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Hi Ian - I've just watched your interview on Planet Critical and I really like the idea. I had several questions though that I would like to ask. I'm not and have never been in finance so it's possible that my ignorance of the sector is causing my lack of understanding. The questions I have are 1. Why would pension fund managers necessarily chose climate friendly businesses to invest in with the change of law? Are there not neutral investments that would also qualify? 2. The sort of investments that are needed for meeting climate objectives seem to be higher risk than such funds would normally go for, particularly if they were start ups or involved novel concepts such as the buying of multi-billion oil companies to redirect their business. 3. Assuming you succeed in Mass., how do you see this scaling up to reach the level of investment needed to make a real difference globally? These are questions I am genuinely interested in. Having retired recently, I have had more time to understand the peril we are in and economics seems to be a key area for sparking change generally. Look forward to understanding better!

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Hey Richard. I hope I answer your questions satisfactorily.

1) Pensions are under no obligation to finance anything to do with climate. Our argument is that it's within the fiduciary's purview to consider an investment in climate because it benefits their end users. It's important that people get that we are not telling fiduciaries what to do, but rather telling fiduciaries that their choices are due for better scrutiny. The "free ride" is over. That said, we introduce the idea of "fiduciary-grade" investments that tick all the boxes we are after. What those are depends on how we package investments that do the job we ask. We argue that fiduciary is a two-part job: financial performance and curation of the future. This is not the status quo and we offer a correction. Does the fiduciary choice make a minimum return and curate the future?

2) Every investment has risk. The climate sector does not have more risk than other sectors. BTW, what is the definition of risk, of loss, when it comes to a pension fund? A so-called green business is not less lucrative than a toxic business. That's just not the case as a generalized meme and there are many great ideas left on the white board because pensions choose to the status quo than curate a future for beneficiaries. I look forward to fiduciaries digging in to the opportunities presently unfunded because they don't fit a traditional risk or multiple model.

3) We will succeed in MA. Maybe not this go around, but the door is open. When we got this bill accepted in February of 2023, the world became safer -- not instantly, but the way was paved to scrutinize fiduciary duty and public pensions. My hope is that fiduciaries self-regulate -- take on these ideas without the legal challenge. Financial excellence at the expnese of a quality future is everywhere -- but half the job. When we succeed MA the "writing is on the wall" and fiduciaries globally will have to defend their choices as fiduciaries across all of their benericiary classes.

Hope that helps.

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Thank you for taking time out to respond. I like the idea of resetting the ground rules as this doesn’t restrict the possibilities that a more directive approach would. I guess your job as Bank of Nature is then to nudge fund managers in the right direction. I wish you success and look forward to some positive news from the senate!

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