Tom Steyer: The jolly green banker
Banker and philanthropist Tom Steyer says the idea of business doing everything perfectly without government involvement is “ridiculous.” That’s why he’s fighting to convince politicians and CEOs that going green isn’t a sacrifice, it’s an opportunity.
Tom Steyer founded Farallon Capital Management and OneCalifornia Bank. He’s also an environmentalist and philanthropist. He and his wife funded the TomKat Center for Sustainable Energy at Stanford University, devoted to researching sustainable energy, and the Steyer-Taylor Center for Energy Policy and Finance, at Stanford’s Law School and Graduate School of Business.
This year, Steyer provided major financial backing to overturn California’s Proposition 23. It would have suspended the state’s 2006 Global Warming Act, designed to cut greenhouse gas emissions. He tells Fortune why businesses must drive the global shift to green energy and why Al Gore should invest in a calculator.
First, off, are the interests of businesses in conflict with environmentalism?
I don’t see it as a fight. In fact, if you look at what happened around Prop 23, it was not a business vs. environmental fight in the way that you think of the cliché. It was split. There were chambers of commerce and very large corporations that were officially against it, and not a lot of people who were officially for it. Quite a few people were staying on the sidelines.
I think that it is inconceivable that we will redo our energy creation and distribution without the private sector being massively involved. The heavy lifting on this is going to be done by business.
How do you make that argument?
In business, it’s deal by deal. Right after we defeated Prop 23 we hired salespeople to go around the state of California to educate landlords on retrofitting the 9 billion square feet of commercial office space in California. That’s a ton of jobs, and it literally has a five-year payback without government help and a three and half year payback with government.
We can do the numbers on what the retrofit costs. We can do the energy savings, we can see what they payback is, and you can see it’s a good deal. But you need to be able to understand both what needs to be done and then how that fits into the government.
Where does the government fit?
The government’s job is to set the fair framework so that businesses can do their math and make their investments.
This is not going to be done without governmental support, which is why we were fighting this prop. This whole idea that business does everything perfectly on its own, that’s just ridiculous.
The question is how are we going to have a level playing field so that new energy companies can compete fairly and kick some ass? Which is inevitably going to happen, by the way.
A move to renewables is inevitable?
It’s absolutely overwhelmingly inevitable, the question is how fast do we do it in the United States.
We can lead, we can do a good job, we can apply our brains to it, or we can lose our technological edge and let it be jammed down our throat.
Is there a partisan split on support for clean energy in the U.S.?
It’s funny—the other person at our firm involved in the campaign is my friend Margaret Sullivan who used to work in the Clinton administration. So we’re at an event at a solar energy installation place, and it included a lot of organized environmentally conscious people of color, mostly between the ages of 23 and 35.
The co-chair of our campaign was George Shultz who was a former Secretary of State under Ronald Reagan. So obviously not what you’d think of as a left-wing environmentalist kook. He was literally at Ronald Reagan night at the Bohemian Club. And I thought, that’s the campaign we need to run. That’s the breadth of the coalition that we need.
What can George Shultz bring to the campaign?
He’s somebody who’s had huge geopolitical responsibilities for the U.S. And he’s a former marine, so he’s talked to various senior retired strategists from different services. And they are entirely on our side.
I think that people are going to be shocked because I believe that the military can be out front on this.
Do you see environmentalism differently because of your business background?
I know I can see it with other people who are business people—they’re numbers people. All the people who have met payrolls made investments, there’s a very sharp and ruthless measurement system for people like me. It’s just completely different. I saw in the paper the other day that Al Gore was saying that maybe he shouldn’t have been for ethanol. It’s kind of like duh! Did you ever take out your calculator on that one?
Is the climate change argument isn’t the best way to motivate people?
If you’re struggling to make your mortgage payment and you’ve got three kids between the ages of 1 2and 18, and you and your spouse works, and someone says, ‘oh by the way the world’s ending,’ it’s like, please. You don’t need to tell me that.
The thing is to go say is that we have things to do that are good for you that are also good for all of us.
Americans can take on huge projects. But they need to understand why they should take on a huge project. The biggest thing we’re fighting here is inertia, it’s not evil.