Mary Cerulli is the Founder and Executive Director of Climate Finance Action. Although we are both local to the Boston area—she resides in the very hip South End while I live closer to nature in the more pastoral Concord—we’d never met each other. A mutual friend introduced us. Since then we’ve been talking about ways to work together regarding the proper role of finance in dealing with climate change. At a lunch we had at the GreenFin 2023 conference in late June, I asked her if she’d be willing to do an interview with me and she kindly agreed. 

Mary Cerulli, Founder and Executive Director of Climate Finance

Eccles: Mary, thank you for taking the time to talk with me. I like to start my interviews asking a bit about your path to where you are. Mind telling me a bit about your childhood?

Cerulli: I was born in Manhattan and lived in Peter Cooper Village on East 22nd Street. Our family moved to southern Connecticut when I was six. I began sailing ⛵️when I was eight and two years later I went to my first Long Island Sound regatta. I sailed competitively every summer and worked as a sailing instructor during college. 

Sailing taught me about perseverance and flexibility. The path from point A to B is rarely linear. It’s also about teamwork and staying calm in a crisis. I still love sailing and do a few regattas a year as well as participate in Thursday night small boat racing. Sailing is a physical activity, so you need to be strong. 

Eccles: I have few regrets in life, but not learning to sail is one of them. Too late now. Anyway, where did you go to college and what did you study?

550 Pound Michelin Tire

Cerulli: Yeah, you blew it on the sailing, Bob, and you’re right that you’re too old to learn now. Just keep flipping 550 pound tires instead since it takes less intelligence and a much smaller range of physical skills. Just dumb, brute strength. But to answer your question, I attended Skidmore College and studied Geology. I enjoyed the discipline for its science as well as the art it took to prove a hypothesis. I was intrigued with how our planet is structured and the processes that act upon the ocean. I liked the mapping, the layers, and the fossils that help tell a story.

Eccles: What was your first job out of college and what did you do? 

Cerulli: After a stint as a geologist in Louisville, KY for the Defense Mapping Agency, which is now the National Geospatial Agency, I decided the hierarchical structure of a government job was not for me. 

I applied for a job at a subsidiary of New York Life insurance. They were creating limited partnerships and private placements in oil and gas, as well as real estate. I knew about geology and, before the interview, I read a book about limited partnerships and Real Estate Investment Trusts. I got the job! That shifted my career into financial services. 

Eccles: How did you get from oil and gas financing to working in climate finance? 

Cerulli: I really liked the pace of Wall Street. I was recognized as a person who could bridge the gap between the technicalities of the products and the marketing needed to attract brokers. 

After moving to Boston with my husband (married 33 years), I completed an MBA at Boston University with a concentration in finance. I was no longer working in oil and gas at that point. My work focused on U.S. distribution systems and packaged products, the rise of the registered investment advisor, deregulation of commissions, the growing sophistication of the wealth tech space… all that fun stuff. 

I was raising three daughters in downtown Boston when the Presidential election of 2016 made me stop in my tracks. It was a moment where I felt compelled to take action on issues that were important to me. I could see how our country was divided and our planet was in a tailspin. So I looked for ways my skills as a geologist and in financial services could be useful. 

Eccles: What did you decide to do after that Presidential election that Trump is still fighting about today?

Cerulli: I was working with a group of volunteers in Massachusetts on utilities and gas leaks when I saw a campaign led by former NYC Comptroller, Scott Stringer, to decarbonize the 20 largest electric generating utilities in North America. The campaign made a lot of sense to me. I understood the asset management business and the power of large investors. 

I thought Massachusetts should get behind it, too. So I approached the State Treasurer, Deborah Goldberg, and learned that a lot more goes into getting a fund to take action on climate than I initially thought. That was the catalyst for building a coalition in Massachusetts to move the MassPRIM board toward sustainability and how I ended up on the ESG committee.  

Eccles: Interesting, but ,Mary, not all of our readers are locals like us. Mind explaining what MassPRIM is and how its board is constituted?

Cerulli: MassPRIM is the governing body for the Massachusetts state pension plan that serves our state’s public workers and teachers The nine member board acts as Trustee for the Commonwealth and each retirement system that is part of the now $100 billion fund.

Logo of Climate Finance Action

Eccles: Thanks. That’s helpful. Now please explain why and how did your nonprofit, Climate Finance Action, come about? Tell me a little about what you do. 

Cerulli: A funder suggested I start my own nonprofit to replicate what we accomplished in Massachusetts in other states. In May of 2020, Climate Finance Action was born. 

For the past three years, I have built a team with decades of experience in union organizing, coalition building, and financial services. We provide education, stakeholder organizing, and research necessary to ensure financial decision makers use the tools they have to address the economic risk of the climate crisis. 

There aren’t many organizations who are getting in close at the fund level, understanding the decision-making structures and stakeholders, and staying involved in order to advance policies and strategies. We have found success in bridging the gap between finance, public administration, union stakeholders, and climate organizations. 

We’ve seen a lot of evolution over the past three years and a changing political environment around investor rights and environmental, social, and governance (ESG) issues. That’s really how we started following your work closely. 

Eccles: Yeah, the “ESG Culture Wars” have been keeping me pretty busy. But you are in a very interesting niche, and it makes me wonder how you’re funding your work. 

Cerulli: Fortunately, we have a good relationship with a re-grantor and have the support of a few funders who are testing us. It is a real challenge to get in the door at appropriate funders, especially since we have yet to establish steady funding to support a dedicated development person. The foundation world often seems like a labyrinth that funnels work in certain directions and walls off others. There are only a few funders who understand how capital markets can be leveraged to mitigate the climate crisis and associated climate justice issues. We’re working to connect with them. 

Eccles: Good for you and I’m impressed. Raising money is hard. Do you have any plans for raising more money? If so, what would be the ideal types of organizations to get it from?

Cerulli:  The best funders for us are those who recognize that systemic issues like climate change are complex and require multiple interventions. That requires organizations to get in close and establish strong relationships. We carefully map the decision makers and what the barriers are. Then, we design a pathway to change that engages and empowers trustees and local union leaders. That takes time and real organizing chops. To add to the complexity, every state is different, and the path is never a straight line—which reminds me of sailing!

Some funders want to fund a project or a campaign. We need funders who understand the larger dynamics of systems change and the time it takes to achieve it. 

Eccles: Good luck and let me know if I can help. 

Cerulli: Thanks, Bob. If you do, I’ll take you out on a sailing trip but promise to keep your hands off of everything on the boat except the beer 🍺.

Eccles:  Fair deal and I promise! But getting back to CFA, how has it evolved since its inception?

From left to right: Sarae Lewis, Danielle Fox, Mary Cerulli, Beverly Ortiz, and Susan Drury of Climate Finance Action

Cerulli: Initially we did quite a bit of work on specific campaigns, like the campaign to remove Lee Raymond, former CEO of ExxonMobil, as lead independent director at JPMorgan. We’ve worked on campaigns around climate proposals at large banks and other specific shareholder votes. 

Since then we’ve shifted our work to a more comprehensive thinking about how a fund truly assesses risk, delivers returns, and acts as a steward. We’ve found that people get excited about campaigns, but we need capacity and bridge-builders for lasting climate finance policy and implementation. 

Pensions funds are not just assets– they represent the compensation of workers, many of whom are represented by unions. Those public employees and their unions are key partners for this work. 

We recognize that stakeholders in the system—beneficiaries, board members, trustees, investment staff, and Treasurers—all have an important role and potential contribution. To that end, we see systems professionals and public administrators as more than just targets in a one-time policy campaign. We see union representatives and their members as more than just support characters to a campaign that was already decided.

We seek to grow their capacity and support their part in achieving viable climate finance investments and policy systems. We tend to work in places where the will exists to address climate risk in substantial ways. 

Eccles: In our conversations, I’ve noticed you talking a lot about workers. Why is that? 

Cerulli: This evolution took shape because we have people on our team with decades of union experience. Their deep history and knowledge of the labor movement helped shape our approach to ensuring stakeholders have a voice in the strategy. It keeps us focused not just on addressing climate change, but also ensuring the workers who depend on these funds have a dignified retirement. 

Eccles: I’m not a big fan of divestment and I think that we’ll need fossil fuels, obviously less and less, in the coming decades. How does CFA think about whether pension funds should divest or not? 

Cerulli: The divestment versus engagement debate has divided investors and activists alike for years and will continue to do so—probably forever. 

We just think about it differently. With diversified portfolios and the energy sector’s impact across industries, climate change is a systemic risk. It’s not just about fossil fuel companies. Investors must push for decarbonization in every asset class, every industry, and every company. 

We believe that by remaining invested in and involved with companies—especially those that depend on fossil fuels like utilities—we can continue to have a greater impact through voting and pressuring those high-emitting companies alongside other investors, than we would by simply divesting. 

That being said, we don’t believe funds should stay invested in high risk industries. It’s really about understanding and evaluating the risk of each company. A coal company which is doing nothing to address climate is at higher risk than a natural gas company with a viable net zero plan. 

Eccles: So what does climate action look like where you are working? 

Cerulli:  Most funds are universal owners on the public equity side; they can’t diversify away from system-level risk. Because climate change is such an enormous systemic risk, it is crucial that policymakers at the state level develop—and advocate for—a framework that insulates their constituents from the financial and economic harms of climate change. In addition, funds should look at the other asset classes and get external managers to engage their portfolio companies as well.  

Eccles: Makes sense. How do you do this?

Cerulli: We focus our efforts in three areas:  

• Investment policy integration: We recommend policies that bring a consideration of climate risk as financial risk. The treasurer offices and investment staff that are adding capacity to assess the material risk of climate across asset classes are taking the first critical step. This, of course, comes with policies that require companies to accurately report on their environmental impacts and risks. Once we recognize the material and systemic risks, we can create resilient and innovative portfolios to support the energy transition.
• Engagement and proxy voting: We look for policies that embed climate risk management and mitigation into proxy voting policies. We recommend guidelines that include specific language on how a fund will approach director votes, climate lobbying, and political spending, “Say on Climate” proposals, and other votes that align with reducing emissions to limit global warming.
• Stewardship: We believe funds should be transparent about their actions and share risk assessments and sustainability actions. We recommend regular reporting on progress. We’d like to see asset owners implement frameworks that measure investment strategy alignment with the UN Sustainable Development Goals. 

Real climate action means funds actively mitigating risk and investing in climate solutions rather than simple passive stewardship. For passively managed investment strategies, asset owners that request information from data vendors, index providers and asset managers can explore how to best minimize potential systemic risks associated with the transition. Passively-managed assets must align with a Low-Carbon Transition Investment Belief.

Eccles: What do you see as the challenges and opportunities to get this done in more places? 

Cerulli: I am inspired by what thoughtful individuals can do. I can see how collaboration through government, academia, and business along with peer-based community support can be impactful in a number of key states. Currently we work in WA, OR, CO, IL, MN, MD, MA, and VT, and we’re really excited about our work in CA. We also have good relationships in ME, CT, RI, and NM. 

We are working to bring together people with a wide array of specialties—unions, policy, organizing/building networks, communication, and finance. We need the stakeholders around the funds to advocate for risk assessments, stewardship reports, and policies that hold companies accountable for managing risks and holding global warming to under 2°C.

Building bridges can be complicated, especially among those with differing histories and viewpoints. Add in the anti-ESG noise and it can be a challenge for sure. Ultimately, building bridges and capacity takes time and deep relationships. 

Eccles: One last question if you don’t mind. I see that all of your work is being done in blue states. But it’s equally relevant to red states. Do you see any opportunities there or they’re just not ready to listen given their fervid, and largely nonsensical, legislative efforts against ESG?

From left to right: Mary Cerulli, Beverly Ortiz, Sarae Lewis, Susan Drury, and Danielle Fox

Cerulli: We work in areas where there is a desire to address climate risk. It was never intended to be a “blue state” vs. “red state” thing. In fact, a lot of pension funds in red states were taking ESG factors into account and voting in favor of key shareholder proposals. That’s changed with the ESG Culture Wars, but we’d be happy to do work in red states if and when there’s any interest.

As a small organization, we have to prioritize our time and choose our most likely path to durable change. If we have more funding, we could experiment in some areas where change might be more difficult, specifically red states where legislatures are overstepping in order to restrict pensions from considering material risks like climate change.

As I said previously, there’s a lot of funding for campaign-based strategies but inadequate funding for those of us that are working state-by-state to create durable, long-term change in policy. There’s a lot of opportunity to ensure that our financial system appropriately addresses the climate crisis and sets the standards for how companies operate for people and the planet. We are working every day to make the case for it from a risk and return perspective.

Eccles: Thanks again for your time and good luck with your important work. And let me know when you’re ready to set sail ⛵️ .

Cerulli: Thanks, Bob. Will do and you bring the beer 🍻!