In this episode of Financial Perspectives, Tanya Suba-Tang sits down with Rachel Gee, Manager of FS Climate Change and Sustainability Services at EY, to examine how sustainable investing has evolved from a values-driven concept into a core financial discipline.

Rachel outlines how climate risk is already being priced across markets—from insurance disruptions and real estate exposure to emerging nature-based frameworks and AI-driven energy demand. The conversation explores why carbon was only the starting point, how biodiversity and water risk are influencing capital allocation, and where investors are finding opportunity amid volatility.

Looking ahead, they discuss what’s next: less headline noise, deeper integration into core decision-making, increased investment in data and risk modeling, and a shift from “sustainability strategy” to simply strategy.

Key Takeaways:

• Sustainability has become a central theme in finance, moving from niche to necessity.
• Climate risk is reshaping investment decision-making, particularly in insurance and real estate markets.
• Millennials and Gen Z are driving sustainable investing trends, integrating values into financial portfolios.
• The evolution of sustainability in finance is shifting from externality to core business strategy for firms.
• Nature-related risks are gaining attention, with frameworks like TNFD becoming essential in financial assessments.
• The future of sustainability in finance will see deeper integration into business as usual practices, beyond just headlines.

Lindsey Helman: Hello and welcome to Financial Perspectives.

Lindsey Helman: A CFA Society San Francisco

Lindsey Helman: podcast Where we explore trends

Lindsey Helman: shaping the investment and

Lindsey Helman: finance industry with experts in

Lindsey Helman: their field.

Lindsey Helman: This month, host Tanya Suba-Tang had the pleasure of speaking

Lindsey Helman: with Rachel Gee of EY.

Lindsey Helman: Listen in as they explore the evolution of sustainability into

Lindsey Helman: a core financial discipline and how climate risk is reshaping

Lindsey Helman: decision making across markets.

Tanya Suba-Tang: Rachel, welcome to the show.

Tanya Suba-Tang: Thank you so much for joining me.

Rachel Gee: Thanks for having me.

Rachel Gee: Glad to be here.

Tanya Suba-Tang: So as the Climate Change and

Tanya Suba-Tang: Sustainability Services manager

Tanya Suba-Tang: at EY, I thought you would be

Tanya Suba-Tang: the perfect person to talk about

Tanya Suba-Tang: sustainability and climate risk

Tanya Suba-Tang: for our Earth Day theme this

Tanya Suba-Tang: month.

Rachel Gee: I'm so excited to be here and talk about that.

Rachel Gee: It's a really fascinating topic and definitely a hot, hot topic,

Rachel Gee: that's for sure.

Tanya Suba-Tang: It definitely is.

Tanya Suba-Tang: And, you know, that's actually a perfect segue to my first

Tanya Suba-Tang: question to you, is that not too long ago, you know, let's be

Tanya Suba-Tang: real, hardly anyone in finance was talking about sustainability

Tanya Suba-Tang: or climate risk.

Tanya Suba-Tang: Right now it's front and center,

Tanya Suba-Tang: and I'd love to get your

Tanya Suba-Tang: thoughts on what you think

Tanya Suba-Tang: impacted this shift and what

Tanya Suba-Tang: significant changes have

Tanya Suba-Tang: impacted it over the past few

Tanya Suba-Tang: years.

Rachel Gee: I think that's a really interesting question.

Rachel Gee: and there are two core pieces to that, right?

Rachel Gee: There's the, what has impacted the shift and then why has it?

Rachel Gee: And I really, why has sustainability moved to the

Rachel Gee: center of finance?

Rachel Gee: if we really focus on that clear signal, it's, I think a perfect

Rachel Gee: example is insurance.

Rachel Gee: And, when we pull back,

Rachel Gee: sustainability has been at the

Rachel Gee: center of finance for a while

Rachel Gee: now.

Rachel Gee: We just really haven't noticed

Rachel Gee: it, but we saw it most recently

Rachel Gee: in twenty nineteen with kind of

Rachel Gee: Hurricane Dorian.

Rachel Gee: And there was a massive amount of damage to Florida.

Rachel Gee: and what happened was a rise in

Rachel Gee: premiums in Florida, Florida

Rachel Gee: insurance actually.

Rachel Gee: And so what we saw is that the

Rachel Gee: average homeowner in premium for

Rachel Gee: the state of Florida kind of

Rachel Gee: shot up and private home

Rachel Gee: insurance kind of withdrew, and

Rachel Gee: the state had to come forward

Rachel Gee: and not to kind of beat a dead

Rachel Gee: horse about insurance because

Rachel Gee: who actually enjoys talking

Rachel Gee: about insurance?

Rachel Gee: But I think this was one of the

Rachel Gee: most tangible examples of seeing

Rachel Gee: climate and sustainability in

Rachel Gee: finance.

Rachel Gee: Because how else do you think of

Rachel Gee: finance except for pricing

Rachel Gee: climate risk?

Rachel Gee: Right?

Rachel Gee: Like how else do you price it?

Rachel Gee: So when we focus on that, it's kind of evolved from not just a

Rachel Gee: values conversation, which I think is what most people think

Rachel Gee: of sustainability as, but really a balance sheet conversation and

Rachel Gee: how, how to price this and not to think about this even more.

Rachel Gee: But you also see this really in California too, right?

Rachel Gee: Like wildfire exposure in California.

Rachel Gee: there's been a global reinsurance repricing.

Rachel Gee: And once these losses repeat

Rachel Gee: risk is always going to be

Rachel Gee: repriced.

Rachel Gee: So those are those are one of the things that kind of keep me

Rachel Gee: awake at night.

Rachel Gee: And, before even kind of dive into this, I have to caveat that

Rachel Gee: these are my personal views, and not the views of my firm, but, I

Rachel Gee: think in terms of market cyclical cyclicality, there has

Rachel Gee: been a really big surge in sustainable investing and the

Rachel Gee: interest around this as well.

Rachel Gee: So across twenty twenty and

Rachel Gee: twenty twenty one, there was a

Rachel Gee: really huge, growing interest in

Rachel Gee: sustainable investing.

Rachel Gee: And generally speaking, the

Rachel Gee: trend of millennials and Gen Z,

Rachel Gee: They're really driven by their

Rachel Gee: values and they invest in in a

Rachel Gee: similar manner.

Rachel Gee: but there's been a kind of

Rachel Gee: familiar market cycle of early

Rachel Gee: enthusiasm.

Rachel Gee: Capital inflows, recalibration, rates rise, expectations reset.

Rachel Gee: These kind of things happen in a very cyclical manner.

Rachel Gee: So this isn't like a new thing in in many ways I would say.

Rachel Gee: And I, I don't know if you agree with me actually, but I'd love

Rachel Gee: to get your thoughts on that.

Tanya Suba-Tang: No, I agree with you.

Tanya Suba-Tang: I don't think it's a new thing.

Tanya Suba-Tang: But you made some very good points with Gen Z and thinking

Tanya Suba-Tang: and how now they're incorporating this into their

Tanya Suba-Tang: portfolios and expectations.

Tanya Suba-Tang: So, a quick question on, that is, you know, discussions about

Tanya Suba-Tang: climate change to sustainability in finance, once it was

Tanya Suba-Tang: discussed, was centered mainly on carbon emissions.

Tanya Suba-Tang: Right now, they incorporate

Tanya Suba-Tang: factors such as biodiversity,

Tanya Suba-Tang: water risk and total

Tanya Suba-Tang: environmental impact on

Tanya Suba-Tang: investment portfolios.

Tanya Suba-Tang: how are you and your team

Tanya Suba-Tang: adapting your investment

Tanya Suba-Tang: strategies to address this

Tanya Suba-Tang: broader spectrum of

Tanya Suba-Tang: sustainability issues?

Rachel Gee: That's an interesting topic because I think when we think

Rachel Gee: about sustainability and carbon particularly, we've always kind

Rachel Gee: of thought about carbon in silo.

Rachel Gee: Carbon has always been the gateway metric.

Rachel Gee: it's never been the end state.

Rachel Gee: it's very easy to measure.

Rachel Gee: It's easy to compare, easy to regulate.

Rachel Gee: But this isn't a thing that has been in silo.

Rachel Gee: And when we look back on kind of sustainability across the

Rachel Gee: spectrum and look at asset management in general, there's

Rachel Gee: always been kind of the ESG component of it, right?

Rachel Gee: Like governance has been a very

Rachel Gee: core foundation of asset

Rachel Gee: management.

Rachel Gee: When you look at how they think about it, they would say that

Rachel Gee: governance is what their sustainability program is kind

Rachel Gee: of run off of.

Rachel Gee: Whether or not you consider that

Rachel Gee: greenwashing or not just a hotly

Rachel Gee: debated topic.

Rachel Gee: But when you marry that in with carbon and the broader

Rachel Gee: biodiversity, nature and water agendas, these things are

Rachel Gee: systemic, systemic, and they're like systems frameworks.

Rachel Gee: So when water stress kind of

Rachel Gee: shuts down operations across

Rachel Gee: your entire value chain, that's

Rachel Gee: not just an E problem, that's a

Rachel Gee: social problem and it's a

Rachel Gee: governance problem.

Rachel Gee: So thinking about kind of

Rachel Gee: climate change and

Rachel Gee: sustainability in finance as

Rachel Gee: again, calling back to that

Rachel Gee: bottom line and balance sheet

Rachel Gee: problem.

Rachel Gee: These things have now become a broader.

Rachel Gee: Carbon was easy to measure, but

Rachel Gee: now we're thinking about these

Rachel Gee: as broad spectrum system

Rachel Gee: challenges.

Rachel Gee: And when we look at nature risk in particular, this becomes a

Rachel Gee: really big financial risk.

Rachel Gee: So nature risk frameworks are really gaining traction.

Rachel Gee: I think I have the TNF d, which is the task force for nature

Rachel Gee: related financial disclosures.

Rachel Gee: I think in this past year

Rachel Gee: they've just really released a

Rachel Gee: new framework.

Rachel Gee: one hundred and seventy nine

Rachel Gee: financial institutions are now

Rachel Gee: reporting alongside TNF d. I

Rachel Gee: think that's twenty five percent

Rachel Gee: of g-sibs are included in that

Rachel Gee: reporting representation.

Rachel Gee: There's a huge amount of nature

Rachel Gee: related risk that's being kind

Rachel Gee: of accounted for now because

Rachel Gee: having exposure to the

Rachel Gee: agriculture industry, when you

Rachel Gee: think about how many banks and

Rachel Gee: asset managers and private

Rachel Gee: equity firms and even insurers

Rachel Gee: kind of have exposure to that

Rachel Gee: are and are underwriting the ag

Rachel Gee: sector or even just forestry in

Rachel Gee: general.

Rachel Gee: And you think about mining and, blue bonds or deep sea fishing.

Rachel Gee: These are huge, huge industries

Rachel Gee: and massive amounts of capital

Rachel Gee: outflows and inflows that need

Rachel Gee: to be considered when you're

Rachel Gee: investing.

Rachel Gee: And just kind of thinking, calling back to that insurance

Rachel Gee: example I had a moment ago, I think the easiest example of

Rachel Gee: this is real estate.

Rachel Gee: Actually.

Rachel Gee: If you think of underwriting a high rise building in Miami.

Rachel Gee: Nowadays, you have to account for massive amounts of sea level

Rachel Gee: rise and like hurricane risk and flooding and whether or not

Rachel Gee: there's even going to be the ability to get insurance in,

Rachel Gee: cities like that.

Rachel Gee: So, so those are things that

Rachel Gee: we're constantly thinking about

Rachel Gee: when kind of advising clients

Rachel Gee: and, and just generally

Rachel Gee: speaking, considering the

Rachel Gee: broader market trends of this,

Rachel Gee: that's not to say that,

Rachel Gee: deterring people from, from

Rachel Gee: thinking of real estate as a

Rachel Gee: strong investment whatsoever,

Rachel Gee: but just generally speaking,

Rachel Gee: when you look at the real estate

Rachel Gee: industry, they are heavily

Rachel Gee: thinking about the physical

Rachel Gee: risks around their real assets

Rachel Gee: because there are massive,

Rachel Gee: considerations for stranded

Rachel Gee: assets and how you price risk,

Rachel Gee: particularly from a climate risk

Rachel Gee: perspective.

Rachel Gee: I think there's just another

Rachel Gee: really interesting component to

Rachel Gee: that too, in terms of like

Rachel Gee: revenue and structural demands

Rachel Gee: for this.

Rachel Gee: Because again, this isn't just a risk story.

Rachel Gee: There's a lot of upside opportunity to this.

Rachel Gee: So there's a big thing around clean energy financing.

Rachel Gee: that's been really driving meaningful change.

Rachel Gee: So if we think about kind of AI and data center build outs, I

Rachel Gee: think this is really reshaping our power infrastructure and

Rachel Gee: grid at scale.

Rachel Gee: And I think looking towards the future of this AI is it has

Rachel Gee: massive power draw.

Rachel Gee: It draws a huge amount from the grid.

Rachel Gee: We know that going forward,

Rachel Gee: we're going to continue using

Rachel Gee: AI.

Rachel Gee: That's going to be a continued trend.

Rachel Gee: No one is going to stop using AI.

Rachel Gee: I don't think anyone's going to argue with me on that.

Rachel Gee: But at scale, you can't continue to say that we are going to use

Rachel Gee: a finite number of resources to power this tool or this platform

Rachel Gee: that uses the same amount of energy as a small metropolitan

Rachel Gee: area in perpetuity.

Rachel Gee: That's kind of defeats the purpose of finite resources.

Rachel Gee: so how can you use renewable energy to support this?

Rachel Gee: And, what we're seeing is a massive amount of investment

Rachel Gee: despite kind of political headwinds blowing towards

Rachel Gee: renewable energy because there is a strong demand for it.

Rachel Gee: And you have to have this power infrastructure at scale to

Rachel Gee: continue meeting consumer demand and, and business demand.

Rachel Gee: So, I think it's an interesting case study, right?

Rachel Gee: That, despite all of the changes there, there, there's a growth

Rachel Gee: story to this and opportunity to make to make money.

Rachel Gee: And in spite of, kind of market headwinds.

Tanya Suba-Tang: Wow. Thank you for all that

Tanya Suba-Tang: wealth of knowledge and

Tanya Suba-Tang: insights.

Tanya Suba-Tang: I think you made some very, you know, great points in how,

Tanya Suba-Tang: sustainability and climate really is impacting so many

Tanya Suba-Tang: other sectors and branches.

Tanya Suba-Tang: like you said, real estate and so forth.

Tanya Suba-Tang: So, before I let you go, I did want to ask you if you had to

Tanya Suba-Tang: venture a bold prediction.

Tanya Suba-Tang: Where do you see climate change

Tanya Suba-Tang: and sustainability heading, you

Tanya Suba-Tang: know, in the next few years,

Tanya Suba-Tang: kind of just taking what you

Tanya Suba-Tang: said and how much of an impact

Tanya Suba-Tang: it really makes in other

Tanya Suba-Tang: decisions?

Tanya Suba-Tang: What is the next iteration of that?

Tanya Suba-Tang: What what do you think is going to be happening in the future?

Rachel Gee: Oh, well, I think there will be kind of two big parallel trends.

Rachel Gee: Sustainability.

Rachel Gee: will get quieter in terms of.

Rachel Gee: Market headlines or big, bold

Rachel Gee: news headlines, but it will

Rachel Gee: become very embedded in your

Rachel Gee: Bau.

Rachel Gee: There's going to be less branding, but more integration

Rachel Gee: into, say, your credit committees, your underwriting,

Rachel Gee: your asset allocation.

Rachel Gee: You're going to see a shift from

Rachel Gee: a sustainability strategy into

Rachel Gee: just strategy.

Rachel Gee: Secondly, I think you're going

Rachel Gee: to see kind of a risk mitigation

Rachel Gee: growth, budget growth

Rachel Gee: essentially.

Rachel Gee: So most North American businesses have experienced kind

Rachel Gee: of material weather related losses in the past year alone.

Rachel Gee: this is driving through Depending on physical risk

Rachel Gee: mapping, supply chain resilience and long term capital planning.

Rachel Gee: So you think about how this has impacted their supply chains.

Rachel Gee: There's going to be real investment in kind of

Rachel Gee: weatherproofing those for, for lack of a better term.

Rachel Gee: And I think the other thing, regulation is going to be messy,

Rachel Gee: but directionally, it's going to be really clear.

Rachel Gee: The the timing and scope across jurisdictions will ebb and flow.

Rachel Gee: That's always kind of been the case.

Rachel Gee: You've seen it in the seventies with the Carter administration.

Rachel Gee: You've seen it year over year across every administration.

Rachel Gee: It is super cyclical.

Rachel Gee: But the expectations around what these regulatory regulations

Rachel Gee: globally are driving will essentially remain the same.

Rachel Gee: And I think that's why many organizations will continue

Rachel Gee: doing this long lead time work.

Rachel Gee: So scope three scenario

Rachel Gee: analysis, stage data

Rachel Gee: digitalization.

Rachel Gee: Even amid this uncertainty

Rachel Gee: that's going to continue

Rachel Gee: remaining a long term

Rachel Gee: investment.

Rachel Gee: I think companies will continue investing in data.

Rachel Gee: so you've seen like incredible

Rachel Gee: amounts of satellite imagery

Rachel Gee: data.

Rachel Gee: There's some really, really

Rachel Gee: cool, data, third party vendors

Rachel Gee: that do awesome, scoping

Rachel Gee: activities around like how, how

Rachel Gee: to calculate carbon on trees and

Rachel Gee: like in the water and in the

Rachel Gee: forests and how, what the water

Rachel Gee: level is for ponds in the middle

Rachel Gee: of nowhere.

Rachel Gee: It's very interesting.

Rachel Gee: They have can like count people

Rachel Gee: in the middle of Thailand, like

Rachel Gee: their satellite imagery for

Rachel Gee: geospatial awareness.

Rachel Gee: These things I see a massive amount of continued investment

Rachel Gee: in, third party vendors to continue driving this because

Rachel Gee: you can't make strong decisions without good data.

Rachel Gee: So directionally, I think that's, that's where it's going.

Rachel Gee: Despite headwinds in regulation

Rachel Gee: and the cyclical nature of that,

Rachel Gee: organizations are going to

Rachel Gee: continue investing in their data

Rachel Gee: in kind of building out the the

Rachel Gee: pipelines to deliver on, on

Rachel Gee: regulation when it comes,

Rachel Gee: because no one wants to be

Rachel Gee: caught on the back foot and

Rachel Gee: reactive to regulation when it

Rachel Gee: lands.

Rachel Gee: So kind of in summary, I think sustainability in finance is no

Rachel Gee: longer really driven by enthusiasm and this kind of rah

Rachel Gee: rah, view that we've always had.

Rachel Gee: it's not driven by regulation alone anymore, but it's really

Rachel Gee: shaped by opportunity because there is upside to this and this

Rachel Gee: risk mitigation and like a need to operate globally.

Rachel Gee: Um, so the cycles will always continue.

Rachel Gee: I think the noise will always be there, but there is definitely

Rachel Gee: an underlying shift in the sustainable finance market.

Rachel Gee: And um, it's exciting to see it

Rachel Gee: change from an externality, I

Rachel Gee: would say to an input into our

Rachel Gee: bottom line.

Rachel Gee: So I'm excited to see what the future holds.

Tanya Suba-Tang: Well, thank you so much and thank you again for all the

Tanya Suba-Tang: insights you shared.

Tanya Suba-Tang: I know our listeners are going to take it all in and appreciate

Tanya Suba-Tang: it, and I hope we'll have you back in a couple of years.

Tanya Suba-Tang: And you can give us more updates and see if any of your

Tanya Suba-Tang: predictions come true.

Rachel Gee: hope they do.

Rachel Gee: Thanks for having me.

Lindsey Helman: Thank you to this month's guest,

Lindsey Helman: Rachel Gee For joining us to

Lindsey Helman: share her insights on

Lindsey Helman: sustainable investing, and

Lindsey Helman: climate risk.

Lindsey Helman: Be sure to join us for another episode of Financial

Lindsey Helman: Perspectives released on the last Tuesday of each month.

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