The President and CEO of the world’s largest conservation organization, Mark Tercek, does not have your typical “green” resume. Before joining The Nature Conservancy five years ago, he was a partner and Managing Director of Goldman Sachs, where he worked for 24 years.
The transition from Wall Street to TNC did not come in a single bound. Between 2004 and 2008, Tercek headed Goldman Sachs’ environmental effort at the urging of then-CEO Hank Paulson. Paulson went on to become the U.S. Treasury Secretary under President George Bush II and Tercek went on to develop an understanding of what he calls “win-win opportunities” for the private sector and the environment. There are places, he realized, where business and conservation can not only intersect, but do so for their mutual benefit.
In his own words, that mutual benefit often required some creativity and a lot of bold thinking, but by 2008 he was confident that he could dedicate his unique business acumen to a greater environmental good. Tercek joined The Nature Conservancy that year and has gone on to spearhead several major environmental projects. In 2013, he co-authored the Washington Post and Publisher’s Weekly best-selling book, Nature’s Fortune: How Business and Society Thrive by Investing in Nature.
I spoke with him in late November.
Planet Experts: What is the mandate of The Nature Conservancy?
Mark Tercek: Our mission is to protect the lands and waters on which all life depends. We focus on land, freshwater, lakes and rivers, oceans and the climate. We want to protect nature because all life depends on nature. By ‘life’ we mean animals and plants – what people traditionally think of as biodiversity – but we also mean humankind, the people that live in and rely on nature.
We are the biggest environmental organization in the world, so we try to tackle really big challenges. We’re also well known for being pragmatic, deal-oriented, and non-partisan. We’re interested in getting things done in a practical way. That’s what distinguishes us.
PE: As the Chief Executive Officer of TNC, what are the similarities to working at Goldman Sachs, where you worked for 20 years, and what are the differences?
MT: There are many similarities – that surprises some people. I was a senior leader at Goldman, so I ran some big business units. Like at The Nature Conservancy, that meant managing very smart professionals. Goldman Sachs people in a lot of respects look like TNC people: smart, entrepreneurial, deal-oriented, hustling all around the world to make things happen. Obviously, banks do business deals, but The Nature Conservancy does business deals too. Of course, we’re doing a different kind of deal. We buy land, we create financial mechanisms for investing in nature. And like Goldman Sachs, we are a global organization.
There are also some big differences. We’re not a business. In hindsight now, being a businessperson looks relatively easy, because at Goldman Sachs we could manage our business to maximize profit or maximize market share. At The Nature Conservancy, the metrics for achieving our mission aren’t quite as clear.
Another difference is we have to raise a lot of money every year. In some respects it’s like being a businessperson. Parts of it are very rational. But there’s also an emotional part of fundraising – you want to inspire people, you want to motivate them at the heart level. That’s different. That’s been an interesting and fulfilling challenge for me, but it’s required some shifting in gears. You can’t be a fundraiser and inspire people on a pure business model basis.
Finally, at Goldman, although I was a senior banker, I was not the CEO. Being a CEO is different. I’m enjoying the experience and the rewards and the challenges of being a CEO, but it’s not as easy as it looks, I’ve discovered.
PE: Speaking of challenges, in 2012 you were appointed by New York Governor Andrew Cuomo to serve on the New York State 2100 Commission. Can you talk about the commission’s goal and your role in that?
MT: Governor Cuomo appointed that commission immediately after Hurricane Sandy. He said, ‘Your job is to advise me how the state of New York can protect itself from future Sandy-type events – and, by the way, I need the report by the beginning of January when I deliver my state of the state report.’ So it was a very accelerated work effort for one or two months. The commission members were just what you’d expect: a lot of government officials, transportation officials, power officials, insurance players, housing folks. Governor Cuomo also appointed two environmentalists, including me.
My role on the commission, on behalf of The Nature Conservancy, was to explore how the state could consider infrastructure investments to protect citizens from extreme weather, sea level rise, storms, etc. In addition to man-made, gray infrastructure, I emphasized the need for more emphasis on green infrastructure.
‘Green infrastructure’ means things like coastal ecosystems, dunes and marshes that absorb sea level rise and storms. That kind of advice, to my delight, was very well received by Governor Cuomo and his staff. As they make their investment plans for infrastructure, there is already intensified interest in investing in nature in that way. That’s a good example of the kind of thing that The Nature Conservancy does.
As I said, we’re very pragmatic, we’re very science-based, and we want to bring to decision makers’ attention a better understanding of the opportunities that nature provides.
PE: You discuss this type of thinking in your book, Nature’s Fortune.
MT: Yes, the theme of my book follows the same vein. When I joined TNC it seemed to me that too few people cared about nature. They’re living modern, mostly urban lives and they’re not paying as much attention to nature as I think they should be. We face some very big challenges. Also, people seem to think that addressing these challenges is expensive, or at odds with economic progress.
In my view, that’s wrong. I wanted to write a book that would get people’s attention and make them more aware of the environmental challenges that we need to address. At the same time, I wanted to demonstrate that there are win-win opportunities for businesses or governments to take care of an important need and, at the same time, benefit nature.
In the book, I argue that saving nature is the smartest investment we can make. I tell a lot of stories about how investing in nature can, as I described just a minute ago, protect a city from storms, or how a food or beverage company can invest in nature to protect water supplies or agricultural areas.
PE: So why do you think there is such a vocal segment that says business and environment cannot work together?
MT: It’s a good question. I’m a big fan of the environmental movement. I mean, I voted with my feet, right? I left Wall Street to join it. Back when I was on Wall Street I was a donor to many environmental non-profits, and today I’m a proud member of the community. So I want to emphasize that I have a very high regard for my peers at other environmental organizations. They’re great people who I admire very much.
But we’re not perfect. We, as environmentalists, have erred sometimes. The problem is, we believe so strongly that saving nature is a no-brainer. It’s a moral imperative. We have to do it, and we owe our kids and our grandkids ecosystems as healthy as the ones we’ve enjoyed. We believe these things so strongly that sometimes we’re not the best communicators. So when we come across people who don’t place the same priority on the environment, we sometimes make the mistake of kind of talking down to them, or being too challenging, or ascribing bad motives to them. So I think we’ve created some divisiveness.
This is a problem that goes beyond the environmental movement. I live in Washington, D.C. These are very polarized times – and that’s reduced trust and good will and it’s created obstacles.
A lot of folks are under the impression that saving nature will weaken the economy, or that it will hurt the average person. But I think that’s wrong. Investing in nature is in everyone’s best interest.
We have a lot of catching up to do, because we made a lot of trouble for ourselves. We made the environment a very partisan issue, which is a shame because it was under President Nixon – a Republican – that we had our most important environmental legislative progress. At this time, the Clean Water Act, the Clean Air Act, and the EPA were created, and the Endangered Species Act was passed. That all happened under a Republican president and with bipartisan support.
Unfortunately, today those same issues have a very partisan feel to them and that’s regrettable. At The Nature Conservancy we’re ferociously non-partisan, and we’re working hard to reduce divisiveness.
PE: You’re right about Republicans’ historical environmental advocacy. Going back even beyond Nixon, Theodore Roosevelt greatly expanded the national parks and forests in the United States and was a renowned conservationist.
PE: And yet it’s fallen so far onto the other side of the political tracks.
MT: Environmentalists are passionate about their cause. Passion is a great thing for any movement. But sometimes that passion gets in the way of calm reasoning.
The better practice is to establish common ground first. Don’t begin a conversation or dialogue with matters of disagreement. Rather, start with what you have in common, build trust, build a relationship and then take it from there.
You see that now with the debate over the Keystone pipeline. It should be possible to have a much more rational, fact-based conversation about that matter, but we’ve lost control of the dialogue. Everybody has. There’s responsibility in all camps, and it’s become a flashpoint, a symbol, apart from the circumstances themselves that are driving the conversation.
I hope that we can get beyond that. Nobody is against the environment, nobody is against nature – that’d be crazy. But we’ve gotten emotionally overloaded and we need to calm down, lower the temperature and get back to collaborative problem-solving.
PE: With the recent announcement by President Obama and Chinese President Xi Jinping that the U.S. and China will work to reduce their carbon emissions by 2030, politicians have started complaining anew that it’s not possible to cut emissions and build the economy. Are the two mutually exclusive?
MT: These are nuanced issues, and this is another mistake we environmentalists make. We like to make things black and white, very clear cut, but a lot of our work is more gray.
Broadly speaking, I’m confident that if we had a carbon tax, it would actually enhance our economic position even in the medium-term. Because the first thing that would happen if it cost more money to use fossil fuels is people would figure out how to be more efficient. We would use less energy and that would be a boost to the economy – we’d save money.
Second, it would level the playing field between renewable energy and fossil fuel energy. I think almost everyone agrees renewable energy will be more and more important in the future. So that would accelerate investment in those areas and that would be good for the U.S. economy.
Another thing people like to say is, ‘If the U.S. were to act and China didn’t act, then the carbon burning would simply shift to China where regulations are more relaxed. There’d be no progress for global climate and it would hurt the U.S. economy.’ All other things being equal, that might be true. Of course, we’ve always hypothesized that if the U.S. were to act then China would follow because they’re smart in China. They understand that they’ve got to deal with climate change.
That’s why I think this agreement with President Obama is so good. Now China is saying that it will act. And if you examine China’s economic five-year plans, their track record for achieving what they say they’re going to do is very high.
So I believe it is in the best interest of the U.S. to put a price on carbon. The politics of that are difficult right now but I think it would even be good for the U.S. economy in the medium term. Initially you’d have to regard it largely as an additional cost but I think the adjustment would be very fast.
We had a little experiment with this when I was a kid. When I was just entering high school in the early ’70s, twice we had OPEC oil shocks. You can think of that as a kind of carbon tax. We didn’t expect it. It was initially a huge hit to the economy, but very quickly the economy responded to that price signal, people shifted their behavior, and even their equipment – they bought more fuel efficient cars – and economic growth recovered.
We weren’t worried about climate change at the time, but greenhouse gas emissions fell during the period of the quasi “tax.” So we did a real, live experiment with the price on carbon, and guess what? Carbon emissions were reduced and it didn’t kill the economy. This time we could introduce the tax gradually, we could keep the revenue, we could lower other taxes so it could be revenue-neutral, and we could address the inequities that would come from, for instance, Ohio being a carbon-dependent state. I think we could do it and I think we should do it.
PE: In reading up on you, I found a previous interview you did in which you spoke about your transition from Wall Street to conservation. You said that one of the reasons you made the shift was because, ‘I want to be able to look my kids in the eye and tell them I did all I could to leave the world a better place.’ Are you there yet or are you still working toward that point?
MT: I’m definitely working toward it. It’s a great honor, and it’s really fulfilling to be engaged in the kind of work I am. It’s hard work – it’s really hard work – and it feels like it’s never done, but it’s just like any line of work. But I appreciate you asking that question because you’re reminding me how fortunate I am to be able to do this kind of work. I think most of my peers feel the same way, and so do our volunteers.
What I better understand now is that it’s very satisfying to be engaged in an important cause. And one of the fun parts of our work is that we provide that opportunity. Our employees, our volunteers and our donors are united by our cause and proud that we’re making good progress.
And as a parent it’s very satisfying, too. I have four children, and they pay attention to what I do. I think they are proud of me – and that feels good.
How are we doing? Well, on the one hand, we really have our work cut out for us. And I’m using the royal ‘we.’ I’m talking about all the environmentalists. All of the organizations are doing great work every day, and we’re getting good stuff done. But when we look at the big picture, we’re not getting enough done. We’re winning many battles, but are we losing the war?
At The Nature Conservancy, we say that means we’ve got to get better, bigger, faster – we’ve got to scale our work up in the fastest way before it’s too late. And I’m cautiously optimistic. I think we can do it, but there’s no room for slacking off.
PE: What are some current projects TNC is working on?
MT: We just announced a few weeks ago a transaction in the states of Montana and Washington. We’re buying about 165,000 acres of land. The seller is the Plum Creek Timber Company, a spinoff of the Burlington Northern Railroad, and this is land that President Lincoln gave them long ago as they were building their railroad in the west. So they’ve owned it a long time. It’s what’s called ‘checkerboard land,’ acreage that is in the midst of otherwise protected landscapes. So protecting these parcels really protects millions of acres – precious habitat for wildlife and ecosystems.
The land cost $134 million, so we can’t do deals like this all the time. But it kind of amazes me that a non-profit – thanks to our hardworking team and our generous supporters – can do a very big deal like this.
The problem with that kind of work is that it’s very capital-intensive. Sooner or later we run out of money, because money is a limited resource. Another category of work we’re very proud of is transforming how people use nature, which doesn’t draw on financial capital. It draws on our intellectual capital, our know-how. We’re doing – across Latin America especially, but now all around the world – what we call ‘water funds.’ We persuade some party that’s using water, like beverage companies, to invest in conservation of nature to protect their watershed.
So unlike buying nature, which is very expensive, this time we get the person or the organization who needs nature, to take care of it. Strategies like this are win-win, less constrained by capital, and therefore well-positioned to grow fast and make a very big impact.
Two weeks ago I visited one of these water funds in Cali, Colombia. In this case, the sugar cane grower association of Colombia is our financial sponsor. And sugar cane growers are hardly left-leaning, tree-hugging environmentalists. They’re business people. But they know they need water. And the watershed that they depend on is vulnerable because there’s been deforestation and bad ranching practices. So the sugar cane growers are providing the funds to work with local communities upstream in the mountains to reforest the area as well as put fences up to keep the cattle away from the river.
And they’re doing that because it’s a smart investment. That’s what I mean by investing in nature: Dollars going towards habitat and wildlife, improvement for the human livelihoods upstream—and better water supply downstream. That’s a current example of our win-win approach. It really doesn’t look so much like philanthropy – rather, it’s conservation that pays for itself.