Episode 1 Transcript: A Drop Becomes a Flood

Molly Wood:

Hi, everyone … I’m Molly Wood … and welcome to Everybody in the Pool …

Molly Wood:

A show about *solutions to the climate crisis … and the people who are working on them. This is … 

episode one.

Molly Wood:

If you’re not already familiar with me … I was a tech and business journalist for more than 20 years … at CNET … the New York Times … Marketplace on public radio …

Molly Wood:

But even for a tech journalist … the climate crisis got too big to ignore. But I kept hearing about problems … and not that much about … solutions. And I can’t stand a whiner.

Molly Wood:

So around 2017 … I went looking for people who were *working … on this problem …

Molly Wood:

Entrepreneurs … policymakers … investors … individuals …

Molly Wood:

And it turns out that the climate crisis is the biggest business story of our time … a moral *and … an economic imperative … an opportunity to change everything … about how we live … work … shop … do business … and *invest.

Molly Wood:

[pause]

Molly Wood:

So for today’s episode … let’s start with investing …

Daniel Naim:

My name is Daniel Naim, uh, founder and CEO of Fennel Markets.

Daniel Naim:

What we're building at Fennel Markets is a new way to imagine how someone can actually use their investments in this world to have a bigger voice, to affect issues around environmental sustainability, around companies, social issues and governance.

VO: 

At its most basic … Fennel Markets is an investment app … that lets you buy and sell stocks … learn about the *impact … of the companies you’re investing in … and get informed about your rights … as a shareholder.

Molly Wood:

But I hear you going like … come on, Molly, I’m not sleeping in a bed of money here … this is not for me.

Molly Wood:

And that’s where I say … QUIT WHINING!

Molly Wood:

But also … one of my theories about solving any big problem is that a drop … becomes a flood. 

And the way that people are investing their *money … is a noticeable set of drops. Here’s a little data from M-I-T.

Molly Wood:

IN 2021 … according to the S-E-C … about 2.7 *trillion dollars … were invested in E-S-G funds … out of a total of 250 trillion invested in public markets globally.

Molly Wood:

E-S-G stands for environmental … social … and governance … so companies that have some specific focus on sustainability … diversity and treating people well at work … and ethical business practices.

Molly Wood:

And that’s not all … there’s another half a trillion dollars in green bonds out there … debt … that you buy a chunk of … that goes to finance some kind of climate-friendly project … like a solar farm … or an environmental cleanup project.

Molly Wood:

And big investors are increasingly dumping fossil fuel stocks from their portfolios … about 40 *trillion dollars worth … as of last year.

Molly Wood:

And the idea behind Fennel … and some other companies and initiatives I’ll mention later … is to get *more money … moving in this direction … and create a flood of change. Because … I don’t know if you’ve heard … but money talks.

Molly Wood:

And Daniel started realizing this back in 2019 (CK) … while he was goofing off being a science genius.

Daniel Naim:

Uh, previous to this, I was doing my PhD in physics. I was studying actually dark matter. Um, and I was studying it in the Bay Area. And you know, the problem that I found was we had this fifth, uh, season in the Bay Area just called Fire , where, you know, we were using N 95 masks before it was cool.

Daniel Naim:

We'd go out into the, into the summer. You couldn't breathe, you couldn't see the sun most days. 

And I really started to think, you know, is this, is this what I wanna be spending my time working on? You know, do I wanna look back in 20 years and not say, okay, I helped the climate issue, or I helped, you know, some aspect.

Daniel Naim:

I did what I could. And so three major things were happening at the time and the world around me that kind of led to thinking about finance, thinking about how can really a collective group of people take action.

VO: 

First … Daniel told me … he was noticing Tesla’s stock price … went bananas. Investors didn’t care about the finances or the fundamentals of the company … as *he saw it … people were voting for a future with electric vehicles … and when a stock goes *that crazy … everybody wants … in that pool.

Daniel Naim:

All of a sudden, domestic and international policy started to change. So, uh, by 2035, only the sale of electric vehicles in both California and New Jersey. Similarly in Germany, all the stuff started to happen, and then you had, you know, other public companies dumping billions of dollars into the infrastructure around this space.

Daniel Naim:

So, you know, me being a physicist, not really thinking about, you know, I kind of went into physics to get away from economics, to get away from the real world to some extent. Um, you just start to think like, okay, capital markets talk money. Money has an impact on society, on politics, on all this stuff. So I thought, you know, I thought that was a very interesting case.

VO: 

Then in 2021 … there’s a hostile takeover … at an oil giant …

Daniel Naim:

With this hedge fund called Engine Number One. Um, their sole intent was to get a company like Exxon to re reduce their carbon emission. And the way that they wanted to do it was by taking Overboard seats at that company and they only had a 50 million fund.

Daniel Naim:

Uh, but they did it. They were successful. They took over four of the 12 board seats of ExxonMobil with the sole intent of reducing carbon emission.

VO: 

And then finally … there is a *revolution … of Reddit investors … blowing Wall Street’s MINDS by deciding to invest like CRAZY … in a failing video game retailer … driving up its stock to unbelievable levels … mainly to stick it to giant hedge funds … who were betting on Gamestop to fail. This was such a wild ride … that it’s now a Netflix documentary.

Daniel Naim:

And then obviously the last thing was the GameStop movement, where you had, you know, millions of investors coming together collectively to take on a financial institution to create change.

Daniel Naim:

And so in my head I thought, why can't you just, why can't we just put all three of these things together, right? Why can't we have a place where the younger generation and a lot of the older generation too, looks at the way that companies are either polluting or treating their workers or doing whatever and are waiting for politicians to create a change.

Daniel Naim:

Not knowing that they actually have the power to create that change themselves through their investments. And so that's kind of, that's what led to this. That's, you know, that's been kind of my driving ethos.

VO: 

So that ethos became an app … called Fennel … which as it happens … is launching to the public … today (CK), May 17 …

VO: 

And as I mentioned … at its simplest … it’s a mobile investing app … that gives you a lot more information about what you’re doing … than investing apps usually do. For climate purposes … a lot of that comes down to detailed data … about a company’s practices.

Daniel Naim:

We show you from zero to a hundred, how does this company's environmental standards across X, Y, Z themes rank relative to its peers.

Daniel Naim:

Okay? But we do one step further in which we show the underlying metrics. So you can come on and say, How many oil spills does this energy company have relative to its peers? Uh, how much carbon emissions does this company have? How much carbon credits does it purchase? What, what is its, uh, energy re renewable percentage, X, Y, Z. I mean, we have, how much waste do they dump, 

et cetera.

Daniel Naim:

So you as a investor can come on and. , and you don't have to look at the greenwashing marketing campaigns that say, Hey, we're a jet fuel company that's trying to reduce emissions in this space. You can see the numbers and see how they actually stack up against their peers.

VO: 

And once you’ve done the research …

Daniel Naim:

Either you can choose to stay away from this company to divest, which is what I think has been the standard for the past, you know, 30 plus years. But a new one that's starting to emerge is actually, you can look at, you know, quote unquote brown companies, companies that you think don't have great environmental sustainable practices, invest in them just to vote , just to put votes forward to try to change their environmental practices.

VO: 

I’m going to simplify the mechanism here but often … when you buy and sell stocks … there’s a brokerage in between … they get a fee or commission to complete trades. Sometimes they sell some of that order flow … as it’s called … for extra revenue …

VO: 

And *sometimes when you buy shares through a broker … they can control and even *sell the VOTE … that you get … as a shareholder. You get … one vote per share, generally.

VO: 

And it turns out … *that … can be powerful …

Daniel Naim:

On the point of divestment, it's, it is very important. But what you've started to find is that, um, divestment no longer has the same signal within the finance community. They don't, they don't really, they're not really scared of it. You've seen the kind of the run up on energy and oil companies and the profits that they're making, and people still chase the profits.

VO: 

But … *ALSO …

Daniel Naim:

There have been over a hundred percent increase in the amounts of proposals sent forward to companies around environmental, social, and governance standard practices within the past two years.

Daniel Naim:

And so, companies are starting to hire people on the board that focus on ESG metrics and their communication. They're starting to hire, um, investor relations teams internally to start to talk about esg. And they're starting to implement a lot of these environmental, you know, and social changes beyond just, uh, beyond just greenwashing.

Daniel Naim:

And so, you know, I don't think there's any like, yeah, I, I think it's just because this movement hasn't really had any time yet to, mature and to show the results. And I think engine number one and kind of this fight in ExxonMobil is the first, is the first meeting to really, yeah. Try to change things internally from the company.

VO: 

So the app tries to make it really obvious what shareholder votes are coming up … how you can participate … and how the drop can become a flood … and obviously this is the kind of thing I’m into because first of all …

Molly Wood:

A big part of my core thesis here … is getting the money involved … because I think real change comes from awareness … activism … and economics.

Molly Wood:

And this is a different way to consider … the impact that even a small number of votes … can have … and how the idea of pushing for change from within … gives big institutions … the ones everyone is always saying we need … in the pool? A way to use THEIR huge number of votes …

Molly Wood:

The way we want them to.

Daniel Naim:

It's a pain for them to divest, right? Pension funds, large fund managers, they don't wanna remove their position entirely. They want their position to become more valuable. And so the way they do that is they put their influence into the boardroom, into their votes, and they try to direct the company in the way that they think.

Daniel Naim:

It should be. And so you start to look at consumption habits of Gen Z and millennial. I mean, they don't even make purchases if the company's not sustainable, right? I mean, and true. Maybe right now there are about six to 10% of all purchasing power within the United States, but over the next 15 years, what is it?

Daniel Naim:

The largest intergenerational wealth transfer in history is about to occur. They're gonna start to account for more of this purchasing power. You're already seeing the companies that are adopting these policies. Benefit tremendously from it. And so the other thing to note here is like there are people within these large companies that need support.

Daniel Naim:

They see the vision. They see, hey, this company needs to become more sustainable and X, Y, Z. 

And either upper management or leadership doesn't listen to them. By providing these votes by, by sh, by the shareholders speaking out in support of these people, you actually.

Daniel Naim:

You actually get, give them a larger voice. You give them the ability to change things from within.

VO: 

Now before I leave you here … I’ll play you some audio from an ad Fennel did highlighting the importance of these shareholder votes … it’s a re-creation of the actual word for word conversation at a huge public company … in its public notes … about its board meeting.

Board Member:

We've been asked to produce a report into our plastic pollution, but single use plastics are a key part of our business.

Board Member:

Exactly. I advise you. Vote no on the proposal. I think we're all in agreement, so let's just vote. But one of our competitors box is committed to making reusable containers and another major competitor is cutting virgin plastics by 50% by 2025.

Board Member:

What's your point? My point is we don't have a virgin plastic goal. It would hurt us financially if we did so I'm advising you. Vote now. You know, these rights are made public. Anyone can access them. 

The people may start thinking that we don't care about the environment.

Board Member:

But no one will know where to find it unless.

Board Member:

Someone were to, I dunno, take it, make a short video and put it on social media.

VO: 

Ok that last part wasn’t in the board minutes … but everything else was … and they voted no on that … no on reporting antibiotics use … no on reporting lobbying activities and expenditures …

VO: 

and yes on an 84% increase for executives.

Molly Wood:

So I’m just saying … this … is where the power is. We can be in the room when this is happening … so why … wouldn’t we be?

MUSIC BREAK

Molly Wood:

There are other companies and movements and even institutions who are offering solutions that let you control your money and its impact … there’s a really interesting movement around changing the options for 401ks … in fact. Read all about that in this week’s Everybody in the Pool newsletter … which you can find … at mollywood … dot co.

Molly Wood:

And now … for one of the regularly occurring segments … on this show …

JOB BOARD STING

Molly Wood:

One of the things I suddenly spend a lot of time on … is talking with people who want to pivot their careers into climate …

Molly Wood:

like … I did … for example.

Molly Wood:

So if you’re one of those people … whether you are just starting out and looking for a climate job … or you’ve already made the leap … please … email me! The email address is in at everybody in the pool dot com … that’s in as in … I am in the pool. Get it? Real proud of that one.

Molly Wood:

So for this first episode … let’s start with someone who said … I have had a nice long career … but this climate thing … is a big deal … and it’s never too late … to go back to school.

TAKE SOT: Job Board cut

Molly Wood:

And that is it for Everybody in the Pool …

Molly Wood:

thank you SO MUCH for listening … and subscribing. I hope you’ll tell a friend … and leave a review … and send me your thoughts and your feedback and your ideas for people to interview. It won’t all be startups … it’ll be a lot of them … because I believe in the energy and innovation of this unique arena …

Molly Wood:

But over the course of the show I’ll be talking to business leaders … policymakers … everyday people … about all of the things we can do … and ARE doing … to find all the solutions we can … as fast as we can. No solution is too big … or too small … or too unexpected … or too obscure and creative … because we need them … ALL.

Molly Wood:

Thanks again for listening … and see you next week.