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Peter Bachmann, Managing Director at Gresham House, outlines the key investment themes for Gresham House and their sustainable infrastructure fund, including vertical farming, decarbonisation, and health and education. He also examines the role of nature based solutions and how impact funds are making strong financial returns.
Welcome to the Sustainable Finance Guernsey podcast page.
Guernsey Finance is a joint government and industry initiative tasked with promoting and connecting Guernsey as a leading international finance centre.
Named as one of the Green Finance Guide's top 10 must-listen sustainable finance podcasts, our broadcasts feature news, insights and discussion about green and sustainable finance, and the contribution which Guernsey, as a global leader in green finance, is making in this space.
Rosie Allsopp: Hello and welcome to the latest Guernsey Green Finance podcast, rated one of the top 10 most useful sustainable finance podcasts by Green Finance Guide. Guernsey is one of the jurisdictions leading the way in green and sustainable finance, and as part of this podcast series, we'll be speaking to and learning from some of the leading global figures in the field. My name is Rosie Allsopp. I'm Communications Director at We Are Guernsey, the promotional agency for Guernsey's finance industry. Today, I'm delighted to be speaking to Peter Bachmann. He's Managing Director at Gresham House PLC. Dating back to 1857, Gresham House is a specialist alternative asset manager listed on the London Stock Exchange with more than £6 billion of assets under management. It's devoted to sustainable investing. A range of investment strategies are deployed by the firm with enhanced expertise focused on forestry, housing, sustainable infrastructure, renewable energy, and battery storage. Today, among other topics in the climate finance space, we'll be discussing the launch of Gresham House's latest sustainable fund and exploring its aims and objectives. Welcome, Peter.
Peter Bachmann: Hi, Rosie. Great to be here.
Rosie Allsopp: Oh, it's wonderful to have you with us. To kick off, I'd like to introduce you to our listeners. Can you tell me a little bit about yourself, your background, and your career to date?
Peter Bachmann: Okay, I'll do my best. I'll try to pick up the interesting bits, and you can tell me to stop if you think I'm rambling on. Going way back, I started my career about 21 years ago in investment banking, like quite a lot of people in the asset management world. I started out in Australia at a financial services group called Challenger, where we were doing a lot of corporate finance, M&A-type advisory work. In the early 2000s, we did a lot of work with the wine industry, and we ended up setting up an infrastructure fund called the Challenger Wine Fund. This fund grew to be one of the largest owners of vineyard wine infrastructure in the world. One of the businesses we backed was Delegats, which created the Oyster Bay wine brand off the back of the vineyards that we built with them in Hawke's Bay, Marlborough.
Peter Bachmann: So you've probably, yeah, you've probably had Oyster Bay, so I can say I had a very small hand in getting that off the ground. From there, within Challenger, we saw that as a platform to start doing more infrastructure. I helped create the real assets and infrastructure division. We began working on a range of typical infrastructure assets like mobile phone towers and water companies, but we also did some pretty esoteric things like alpaca farming and paper processing mills. So, quite a lot of infrastructure.
It was a great experience that allowed me to accelerate my career quickly, progressing to being a main board invitee quite regularly by the age of 26 or 27. That was brilliant. But then I thought, where do I go next? I traveled to the UK on holiday quite a lot and felt like I had to move there. It was a great place to be, and from a career perspective, infrastructure was a big asset class in Australia, typically making up north of 20% in most pension fund portfolios. In the UK, it was less than 1%, so I felt there was an opportunity to apply what I'd been doing in Australia to the UK.
I arrived in 2004, with no job, but felt like I better find something interesting to do. Thankfully, I managed to find a few different offers and ended up choosing a relatively small shop at the time called Secondary Market Infrastructure Fund, or SMIF. They had just done a buyout from Abbey National and Babcock & Brown to create an asset manager focused on the PFI/PPP market. I was one of the first employees and the first front office employee at the time.
When I joined, we had about 18 assets. Through the various incarnations of the fund, we ended up with 118 assets, or about £5 billion worth of capital value, covering everything from roads and hospitals to schools across the UK and Europe. That was an invaluable experience for me. Being involved in so many deals, I personally led or was very closely involved in about 82 of those investments over that time. It was a huge learning experience. I was also fortunate to be made a partner before I was 30. It was great to get so involved in the management of a fund like that.
In about 2007, we had a brilliant opportunity to exit that fund because our lead investor, Star Capital, was coming to the end of their fund life. We sold SMIF in 2007 for just under £1 billion, generating a return north of four times multiple for our lead investors, so everyone was very happy. We sold the fund to Land Securities, a very large property company in Europe. They wanted to start looking at renewables as well as infrastructure, which was my segue into the renewables world around 2008. I continued doing infrastructure but also led the team looking at various initiatives to create a more sustainable future.
I spent a couple of years within Land Securities' Trillium business and was then approached to set up a new business focused on waste-to-energy and renewables. In 2010-11, I joined up with a couple of other people to create our own business called AIDC, where we developed assets and invested our own capital into projects. I had nearly six years as a developer, which was quite illuminating. Sitting on the other side of the fence for so many years, I learned all the tricks of the trade in development projects. That was another invaluable experience in terms of my learning.
During that time with AIDC, I started doing some work with Scottish Equity Partners (SEP). We helped raise, invest in, and manage a fund called the Environmental Capital Fund (ECF) with SEP, focused on renewables and environmental infrastructure. That went really well. We sold that fund in 2019, generating a return north of three times multiple, and we think we had the best performing fund of its vintage.
Around 2018, I started to think that renewables were great, but there were other environmental and societal problems that renewables alone couldn't fix. That was a lightbulb moment for me. I started backing an early-stage business with a professor named Dr. Josh Brody, who aimed to democratize education. In 2018, I began investing my own money into his business called WOLF. By the time we ended ECF in 2019, I thought I might retire, but I had already started working with WOLF and was approached by other early-stage businesses.
Between 2019 and 2020, I invested more time and money into early-stage sustainability companies, feeling they needed the most help. Around that time, I was speaking with a brilliant entrepreneur named Jasper Smith. He suggested that I could have more impact with more financial backing. That was another lightbulb moment. Around that time, Tony Roper from Gresham House called and asked if I would be interested in helping them manage their funds. They were prepared to move the strategy further down the sustainability path, which interested me.
I joined Gresham in June 2020, and since then, it's been a great experience. We've achieved a lot. To sum up that long-winded background, I've been doing this for 21 years, investing in over 200 infrastructure assets and sustainability companies. It's been an incredible journey. The great thing about what I do is that I really love it. What we're doing at Gresham with our suite of strategies has meaningful impact. I genuinely feel that we're doing something good.
Rosie Allsopp: I can feel the enthusiasm in your voice as you're telling me this. It sounds like you've had a really fascinating and diverse career journey. We'll talk a bit more about Gresham House in a second, Peter, but before we do that, I wanted to talk to you a bit about COP 26. For us, it's always interesting to find out how our podcast guests feel about the event and get their views on it. So, I'd like to ask you, did you think it was a success? Do you think there's anything that COP 26 missed that could possibly be addressed at COP 27 in Egypt?
Peter Backman: Look, at COP 26, I think whenever these events come around, they are great in that they shine a light on the problems we face, particularly around the environment. If nothing else, that's quite useful. But I do feel like they missed a chance with COP 26. They had been teed up, really off the back of Paris, to come back and say, "Look, yep, all the countries are signing up to a globally synchronized approach to tackling this." For me, it almost felt like at COP 26, we went backwards from that. People were rowing back, left, right, and center, from these 1.5-degree commitments. It felt like we were a lot further away from perhaps a unified carbon tax, which I think is probably the only way that will ultimately change behavior. So, I was a little bit frustrated. I'm sorry to say that I would like to be more positive about COP, but that was probably the enduring message I took away. I desperately hope that going into COP 27, and also COP 15 on nature, we can start to take a more joined-up approach and find a way to tackle the problems we face in a unified way.
Rosie Allsopp: I think you're probably not alone in feeling frustrated with the eventual outcome of COP 26 at all. So, if we talk about Gresham House, can you tell me about its history? I know it dates back to the mid-19th century, but can you tell me how and why sustainability became part of the business model?
Peter Backman: Yes, Gresham House was technically founded in 1857 by Thomas Gresham, who was quite prominent in society at the time. It went through various incarnations, but the Gresham House you see today really came to life about seven years ago when Tony Dalwood, our CEO, and Rupert Robinson, our MD of the asset management division, saw what was at the time a very sleepy investment trust with less than £20 million of assets. They saw it as a platform to create a specialized alternative asset manager. Right from the start, they believed sustainability was a key plank of their strategy. One of the first businesses they bought into was the forestry business. Now, we've built the UK's largest forestry business and are among the top five or six largest forestry businesses in the world, with north of £3 billion of AUM just on our forestry side.
Sustainability has been at the core of Gresham House. Through a series of acquisitions and organic growth, Gresham now has north of £6.5 billion of capital spread across a number of strategies, particularly on the real asset side, focusing on the sustainability thematic. We've talked about forestry. My fund helped seed the Energy Storage Fund PLC, or GRID, listed on the London Stock Exchange. It's now Europe's largest battery storage platform, with north of 400 megawatts of battery capacity valued at around £750 million from an enterprise value perspective.
Beyond that, we've got affordable and social housing, which is a big part of our strategy, with a number of listed and unlisted funds tackling this area. We also have a large pool of solar and wind assets. My division focuses on sustainability at its core. The business has really grown up, and I wouldn't have joined Gresham if I didn't feel that they were as aligned with sustainability as I am. The authenticity of what Gresham does, making sustainability genuinely part of everything we do, empowers us to tackle these big social and environmental issues.
Peter Backman: Yeah, look, thank you for that. I'm pleased to say that we achieved the first close in August last year. The goal of our fundraising last year was to focus solely on our existing LPs because, for the first close, we had to rely on a few of our LPs who couldn't invest as much as they had hoped. The first close was very much focused on our existing LPs, and we managed to get over the line in time because one of our five businesses needed access to capital a bit faster.
I'm pleased to say that since then, we reached a further close at the end of last year, so we're now at £150 million of capital. The goal this year is to open up the fundraising to a wider group of potential LPs, and we're targeting a £500 million close over the next 12 months.
In terms of the fund's strategy, we are unashamedly an impact fund, aiming to have a direct impact on big environmental and societal challenges. We define sustainable infrastructure as profitable, real asset-based solutions to these key environmental and societal challenges. That's how we think of ourselves, and we are trying to reflect the fact that technology can only do so much. We fundamentally need new products and services, and many of those can't be delivered without some sort of new physical infrastructure. That's where we come in.
We're looking to invest in new, innovative, real asset-based solutions to those problems and create great financial returns. We believe these huge challenges present potentially huge opportunities. We've distilled these challenges into six areas, targeting sub-sectors where innovative, real asset-based solutions can have the biggest potential impact and create the biggest financial rewards.
Diving quickly into those six areas:
Those things are like resource efficiency and fundamentally, we believe that the use of our finite resources has got to change. Farming, as an example, is one that really uses way too much land, water, and chemicals. And to that end, we've got a brilliant business called Fisher Farms, which is doing what we think is fundamentally transformative in how we are ultimately going to grow our food. As an example, there, we can grow in four acres what would otherwise take between 1000 to 2000 acres to grow in the field. That means we use less than 1% of the land for food growth, which we think is pretty cool. And then we use 98% less water; we use no chemicals and pesticides. Food security is obviously drastically improved because of the fact that we're producing in the country. And then the other really great benefit of vertical farming is that in the way that we grow and harvest, we get typically a 14-day plus shelf life extension, which is brilliant for you. Because, Rosie, I'm sure you've had that disappointing salad bag that goes off after a couple of days.
Rosie:
You've been in my fridge, haven't you?
Peter:
Yeah, yeah, unfortunately, it's been in my fridge too. But you know what, that's also amazing for the retailers. So for them, food waste is a massive issue. And for them to be able to really take that off the table and fundamentally change the way in which their food lasts is really great for them. So we think there'll be a huge uptake from the supermarkets on that because we can grow produce at the same price as fully grown crops. But yet we have all these amazing benefits. And that's, to me, a great example of how the impacts that we're creating can actually also then give us this quasi-monopolistic position in the market and therefore a lot of cash flow certainty and create that infrastructure-light position in the market. That's resource efficiency.
The next area that we tackle is decarbonization. So that's probably the most obvious of our sectors. And that's really around helping facilitate the energy transition. The next area that we focus on is what we call digital inclusion. So that's essentially gigabit broadband connectivity, trying to give people good internet. But as we've seen through COVID, and the fact that we're doing this video call and the like, good broadband really is at the heart of everything in terms of remote working, remote learning, remote health. Even some advanced farming techniques need and rely on good broadband. So we think that digital inclusion is very much at the heart of everything we do.
The next area that we're focusing on is waste. And actually, we see that there's a huge potential to turn waste into something valuable. A good example of that is our business. We've got one site up in Middlesbrough with a business called Waste Not where actually what we do is we convert about 300,000 tonnes of non-organic commercial industrial waste and turn it into pellets that could be used to replace coal in the cement and steel industries. And you might not think that has that much impact, but actually, a single plant up there could potentially create up to about 668,000 tons of CO2 savings every year. That's like taking about 300,000 cars off the road from one plant. And that's just the tip of the iceberg in terms of impact. And you know, we're seeing huge demand from the auto manufacturers, the cement makers because their customers are saying they need low carbon solutions. And today, there hasn't really been a tangible way to do that. So I think that's another great example where our strategy is really bringing practical solutions to these challenges and creating real impact.
The final two areas of the six that we target are perhaps a little bit different from other strategies. So one is around health and education. And we genuinely believe that there is scope to tackle better provision of, for example, early dementia care in the UK, which isn't very well catered for. And we typically only provide quite palliative care in terms of dementia. And similarly with autism. Again, that doesn't tend to happen until school age, and we're seeing some opportunities around autism care in early years learning settings. And then similarly, we're also quite interested in the nursery sector. And we're currently looking at opportunities around transforming early education. So again, we think that can be quite impactful, addressing some of those other harder-to-reach sustainable development goals in terms of health and education. And they really have a big impact on mental health, which, as you're aware, has some huge costs and impacts on our lives.
The final area that we target is what we call regeneration or essentially nature-based solutions. And I'm not sure, Rosie, if you saw the research done by these Oxford scientists a couple of years ago. But basically, they said that if we use nature-based solutions globally, it could potentially have a carbon benefit of about 10 gigatons per year in terms of carbon savings, which is like mind-bending levels of carbon removal. In fact, that's the emissions of the US, the whole of the EU, and Japan combined, about 10 gigatons. So we have to find new ways to harness that. And to that end, we've essentially created what we think is a whole new investment class building large-scale habitat banks, where we can then create biodiversity credits, which can be used by developers to meet their obligations under the new environment. So that's hopefully a very quick snapshot of some of the things that we're targeting within my area in our fund. And hopefully, some pretty interesting and impactful things. A key thing I probably should also mention is that in all of these, we actually think that the impact drives great financial returns. And I think that's probably the other thing I just want everyone to come away with. In the past, impact probably meant having to sacrifice financial returns. But we think it's actually the opposite these days. It's the impact that drives great financial returns. And if anything, this impact will, I think, ultimately create much more valuable long-term assets. And we do think that there's a risk for things that aren't sustainable, that they'll face additional taxation, become stranded assets, or at worst, both. So yeah, either way you look at it, I think sustainability is really the biggest value driver that we can push into gas.
Rosie:
As well as the direct benefits of investing in sustainable infrastructure, like the vertical farming, sustainable investing tends to also have secondary benefits for the world. Could you outline some of the secondary benefits that you expect to see from investing sustainably?
Peter:
Look, I think there are huge, different levels of secondary benefits. And I think there's obviously the ones that I've kind of touched on earlier that are quite direct and obvious, but let me just, I guess, start to sort of wander through some of the other secondary ones, which I think are really cool. Probably the first place I'll start is around a vertical farming business. And, for example, we had this great visit from the people from the John Innes Centre at our farm up in Norfolk a couple of weeks ago, and they started to talk about some of the things that they're really interested in with vertical farming. Examples of things they talked about, yeah, a huge focus on the ability to create amazing crop improvement. So our ability to create and mimic extreme weather conditions they thought was huge in terms of what they could do, and improving crop resilience and future crop developments. Then another really interesting one was that actually, the UK has created an environment where genome editing is possible. And actually, they see what vertical farming could do is to enable the facility to really go out and do proper gene discovery. And they talked about this natural phenomenon called nutrigenomics, which is what happens in the wild to actually create these great new genes which creates resilience, and they're the sorts of things that are really, I guess, driven by what vertical farming could do. Then other ones that I'd never even possibly thought about. They're really talking about what it could do for plant-based medicines and durability. To actually iterate plants to potentially implant within the certain things, and they're actually talking about putting the mRNA vaccine within plants, and then potentially putting in other benefits and other vitamins and essentially creating food as healthcare, which again, I've not really thought about, and they then started to develop out into where food as healthcare could potentially help to start to address some of the diabetes issues that we have in and get diabetes in this country cost about 17 billion pounds per year in terms of impact. So if we could do that through our plants, that that obviously could be pretty amazing. They even talked about pharmaceuticals and how this could create Agilent, which are things that help create reactions within these pharmaceutical elements. And, and then the final one probably is a bit more obvious around medicine, really a sick care, and they think the plants that could be cultivated through vertical farms. And the ability and speed with which that could be done is quite impactful. So I think that gives you a bit of an example of some of the things that vertical farming could do in terms of their, I suppose, the health environment, which then we think have huge benefits in terms of the overall pharmaceutical sector. It also has life sciences impact and the ability for some of the life sciences business to really develop and go quickly. Just by some sticking on vertical farming, the others the other one, I talked about the water, benefits of vertical farming, but it is probably just worth mentioning that water is still a very freshwater that is still an extremely scarce resource. And when you look at places like China, they've got 20 odd percent of the world's population and around 7% of the world's water. So yeah, there's got to be things that, you know, this, that the water benefits will ultimately come to fruition. And I think there have been wars fought over water in the past. And I do think that that's another future area of conflict. So we think vertical farming can help the healthcare sector, our own health, but then also, hopefully, avert some future wars over water. Looking at some other secondary benefits, we talked quite a lot about Habitat bank businesses. And we do think that siting and creating these large habitat banks out into places where local planners want them will also then have a secondary benefit in terms of the housing stock that gets built nearby. And we think that is going to really help the amenity of those homes that are built, having woodland meadows, grassy meadows, wetlands, and the light, I think is a lovely place to be located nearby. And we think that long term that will have a really big benefit in terms of the overall town planning opportunities across the country. And then probably the final one that I thought of in terms of secondary benefits, where we're currently looking at a really cool nursery business. So early years. So kids from basically from infants through to toddlers. And what we've seen there is a business that actually is really focused on the curriculum that they provide the children and really trying to create children that are adjusted to the worldview and really have a good understanding of the need to be more sustainable. The need to use solar, the need to put their waste into recycling. And it's some of those things as well that we think that by investing in those sort of businesses that really create change, that will ultimately have a longer-term trickle-down effect in terms of the overall quality of education and the type of people that we're bringing forward into our society. Hopefully, that's given you a bit of a sense of some wide-ranging secondary benefits that come out of the sorts of things that we do within our primary investments in this sustainable infrastructure field.
Rosie:
It's absolutely fascinating. And it's really good to get that breakdown from you about the it's not just about sustainable investing, it's about these secondary benefits. I'm absolutely fascinated to learn more about that I hadn't really thought about it in that way before. So a lot of these secondary benefits seem to tie into the idea of ensuring that as well as investing in sustainability, we also want to level up and ensure adjust to transition. So Peter, can you talk me through some of the key issues that our listeners should be aware of when financing that transition?
Peter:
Look, I think the just transition is all about really trying to help people that are coming out of the industries that need to change and probably particularly around the fossil fuel industry in need to find new careers. The just transition is about trying to create new industries that have a long-term future. And I think two good examples of that within what we're doing are our businesses in the digital inclusion space. As an example there, we've got three businesses, all of which now have direct training academies. One of them, Telkom, has this brilliant platform called recode, where we're taking, it's basically a bootcamp. It's like a 12-week course where we take people from almost every other industry and give them a whole new career as a fiber engineer. As an example, we did an intake, finished last year where we had two ex-prison officers, we had a range of people from quite diverse backgrounds, but actually, they've now become fiber engineers. And we think that's a great example of genuinely trying to give people new careers that will have a future. Like we're building millions of kilometers of fiber in this country, there's going to be huge demand for highly skilled trained engineers in that sector. And so I think that's a great example of helping people on this just transition. The other great example is around our vertical farming business where, again, we're actively training up now vertical farming technicians to help us manage our physical vertical farms. And I think that's a sector that has huge potential. Like in the UK, for example, we think there could be four to 500 plus vertical farms, just trying to deal with some of the projects that we import in this country. Potentially, there's that there's a market for thousands of those vertical farms, just in the UK, and therefore there's the potential for thousands and thousands of new jobs in that space. Just to give you some facts across our portfolio, over the last 12 months within our basic strategies, we've now employed about 500 new people, most of which are genuinely new careers in things, as I said, like around fiber and vertical farming, soon to be things like our pellet, waste businesses. These are typically also assets that are located outside of the southeast. And that's the other thing that I think our strategy lends itself quite well to, is that because we typically target the sub-50 million pound assets, we are doing assets outside of London, and some of those more typically invested areas, which again, also, I think, helps with this leveling up agenda. Because I think the pitfalls, I'd say that we need to, I suppose watch out for in terms of leveling up and the just transition is that we just invest in places or things because it's located in the right place, or it might create a few more jobs at one particular time. Like everything, I think the key thing that we've got to think about is that if something isn't profitable isn't it isn't sustainable in of itself. So, you know, we really have to be careful about where we allocate our money and ensure that ultimately, these investments in this leveling up agenda and the just transition now are targeted into areas that the strategy dictated where those assets were, the strategy dictated the types of jobs created. And hopefully that then fits in with where we want those to be. But I think that's probably the key thing that we need to bear in mind is, you know, these things have really got to be long-term sustainable, otherwise, you create a false hope you might have jobs for a few years, but then the businesses don't last. And then that's not great for anyone.
Yeah, the opposite of sustainability, in fact. So if we looked at another important theme within sustainability, and implementing new asset classes for biodiversity, and biodiversity net gain, habitat banks is something that you've spoken about previously. So can you, for listeners who may not be as familiar with biodiversity risks and opportunities? Can you explain what it means? And a bit more about nature-based solutions that you mentioned earlier?
Yeah. So look, I think I've outlined a little bit around the science of it. So biodiversity is something that has a huge potential impact in terms of ecosystem health and nature. Just to give you some other stats that your listeners might be interested in. In the UK, for example, in the last 10 years, we've lost over 40 million birds. We're losing plant and animal life at a rate not seen since mass extinction. So we fundamentally have to change the way in which we look at nature. And actually, I think the descriptor report that came out last year was probably the first really seminal report that put a value on nature. And that's probably the first time people have kind of looked at it that way. And I think we do need to now start recognizing nature as a valuable public good. So with that, I guess in mind, what we're thinking about with biodiversity is that there's suddenly this new law that's come in through the Environment Act and actually just coming back to the COP thing as one of the good things that probably prompted was the environment had to come out around the time that it was on. And within that, there is a requirement for all new planning permissions in this country to include a biodiversity uplift or a net gain on the site baseline of at least 10%. So what that means is that for a lot of sites that would be having a plant woodland meadows and grassland peatlands, and various other things to try to enhance the site's biodiversity post-development by at least 10%. And some local authorities are wanting 20 25% biodiversity uplift. But the problem with that is that depending on where your site is, that might mean over half of your site needs to be turned over to some sort of biodiversity scheme, which, as a property developer, that doesn't necessarily always stack up. So what we've done is try to create these large 25 to 60 hectare habitat banks within the local planning authority that the development would otherwise have been. But these really large habitat banks, which create the biodiversity credits, which we then sell back to the developers to help them discharge their environment obligations. And what we're doing is really taking the least productive land, essentially non-arable land, and turning that into something great. And on the habitat banks, we're finding right now we're working really closely with the local planning authority to ensure that we put those habitat banks in the areas that they want, and therefore they can then as part of their town planning, start to ensure that future developments are sited next to or adjacent to that habitat bank, which will also increase the I suppose the public utility and public good of those habitat banks. But overall, with these large habitat banks, we think there's a huge accelerator, a multiplied benefit in terms of plant life, bird life, general nature rehabilitation, which we think, I think, yeah, it's a pretty cool new asset class, but also genuinely impactful, and something that we've created from scratch with the environment bank, and that the founder there, this chap called Professor David Hill, who really is the grandfather of this whole concept of biodiversity net gain.
Rosie:
That's really fascinating. And the way that you're explaining it, you know, for people who aren't so familiar with this kind of thing, you can see what the benefit will be. So when you're setting up sustainable focus funds, how do you manage investor expectations in terms of the positive impacts that their investments will make, but also, as you were saying earlier, the monetary returns that the fund will make?
Peter:
Well, I think in terms of managing expectations, we are very clear. And in each of the things that we try to invest in, we are really working backwards from the challenges that we're trying to fix. So in terms of the resource efficiency, one, we're trying to find ways to use less land, use less water, and use fewer chemicals and pesticides. And within that, we've been able to do full carbon lifecycle analysis to show what benefits that we can generate. And therefore we think that's relatively easy to quantify, and something that we can continue to show back and demonstrate to our investors. In terms of some of the more qualitative things, that's an area that we are continuing to work on. So for example, we talk about digital inclusion in the fiber businesses. We're actively working now to try to find ways to better capture the benefits that we're creating. And that's one that I think all investors understand that that's still a very nascent area and requires further work. But yeah, I think everyone appreciates that it has benefits. But we're now trying to find ways to specifically quantify it. But really, across every single asset that we have, we've got defined environmental and societal KPIs that we try to achieve. And then, you know, we report at least annually back to our investors around how we're going on those. And also from our perspective, that's how we hold ourselves to account. Yeah, we are. We very much think about ourselves as being a fund that creates genuine impact. And so for us that ability to measure and monitor those impacts is hugely important to us. And that's pretty much what gets me out of bed every day is to know that we're actually doing something better.
Rosie:
Earlier on, we talked about that Gresham's chosen Guernsey as the jurisdiction for one of its funds. Can you tell me a bit about why you decided to launch the second sustainable fund in the island?
Peter:
Yeah, look, for us. Guernsey was obviously where we chose to raise our first fund, and really for us, Guernsey is a place that we feel is very special. In terms of the sorts of things that we're trying to do, they understand the importance of sustainability. They really appreciate the sorts of strategies that we're trying to create. So we've always found them to be a great jurisdiction, good to work with, they make the time. You know, there's not, I guess, in other jurisdictions, it can take a long time to go through the process, but certainly from us and the interactions we've had within Guernsey and certainly Carrie Olson has made it very easy to work within the Guernsey environment, but we found it to be a very supportive environment that moves at the pace that we want. Yeah, I'd say, from what they've gathered from what we've done with Gresham in terms of its growth, we are, we're very much out there on a mission, you know, we're trying to do things at a pace because certainly, in terms of my strategy, you know, we don't have a second to waste. And, yeah, we do really feel like going to get and yeah, we've always found that to be good to work with so yeah, very big fan of Guernsey.
Rosie:
That's fantastic to hear are delighted. And I you know, I agree with you, there isn't a second to waste. I'm so pleased to hear that you feel Guernseys, you know, up to speed with that. So, you know, as you know, Guernsey we consider ourselves to be a leading center of green and sustainable finance. And we're an integral member of the United Nations financial centres for sustainability and other supranational institutions. Peter, what do you think could be a next step for Guernsey in its own sustainability journey?
Peter:
I think what it could do is to start doing more of, I suppose, some of the things that even we're doing on the island. I think it'd be brilliant if the Guernsey government supported the building of a few vertical farms, a few facilities to essentially deal with your waste on the island. I'm aware that you're looking at some proposals to do some renewables on the island as well. So I think that's, for me, I always think about you've got to walk the walk, not just talk the talk. And I think that's certainly an area that I think every country, to be fair, could do more of, and I think that'd be a great opportunity to become really self-sufficient, and become carbon-neutral or potentially even carbon-positive in terms of your impact in the way that you do everything on the island.
Absolutely. Now, we are almost out of time. So I've just got one final question. And I'd really like to thank you for such a fascinating discussion today. Peter, you sound very positive, how do you remain so positive about the future, given the sheer scale of the challenges that need to be addressed?
There's a lot of things that we can do individually. I think one of the most impactful ones is eating a little bit less red meat. There's a great study by a scientist called Marco Springmann, and some of his colleagues that looked at the benefits of reducing or actually changing to a minute Mediterranean diet. And he thought it could be something upwards of $31 trillion per year in terms of benefits. 30 trillion of that is largely from healthcare benefits from moving away from red meats. And then there's another trillion per annum related to environmental benefits. So I guess that's one easy one. So eating a bit less red meat. I've also been doing intermittent fasting for about 10 years now. And that really, I think, has big benefits in terms of healthcare. Yeah, there are some great studies around intermittent fasting protocols being used in mice that had cancer cells. And within a couple of months, those mice that had cancer, those cancer cells have been completely eradicated. So yeah, that's something that I think that we can do individually. I also think there's things that we can do around our clothing. So secondhand clothes, try to do that as much as possible, or when you're going out to an event, rent clothes. Yeah, there's a great business that I'm involved in called By Wardrobe HQ. And they're all about fashion rental. And I got involved in that business because actually, they told me about this little dirty secret in the fashion industry that I had not heard about, which is essentially, end of Season, clothing tends to actually get either burnt or landfilled because the high-end brands don't want that to ever come back out into the secondary market. So fashion rental is quite a simple one, I think that we can all use to try to help. Fast fashion is unfortunately very, very impactful. And I think even down to a T-shirt can potentially take up to 30,000 liters of water if it's been flood-farmed cotton. So we need to look at the clothing that we wear and try to use and use secondhand where we can. Personally, I've also just bought my first electric vehicle. So that at least makes me feel a little bit less guilty about using the vehicle in town. And I think that's something we can use. And then I use public transport wherever possible. So there's simple bits. One of the things that I've done that I think is really interesting personally, but also can be quite impactful, is I've personally invested a lot of time and money. I've personally backed about 20-odd early-stage sustainability companies, many of which are doing the sorts of things like my wardrobe I mentioned before, Bow Collective that does some great sustainable products to another business AI drivers does port automation, which has a big impact on CO2 emissions. So it's trying to find these early stage businesses that can really have an impact. And in often cases, everyone can at least offer time, if not money into helping those businesses. And then the other final one that I've recently done is I planted a Miyawaki forest in my home, which we basically planted about 600 trees in quite a small patch of the garden. And that's something that has huge benefits. So this Japanese botanist, Akira Miyawaki, came up with this in the '70s. And this has grown 10 times faster, it has, I think, 30 or 40 times better impact in terms of carbon capture and 100 times better impact in terms of biodiversity gain compared to typical forests. So it's all of those little things. And I guess generally, personally, I think we've got to take a view around, what can we do? Even that one little small step that's better is better than nothing at all. And I think this overall philosophy that I try to, I guess, talk about more is that often people that perhaps don't do everything perfectly get kind of, there's a bit of a tall poppy syndrome, or people will tear them down for not doing everything perfectly, but actually, no one's perfect, I think we just have to understand that we have to be open-minded, and we just have to try to do something better. And that will allow us to do that small incremental thing better. And then hopefully, over time, we can start to embed more sustainable actions across all of our lives. So hopefully, that's some, I guess, some ideas on personally, Your question about how do I stay positive? Look, I think on that front, I'm really fortunate. So I'm involved personally as a judge and mentor at Cambridge Uni's CISL accelerator program. So that's all about really young, bright things, bringing forward ideas to help some of the big sustainability challenges we face. And I am always amazed at the breadth and depth of the ideas that come forward in accelerators like that. I'm also involved in this thing called the Clean Tech Challenge, which is a university-based clean tech competition. And I've been doing that for a number of years. And we typically see applicants from all around the world. And again, this is the best and brightest, all totally focused on trying to fix these problems. So I think being able to see that is a really big part of how I stay positive. I think also, just starting to see now across my peer group, investors, the people that are out there doing, I guess, is that they're starting to recognize that you can't keep investing in the same things anymore. But that just doesn't, and it's not going to change what we need. And I think I've seen now a bit of a step shift in that investors, investors in my fund, for example, are starting to see that actually, they can make a really positive choice in doing something to invest in things like sustainable infrastructure or other worthy recipients of capital to actually fundamentally make impact happen. Currently, my mission, yeah, the thing that we always talk about is, we're trying to intentionally scale impact glass infrastructure assets that are good for investors, because they are good for people and the planet. And that mission probably wouldn't have been possible before. But I think, yeah, we're just at this point now where we are able to do that. We can do good investments because they're good for people on the planet. And then I guess I'll just leave you with is that like, I genuinely feel like, you know, what I'm doing, what we're doing as a team this year, we're on a course. And I think everything that we're doing, I'm doing now, personally and professionally at Gresham House, it feels like that we might just actually be starting to better make a difference and maybe okay, I think we just now need to get all of your listeners and anyone that will listen that yeah, we've just got to go and start rounding everyone out and getting everyone on this mission. Because I think this is something that can't be done individually. I think collectively we all have the ability to really make change happen and that's hopefully the thing that people come away from having a listen to this that yeah, we've just got to go out there and do it now. I saw a great article where David Attenborough recently said that actually, it's not too late. And I think we're just really at that point where we just have to do something now. But we finally have some glimmers of hope of great things that we can do to really make a difference. So I guess leaving with yeah, let's get everyone involved. And please do help everyone, the great Guernsey podcast and beyond. But thank you very much.
Rosie:
Thank you so much, Peter, for your time and your insights today. It has been an absolutely fascinating discussion I've learned so much. And thanks also to you for listening to today's podcast. Now we've got quite a back catalogue of interviews and panel discussions on the Guernsey green finance podcast channel and you can check them out by searching for Guernsey green finance wherever you get your podcasts. If you enjoyed today's episode, we'd love it if you left a review or comment we always love to get your feedback. You can also find us at guernseygreenfinance.org and weareguernsey.com. You can interact with us on Twitter at gsygreen finance and at weareGuernsey you can hear more relating to news and developments coming out of ganseys finance industry by checking out the we are Guernsey podcasts on your preferred platform. We've also got links to Peter and Gresham House's social media in our show notes to check those out to hear more from them and we'll be back soon with another edition of the Guernsey green finance podcast.