Alexandra Wright-Gladstein is the Founder and CEO of Sphere. Sphere is a public benefit corporation that is amplifying a social movement to get 401(k) retirement savings money out of fossil fuel companies. Sphere has two ‘first of its kind’ products: i) Sphere 500 Fossil Fuel Free Index (SPFFXI) which tracks the S&P500 excluding the fossil fuel companies, and ii) Sphere 500 Fossil Fuel Mutual Fund which tracks SPFFXI.
Prior to Sphere, Alex co-founded Ayar Labs, a tech startup that produces power efficient optical input-output solutions, in 2015. Ayar Labs has raised over $60 million from the likes of Founders Fund, Intel Capital, and Lockheed Martin Ventures. She previously studied Economics and Political Science at Tufts University, worked at Enel X North America, and obtained her MBA from Massachusetts Institute of Technology.
Topics discussed:
Alexandra’s climate journey from working in the energy sector and studying entrepreneurship / technology transfer to founding Ayar Labs and Sphere.
Eureka moment: Alex enduring an arduous three year process to be able to offer her employees, at Ayar Labs, with fossil fuel free 401(k)s.
Brief overview of 401(k) plans. 79% of American employees have access to a 401(k) plan.
Pain point 1: 82% of Americans believe in Climate Change and 70-80% are not happy or aware that their retirement savings are invested in fossil fuel companies.
Pain point 2: 99% of Americans have on average $6000 invested in fossil fuel companies and only 0.1% of 401(k) assets under management is sustainably invested. This is despite 33% of professionally managed AUM using sustainable investing strategies.
Why Fossil Fuel Free Funds instead of ESG Funds?
Main impediments for lack of sustainability integration in 401(k)s (Fear of lawsuits, regulatory roadblocks, pricing premium for ESG products, and preference for Mutual Funds).
Regulatory support from the current presidential administration for ESG integration in 401(k)s.
How Sphere’s Index and Mutual Fund solves these problems?
VC Funding from Pale Blue Dot, Climate Capital, and other Angel Investors.
‘Nuts and Bolts’ partnerships for developing Mutual Funds and ETFs (Distributor, Fund Administrator, and Investment Advisor - Jason Britton at Reflection Asset Management).
Closing question 1: Advice to Tech entrepreneurs who want to engage in (Climate) Finance entrepreneurship.
Closing question 2: Advice to internal corporate sustainability change makers.
Note: This podcast is for informational purposes only and should not be considered as investment advice. The interview took place on 4th January 2022.