we decided to do it right away, and do it in a way that is real. Not all carbon offsets lead to real, verifiable, and additional carbon in the soil. There wasn’t a certification, so we developed one in partnership with a couple of firms: Verity and Ethos ESG. We work with Grassroots Carbon to sequester the carbon, a firm incentivizing ranchers across the country (including marginalized or excluded indigenous and BIPOC farmers) to regeneratively graze their animals.
The certification exists now, and we are pushing other asset managers to copy us. Tell your favorite asset manager to call me.
Give us a window into the definition and practice of greenwashing in the financial sector—how has this commonly manifested within Wall Street?
Wall Street has been impossibly slow in realizing what we all know: sustainable business is better business. And yet, they have all the power to do it. We say that finance is the mother of all human systems – where the capital goes momentum follows. It’s upstream from everything.
Larry Fink, the CEO of Blackrock, manages the largest asset management firm on the planet. It’s big enough that if he says jump, CEOs around the globe ask how high. He holds enough power to stop climate change singlehandedly, and he isn’t using it. He would be the next Jesus if he did. He writes letters about how much Blackrock is doing. The market is rewarding him for letters and actions that are insufficient to the challenge he understands.
We’ve seen a dramatic rise in ESG since 2016. The amount of invested assets has doubled, and some estimate more than $40T globally uses some level of ESG screen. Asset managers are making Net Zero pledges, rebranding conventional funds as “ESG Aware,” and launching new strategies with impactful sounding titles while holding many of the same names. Know what the fund holds or assume you’re not going to be happy when you do.
What does it mean to finally have a way to certify an investment portfolio’s carbon footprint?
There have been ways to calculate your carbon footprint for years, though the measurements are getting better and better. We have Carbon Disclosure Project to thank for that. But quick point: carbon footprint is nothing more than fun accounting. Our fund had a low carbon footprint already, but that didn’t change the carbon footprint of humanity a lick. Just because we don’t invest in Exxon, that doesn’t mean their carbon isn’t going into the air anyway.
If we can get other asset managers to see the value in certifying their funds as carbon neutral, we have developed a certification that does what it says it does. Only real carbon sequestration qualifies for certification, so whenever an asset manager agrees, real carbon is neutralized. We set the standard before it could get greenwashed.
Change Finance has partnered with a grassroots organization to truly deliver on the promise of a carbon credit—tell us a bit more about this organization and the work they do with Change Finance.
The group is called Grassroots Carbon, and we are very excited about their work. Their carbon sequestration meets the strictest standards, so we know what we pay for will stay in the ground permanently. And as important, they are working with indigenous and BIPOC farmers, many of whom were already utilizing regenerative practices, but were excluded from carbon credit markets.
How do you feel your experience at Presidio (BGI) helped prepare you for the work you’re doing now? Was there a moment in your time as a graduate student that has stuck with you and directed your work since?
I learned how to speak the language of sustainable business when I attended Bainbridge Graduate Institute. I’ve never looked back. What we learn here translates to investing, and firms from Blackrock on down are now looking for people like us.
In my second year, I was lucky to do a fellowship with Arjuna Capital, building ESG SWOT analysis for publicly traded companies the world over. At the time, I had less than zero interest in public markets. This is where impact went to die, I believed. It certainly wasn’t exciting to me.
In my first presentation to the investment committee of the Highwater Global Fund, something clicked. I came prepared with my recommendations on companies, and I had taken it upon myself to draft a gender lens investing policy that I hoped they would consider. The insights were well received, and this group of highly accomplished financial professionals was asking complicated sustainability and business questions that I had an answer for.
I realized then that BGI had given me something that would serve me anywhere, and that I could move a lot of money from harm to healing if I got even better at this. And I realized that anyone could be taught finance—not everyone could be taught to care as we do.
What would your advice be for an aspiring sustainability changemaker looking to make an impact in the financial sector?
Say yes to as many opportunities as you can while you are in school. Use this window to email people you should have no business emailing. Tell them what you care to fix in this world and ask them for advice. Do your homework, and theirs. This goes for any changemaker.
If you are sold on sustainable finance, this a good time to be getting into the work. Use the advice above and get a job or internship with a firm that cares as much as we do. Maybe get two if you’re crazy. If you want the smoothest path, consider compliance: it’s a thankless job, so there is always a position. If you like the startup world, ESG data is the next frontier.
What initiatives or steps come next for you and for Change Finance?
We’ve got a little less than ten years to move billions of dollars and inspire trillions more. We know that it is crazy to act like we can solve climate change alone, but we hope a lot of firms like ours will try anyway. Maybe it will add up.
We have just enough time to turn the companies we have into the good ones we need them to be. That goes for every company: from Exxon to Bank of America to Danone. In order to do this, we need to stop being afraid of power.
When we manage enough assets, we can affect the price of a company’s stock by inclusion or exclusion. The number one decision-making factor of CEOs has been shown to be stock price performance. We can incentivize companies to do the right things—even for the wrong reasons. I’d care more about that if we had time.
We plan to build this power next. The more investments we manage, the more change we can push. Expect to see us partner with a larger firm on Wall Street and begin to launch following strategies at a much faster rate. And expect us to continue innovating on impact. There are whole categories of investing that have never been adequately addressed, many on the social impact side. I believe that if we truly hope to solve climate change, we have to start saving it for everybody.
And maybe we’ll be the first financial services firm to recruit from Presidio, but I sure hope not.