Kaiser currently serves as Deputy Managing Director at
NatureVest, the impact investing team of The Nature Conservancy (TNC) where she leads a team developing investments that deliver conservation results and investor returns. Her team has closed $200 million of transactions since its launch in 2014, with plans to deploy $1 billion of impact investment for conservation over the next four years.
She previously worked as the Director of Innovative Finance at TNC where she developed the Conservation Notes, which has raised more than $25 million of debt capital from impact investors. Prior to joining TNC, she worked in community development investing at Citibank Municipal Securities/Citi Community Capital, served as Director of Technical Assistance for Partnerships for Parks in New York City, and worked in community-based conservation in Borneo.
As a master’s student, Kaiser was instrumental in the formation of the
Yale Center for Business and the Environment(CBEY), which is currently celebrating its tenth anniversary.
On Saturday, Kaiser will be recognized as this year’s Prospect Street Award recipient at the Yale School of Forestry & Environmental Studies (F&ES) Reunion Weekend 2016.The award recognizes a recent F&ES graduate who has made significant contributions to the environmental field and who exemplifies the spirit of the School through demonstrated leadership, innovation, and creativity.
We caught up with Kaiser to learn more about impact investing and how her time at F&ES helped prepare her for this career.
Q: I’m curious about your current work in impact investing and the ways in which your education here at F&ES prepared you for your career. What exactly is “impact investing” and why is it so important?
CHARLOTTE KAISER: Impact investing is the commitment of capital to support environmental and social outcomes while also generating a financial return. It’s a rapidly growing market. There are a number of different groups of investors who see the impact they’re trying to have as being greater than they can achieve in philanthropy alone and want to align their whole portfolio with the social and environmental causes they care about. You also have various movements — the divestment movement, socially-responsible investing, and others — converging on this idea that if you’re really trying to change the world, you can’t just do it with five percent of your portfolio; you have do it with the whole basket of capital assets available to you. One in eight dollars in the United States is invested for impact and until recently, it’s all been focused on social impact.
What’s been lacking is an opportunity for people whose personal kind of impact mission is focused on the environment.
NatureVest was launched as a way to bridge that gap and build more opportunities for impact capital to support conservation, particularly the mission of The Nature Conservancy. The environment gets two percent of annual philanthropic giving every year, and that includes the Humane Society. It is the smallest category of giving in North America. The pace and scale of conservation, of environmental degradation is far outstripped by the pace and scale of charitable giving, and public dollars, for that matter. The idea is, let’s get bigger, faster with impact investments.
Q: That seems like a pretty huge challenge. How are you approaching that and how successful have you been?
KAISER: We did some
foundational research a number of years ago to try to size the current market for impact investing in conservation and we found that in the five years between 2009 and 2013, foundation family offices and institutional investors allocated two billion dollars for investing in habitat conservation, for food and fiber production, and water quality and quantity conservation. Two billion dollars over five years — and that’s all private investment. And they were only able to deploy one billion because there is an absence of investable opportunities in conservation.
At NatureVest, we are trying to change all that. We are trying to accelerate the development, execution, and transaction so we can demonstrate transactable opportunities across the board for conservation.
Q: How is the money allocated? Do these investments go into a general fund at The Nature Conservancy or do they get allocated for specific projects?
KAISER: Right now we’re working in a couple of different areas and they’re all transactions that stand alone, separate from The Nature Conservancy. For example, last year we closed a fund in Australia that’s transacting in the water market in the Murray-Darling Basin. We’re buying water rights and leasing them to farmers, but also using some of the water to restore wetlands on communally- owned land. And we’re using private capital to do that. So that’s typically how we operate. We are trying to raise $1 billion dollars in the next four years, so we’re getting there.
Q: Tell me a little bit about your time here at F&ES and how it prepared you for this career.
KAISER: Well, it’s interesting. There was no “impact investing in conservation job” in 2007 when I graduated. When I came to the joint degree, I was really interested in nonprofit management and using business practices to improve nonprofit performance. And I was really interested in watershed management and I thought that that’s what I was going to do — be a really good watershed manager with business skills.
But that’s not at where I ended up. The world changed around us. I also got really interested in finance and investing in environmental markets.
Robert Repetto created an environmental science class in which we tried to value the environmental risk of a publicly traded company. This was early in the whole climate-risk-assessment-for-investor stuff. Back then everybody was very skeptical, and it’s fascinating to see how much the markets have moved toward sustainable investing in the intervening decade. But what was great for me was the willingness of the faculty to participate in this changing world with the rest of us students.
I was there also when we built CBEY, and
Brad Gentry and
Dan Esty were super-engaged and supportive of allocating resources there. Brad’s Emerging Markets for Ecosystem Services class really woke me up to the kinds of things that I wanted to be doing once the puck actually got to that end of the rink. It was totally not there yet when I graduated. But I figured maybe it would be eventually, and it seems to have arrived.
Q: You’ve been entrepreneurial in your own career, but having a strong science background seems to have been critical in your ability to apply it to these market-based solutions.
KAISER: Yes. Also, I remember my first F&ES open house where Brad said, “You’re going to come to F&ES and there’s going to be so much cool stuff. And you’re going to have to feel comfortable leaving a lot of candy on the shelf. You have to be really disciplined about what it is that you want to leave here knowing how to do it because otherwise you could leave here knowing a little bit about a lot and not really knowing how to do any of it.” That was such good advice. I ended up pursuing an M.E.Sc., looking at markets and willingness to pay for environmental assets. I felt so supported in my entrepreneurialism and I think that’s one of the other great attributes at F&ES. I had this awesome semester in my third year where I was taking the land use law class at the law school; an urban planning class at the architecture school; Brad’s class on markets and environmental services; and a strategy class from the business school. I got to be all over Yale, which is another great thing about F&ES and the university in general — how accessible the full institution is to the graduate students in the professional schools. I loved being in school.
Q: Speaking of school, you were one of the major driving forces behind the Yale Center for Business and the Environment (CBEY). How did that come about?
KAISER: I think there were eight or nine joint degrees [students] starting out my first year. It was the biggest year ever and it felt like we were on the cusp of growth. Things were starting to happen, but it was still a totally different world from the one we (now) live in. When we would say “business and the environment,” people stared at you like: “What is that, renewable energy?”
So we had that big year and then the next year there were 10 or 12 prospective [joint degree] students; all but two went to Michigan. And the reason is that at the time, the University of Michigan offered a full ride for the third year. We had no merit aid at F&ES, and some at SOM, and nothing for the joint degree. I think it was Gus’ second to last year and it was Joel Podolny’s first year [as the dean at SOM].
So we pushed really hard on the joint degree as a strong selling point. We told Dean Podolny, “We really think the joint degree with the Forestry School is a way to sell SOM as a school about leadership for business and society.” And that was kind of the pitch. Podolny and [former F&ES Dean] Gus Speth came together and committed resources to launch the Center. The deans put Dan Esty and Brad Gentry in charge, and they formed a search committee that included students and we hired a director [Bryan Garcia]. What we did was to really highlight for the administration the values and assets in the program. And I think that’s what led to the investment that’s been made. And you know it’s proven out. It is growing and it’s generating its own revenues, and it’s awesome.
Q: That’s a great legacy to leave F&ES.
KAISER: Yeah. I feel incredibly proud of it. I think that’s truly the spirit of Yale — student-driven change.
Charlotte Kaiser