As concern over the climate crisis has exploded in recent years, it was inevitable that growing numbers of celebrities and public figures would seek to use their platforms to promote the case for action.
Leonardo DiCaprio is a Hollywood veteran when it comes to climate campaigning, frequently backing calls for climate action through documentaries, social media and even at United Nations summits, not to mention the films he stars in. He made a particularly deep impact — so to speak — when he starred alongside Jennifer Lawrence in the hit comedy and climate crisis-allegory "Don't Look Up" late last year, which fast became one of the most watched films on Netflix.
Hollywood has never been short of environmental campaigners — Jane Fonda, Meryl Streep, Joaquin Phoenix to name a few more — and neither is the world of pop music. Greta Thunberg famously featured on an eponymous single by The 1975, which raised funding for Extinction Rebellion, while the likes of K-pop giants BTS and singer Ellie Goulding have spoken at UN meetings to help draw attention to ecological crises. Last year, former Pulp frontman Jarvis Cocker even released a single he described as "the world's first sustainable banger" to coincide with the UN COP26 Summit in Glasgow.
But there also appear to be growing numbers of household names who have recognized not just the urgency of the tackling the climate crisis, but the associated opportunity. Robert Downey Jr. recently invested alongside the aforementioned DiCaprio in a cell-grown salmon start-up in the U.S., former Arsenal midfielder Mathieu Flamini is CEO of a biotech firm, and Formula One champion Lewis Hamilton has put his name to a chain of plant-based burger restaurants.
There also appear to be growing numbers of household names who have recognized not just the urgency of the tackling the climate crisis, but the associated opportunity.
Mixing together the glitz and glamour of A-list celebrity alongside support for environmental causes and growing opportunities for green business is increasingly seen as a winning recipe — as Steve Oyer is well aware. The asset management industry veteran is CEO at US investment firm i(x) Net Zero, and knows a thing or to about the value of both the growing green economy and A-lister backing.
A signatory of the UN Principles of Responsible Investing (PRI), the firm last year ramped up its total capital investment across six companies involved in the energy transition and green buildings to $60.7 million, while boosting its net profit to $35.8 million. Earlier this year i(x) Net Zero listed on the London Stock Exchange, raising $13.6 million in the process.
It is a story made all the more eye-catching by the number of big-name backers i(x) Net Zero has attracted, including Red Hot Chili Peppers' frontman Anthony Kiedis; Airbnb co-founder Joe Gebbia; philanthropist Aileen Getty, member of the wealthy Getty family; and Chuck Clarvit, CEO of Clarvit Capital and former managing director and co-head of BlackRock Alternative Advisors. Former Conservative MP Nick Hurd, Minister of Climate Change and Industry under Theresa May's prime ministership, is also non-executive chairman at the firm.
Warren Buffet's grandson, Howard, even helped found the venture back in 2015 as a "permanently capitalized holding company'," alongside entrepreneur Trevor Neilson and green and emerging markets investor Pär Lindström.
Oyer is first to acknowledge the benefits of having well-known names on board in drawing attention to both the companies in which i(x) Net Zero invests.
Oyer is first to acknowledge the benefits of having well-known names on board in drawing attention to both the companies in which i(x) Net Zero invests and the broader climate and ecological challenges it is trying to address.
"The idea that we could get long-term investors to sit at a table, and then show that it's possible to do these things at scale, allowed other people to see that it resonated with them, and they would follow the investment pattern of the people that they respected," he tells us. "I think it's about long-term relationships in the beginning. And people like Trevor Neilson have a very strong footprint in the community of some of the celebrities and people that really were high profile about what they wanted to do for the planet. He offered the opportunity for them to collaborate."
He insists, however, that neither Howard W. Buffet nor his grandfather have any direct input into i(x) Net Zero's day-to-day running.
"Howard does not call me up for stock tips in the morning," Oyer jokes. "I just want to make sure you understand that. Howard is Warren's grandson, but he doesn't play an executive or management role."
Despite the big names behind i(x) Net Zero, Oyer is keen to stress the investment experience and credentials among its team, and its emphasis on long-term, catalytic capital to drive positive societal impacts. Oyer himself boasts over 35 years of business and investment experience, with previous stints at the likes of Brookfield Asset Management, Lazard Asset Management and NASDAQ-listed biometric software firm Saflink Corporation.
We're not a private equity fund that has a passive approach to deal flow and to holding on to investments.
"If you look at the team that has come together, these are investment professionals," Oyer says. "Some of us have worked together for 20-25 years. We all have areas where we've deployed and managed capital in the past, and built businesses. And that's really what is differentiating us. We're not a private equity fund that has a passive approach to deal flow and to holding on to investments."
Oyer describes i(x) Net Zero as a holding company "dedicated to creating opportunity to deploy intentional capital at scale, with measurable impact," by taking an active role in helping to grow companies — and its stakes in them — over time.
"We raise capital into the companies and build these businesses — not on a passive basis, but on a very specific and operational level approach that has created a lot of value over time," he explains.
At present, there are six firms in i(x) Net Zero's portfolio. WasteFuel — of which Trevor Neilson is also the CEO — produces biomethane, green methanol and low carbon aviation, road and shipping fuels from household and agricultural waste, and counts shipping giant Maersk as one of its backers. Carbon Engineering, meanwhile, is a Canadian firm specializing in direct air capture (DAC) of CO2, with projects including a facility it is developing in Scotland alongside Storegga to permanently remove over 1 million tonnes of carbon dioxide from the air each year. And Enphys Acquisition, listed on the New York Stock Exchange, is an investment firms specializing in Latin American renewable energy projects.
As we roll out joint ventures, plants and subsidiaries with the company, perhaps in certain geographic areas, we'll own that 20% or so.
On the built environment side of i(x) Net Zero's portfolio, meanwhile, are U.S.-based sustainable housing platform MultiGreen Properties, and Dutch climate data software, AI and machine learning specialist Context Labs. It is also invested in Sustainable Living Innovations, which aims to improve the efficiency of residential buildings, and is currently building the "world's first" net zero energy high-rise apartment building in Seattle, set to be completed this summer.
"Our goal is to own 20 percent or better of all the businesses that we work with," Oyer explains. "Sometimes we start out with 100 percent of the business when we're building it, but many times we start out with a smaller percentage, and then incrementally, you get the opportunity to increase that stake."
In some cases though — such as with Carbon Engineering and Sustainable Living Innovations — i(x) Net Zero actually starts off with a much smaller stake in the company. "But as we roll out joint ventures, plants and subsidiaries with the company, perhaps in certain geographic areas, we'll own that 20 percent or so," Oyer explains. "Because what we're really doing is leaning in, and helping to bring capital into them not just from our own balance sheet but from our backers and other sources. And consistently you'll hear this: we play above our weight as a small company."
Oyer is particularly enthused about the potential for sustainability in the built environment, as he sees decarbonizing buildings as a huge opportunity for change, as well as investment returns, without the need to shift capital into a completely new industry. Real estate investment is big businesses as it is, and together buildings and construction account for just under 40 percent of global carbon emissions, he notes.
"We were trying to give investors the opportunity to deploy capital intentionally in areas they already did, but doing it with the opportunity to have their capital deployed in things that could decarbonize the planet," he says. "If you can solve something like that with an investment that people already do with their capital, but do it in a way that gives them top-tier returns, it's a mind shift. We're seeing that happen."
It all goes back to me growing up in a steel town in Ohio, and seeing the devastation economically, when an industry pollutes and destroys the environment and ultimately creates economic and ecological disaster.
Oyer made the shift towards socially responsible investing just over two decades ago, as he became increasingly convinced of the power of money to do good, both for the planet and the bottom line. Such principles were instilled early on, he says, thanks to his upbringing in Youngstown, Ohio, an industrial center once known for steelmaking — and latterly for a Bruce Springsteen song of the same name. The song describes in somber detail the industry that characterized the rustbelt town that Oyer grew up in, with Springsteen singing of "Smokestacks reachin' like the arms of god into a beautiful sky of soot and clay" as money flowed into the area. But later, amid declining industry, the song then ends with the dark payoff: "When I die I don't want no part of heaven, I would not do heaven's work well / I pray the devil comes and takes me to stand in the fiery furnaces of hell."
"It all goes back to me growing up in a steel town in Ohio, and seeing the devastation economically, when an industry pollutes and destroys the environment and ultimately creates economic and ecological disaster," Oyer says of his belief in positive impact investing. "Bruce Springsteen wrote a song about the sadness and disaster of my town. The last industrial revolution changed the entire developed world. We got a legacy for that, and I lived that legacy — the steel, the pollution, all of that. But we have a chance to change that now — this is a new industrial revolution, and it's got to be the same mechanisms of capital that are deployed, but its intentional and can not only do all the things that we need to be a modern society, but it can do it to decarbonize and lessen the impact on the planet."
But it is hard to escape the sense that Oyer's sensibilities towards environmentalism, impact investing and catalytic capital are the exception rather than the norm within the wider asset management and banking industry. Environmental social and governance (ESG) investing may have rapidly become a major financial trend, but while bullish projections suggest the value of global ESG assets could exceed $53 trillion by 2025 — or around a third of total projected AUM worldwide — there are deep concerns over the lack of clear standards underpinning ESG funds and the risk of opening the door to "greenwashing."
And even attempts to put clearer standards in place for what constitutes a "green" investment have faced criticism, not least at EU level where plans to include fossil gas in the sustainable finance taxonomy have caused uproar.
The sum total of i(x) Net Zero's assets may represent merely a drop in the wider investing ocean, but it is attracting big names, top talent and strong returns.
Oyer believes both markets and regulators "have a serious role to play hand in hand" in stamping out greenwashing so as to "give people a lot of confidence that when they do invest things over time, these investments are being done properly."
Transparency and disclosure will be key to that, he reasons, while claiming that i(x) Net Zero's recent listing on the London Stock Exchange had "always been a dream of the founders" that will help to "democratize" its work.
Oyer also places great faith in the next generation of investors, bankers and financiers. "I will tell you this — I work a lot with students, and young people that are in finance, and they want to be in sustainable finance," he argues. "They want to do things with their careers that I didn't have the opportunity to do. You're going to see the next investment superstars and the next ideas coming and doing it in sustainable finance, because that is what is really going to change things."
The sum total of i(x) Net Zero's assets may represent merely a drop in the wider investing ocean, but it is attracting big names, top talent and strong returns on its investments, which could in turn play key roles in helping to decarbonize both energy infrastructure and buildings. For now, at least, it is a recipe that appears to be working — and if Oyer has his way, it may even help inspire the next "superstars" of the green investment world.
"I believe in this next generation and their opportunity to change the entire culture of what's going on in the markets," says Oyer. "I think there's a structural change with this generation, and that's what gives me hope."
