This episode features a conversation between Phil Dillard, Founder of Thruline Networks, and Sasja Beslik, Chief Investment Strategy Officer at SDG Impact Japan. With over 20 years of international experience in sustainable finance, Sasja has extensive knowledge of the global investor community and the emerging opportunities and challenges in the transition to a sustainable economy. He currently leads the development of innovative investment, lending, and advisory solutions that align with the UN Sustainable Development Goals and create positive social and environmental impact. His work has been recognized and awarded by various organizations, such as the World Economic Forum, the United Nations, and the Swedish Royal Family. In this episode, Sasja talks about his tool kit for driving real change in a modern world, the importance of continuing to inspire the next generation of environmental activists, and how anyone can use the financial system in order to shift its focus for the better.
This episode features a conversation between Phil Dillard, Founder of Thruline Networks, and Sasja Beslik, Chief Investment Strategy Officer at SDG Impact Japan.
With over 20 years of international experience in sustainable finance, Sasja has extensive knowledge of the global investor community and the emerging opportunities and challenges in the transition to a sustainable economy. He currently leads the development of innovative investment, lending, and advisory solutions that align with the UN Sustainable Development Goals and create positive social and environmental impact. His work has been recognized and awarded by various organizations, such as the World Economic Forum, the United Nations, and the Swedish Royal Family.
In this episode, Sasja talks about his tool kit for driving real change in a modern world, the importance of continuing to inspire the next generation of environmental activists, and how anyone can use the financial system in order to shift its focus for the better.
“I looked at the system that is, at its core, the most global denominator around the world, and that's money. So, you can be from any country in the world, but you can always trade and you can always talk money. And the global economic system and financial industry is a global citizen. The only, I would say, truly global citizen, because you shift the money across the borders all the time. In general, the financial industry has that sort of global touch. So, you can work in New York, Hong Kong, Japan, Frankfurt, or London, it doesn't matter. It's the same language.” - Sasja Beslik
(02:14) About Sasja’s role
(14:48) Creating impact through finance
(20:05) Outsiders influence on environmental situations
(23:47) Living in a world of artificial intelligence
(28:59) Tools for driving change
(35:58) Directing the next generation
(41:02) Inspiring people to listen and make active change
(44:08) Quick hit questions
Phil Dillard: Hello and welcome to Thruline to the 4th Sector, where we're exploring fourth sector capitalism and impact investing as an invitation to innovation and changing the world.
This episode features a conversation between Phil Dillard, founder of Thruline Networks, and Sasja Beslik, Chief Investment Strategy Officer at SDG Impact Japan.
With over 20 years of international experience in sustainable finance, Sasja has extensive knowledge of the global investor community and the emerging opportunities and challenges in the transition to a sustainable economy. He currently leads the development of innovative investment lending and advisory solutions that align with UN Sustainable Development Goals and create positive social and environmental impact. His work has been recognized and awarded by various organizations, such as the World Economic Forum, the United Nations, and the Swedish Royal Family.
In this episode, Sasja talks about his toolkit for driving real change in a modern world, the importance of continuing to inspire the next generation of environmental activists, and how anyone can use the financial system in order to shift its focus for the better.
Now please enjoy this interview between Phil Dillard and Sasja Beslik.
Hello, everyone. And welcome to another episode of Thruline to the 4th Sector. I'm your host, Phil Dillard, and today we have a special treat to have with us, Sasja Beslik, the Chief Investment Strategy Officer at SDG Impact Japan. Sasja, great to have you with us. How are you doing today?
[00:01:33] Sasja Beslik: Thank you, Phil. Thanks for the invite. Thank you for having me. It feels good. I'm very happy to be on the show today.
[00:01:40] Phil Dillard: Yeah, very happy to have you. I'd have to say I'm an avid reader of your column and see a lot of the things that happen on LinkedIn and learn a lot from you on a regular basis and share you with lots of people. So I think it's really, really a great opportunity to take Some of the messaging you do and put a little picture on the person behind it and your experience, your journey, and how we can inspire others to grab the bull by the horns in the way that you have.
[00:02:07] Sasja Beslik: Thankyou. Thank you. That's what we need. That's exactly what we need to do. Yes.
[00:02:11] Phil Dillard: Super. Let me start with what I call my super softball question, right? When people ask you, What do you do? How do you describe what you do?
[00:02:20] Sasja Beslik: I describe it by saying that I'm trying to use the financial industry as a toolbox to make a tangible change, transition towards a bit more sustainable future. So in this particular context, I'm using investments as a tool for that.
[00:02:33] Phil Dillard: For people who understand that, I guess the most. Obvious challenges and the most pushbacks people say is, how does that tie to the investment industry? Or isn't it structurally problematic or not aligned with this? How do you answer this question?
I mean,
[00:02:49] Sasja Beslik: look, I think financial industry is a mirror of the sort of a real economy to certain extent. And you have the theories that I use in a financial economy where the externalities are externalities like, uh, you know, pure water or air or, you know, environmental sort of a biodiversity and all of these things basically not accounted for is something that belongs to, you know, the world a hundred years ago.
Uh, we have a completely different intersection between the society and the real economy today and the, you know, nature as such. So it means that externalities are and need to be priced and need to be accounted for. When I get this kind of a question, it's sort of a, uh, epiphany in many cases that when you describe.
For people that they actually paying for the cost of these externalities as the taxpayers and the companies that causing these externalities are getting away with it, then they sort of start thinking, well, this is something that I haven't heard about before. So you need to sort of a bit understand how the structure works.
To understand also that some of the things that we, on the stock market and a fund market around the world, we are getting a lot of gains and we're doing investments and all of these things. But it's on the back of the fact that many externalities, most of the externalities caused by the businesses that we're investing in are not accounted for.
Yeah,
[00:04:04] Phil Dillard: absolutely. And the big challenge is to how do you measure them? Because it's really hard to put them into some of the, some of the costs based on the way that we've done it in the past. I'm a University of Chicago trained finance MBA. And I often quoted that Milton Friedman, Lines that people are talking about, but go an extra part into the paragraph of his article on Capitalism and Freedom, where he talks about the importance of regulation to actually set the rules of the game.
And we don't have anything that's kind of doing that right
[00:04:32] Sasja Beslik: now. I think people usually, when they quote Friedman in this context, business of business, this business, they're actually forgetting what you are actually mentioning now, that he was a proponent of increased, or I would say not rigid, but more controlled type of regulation, which will address some of these things.
But unfortunately, that regulation is in many. Places around the world, not in place. And that's also one of the reasons why this kind of investment and sort of an ESG sustainable type of investments, if they are done in a good way, they actually can address some of these externalities. Of course, it depends how you do it.
So there is this pushback in the US on ESG, it's coming over to Europe, in the UK, I can clearly see that, but in general, I think it's almost like a. Purging sort of a time where many of the asset managers that took on ESG as a marketing gimmick will abandon it because they are going to get afraid of it.
But the real ones, the ones that really believe that they can do something about it, they will most likely continue
[00:05:26] Phil Dillard: doing it. Yes, it's a long sort of tale to try and unravel how we can actually get people to appreciate. Um, internalize and address some of these issues in a systematic way, and we'll definitely get to there to get your opinion on how we can motivate people to do that, how we can empower those who are on the side of Looking at the data and looking at the systems challenges.
But before that, we really, really want a chance to get to know you. So, if you would go back and just talk a little bit about how did you get here? How did you first get involved with ESG or Impact? What were the most important roles and decisions along the way that got you to where you are today?
[00:06:08] Sasja Beslik: I mean, look, my journey towards, I would say, some kind of a perception of how the system, different system works, started when I experienced the war in former Yugoslavia.
I was a refugee that managed to escape a war in Bosnia. And I ended up after three months of sleeping in the parks and the bus benches in Croatia, I managed to get Myself to Poland, where I took one of the first boats in the harbor because that journey was very long and I was unsure if I'm gonna be able to find any country to go to.
And after the sort of, uh, three or four days on the road between the Croatian, Poland, I ended up on a boat to Sweden. Uh, and that was by accident. It was not decided. That was the money that I had. I had only 110 Deutsche Marks left. So that was what I could buy a ticket for. So I went. Came to Sweden and I spent the time in the refugee camp and then I went, I learned Swedish and, you know, did university and got my degree and start working.
But I started working in a very sort of a special way. I first couple of years I spent as a war correspondent. So I went to, you know, Israel, to Kosovo, to some other places to report. And then for me, it was almost like the way of sort of working with my own experiences from the war, which is good. But then eventually I got a job offer to work for a consultancy that was serving oil and gas industry on environmental and social side in different countries around the world.
So I went to work to Congo, to Nigeria, to Angola, to former Soviet Union countries like Georgia, Azerbaijan, Armenia. And during these sort of three to four years in these different projects that I did around the world, I realized very quickly that The World Bank and
IMF and all the other organizations that were involved like, uh, in financing of these projects, they were very keen in many cases to, uh, fulfill or account for environmental and social sort of guidelines. And I remember I was on a sort of a receiving side as a consultant working with the BP and Shell and big oil companies.
I remember how influential financial players were. And how much you have to sort of, as a company, adhere to, uh, the principles and the expectations that these big, uh, oil and gas companies had. And at that time I started realizing that financial industry and financial sector was really, uh, the sort of a, could be a driving force in this.
If, you know, You sort of a shift capital flows a bit more. So eventually I was offered a job in Stockholm to work for a local, uh, Swedish based asset management firm as a head of, at that time, ethical analysis. That was sort of a time of these sort of ethical, you know, socially responsible investments.
And then that firm was acquired by ABN Ambro and I was very quickly transferred to work for ABN Ambro in Amsterdam. And I worked basically from 2004 until now, I have been working only in the financial industry. One of the things that I've sort of learned, and this is the experiences that I had from the field from different countries, is that If you really want to understand what your investments do, you have to visit the companies and visit people affected on the ground.
So I've done like a zillion field visits around the world, uh, in the places that you would not even think that investors would go. I mean, I've been to DRC six times, I've been to all the workshops in Asia, all the countries, uh, I've been to, uh, workshops in Ethiopia, I've been to South America, North America, North Dakota with the pipeline and all these things.
And This approach of not buying the house that you see on the internet, you know, which in most investors usually do, I sort of developed my own approach, which has served me well as an investor because I could always understand what is really happening on the ground much better than the ESG ratings, as these ratings are a bit questionable, would provide me with.
So that's a bit of a short sort of a compromise story of who I am, where I come from.
[00:10:00] Phil Dillard: Well, there's so much to dig into there. The early days of trauma. The oil and gas, uh, going out and seeing all these investments, was there a turning point for you when you, I mean, you described seeing that financial services was a thing, but is there a story that sticks out in your mind?
There's some place where you saw something like, I remember we were talking with this person who was flying to Texas and he was talking about methane and stranded gas and he looked down at the oil fields and saw them all lit up from the planes with all these fires, for example, or another person who said he was flying over a virgin rainforest and then saw all this big chunks of land that were torn up for palm oil plantation and it just stuck in their brains and saying something is wrong here.
Was there a something is wrong here moment for you? It was, and it was in
[00:10:52] Sasja Beslik: Zambia, in northern Zambia, I, uh, was participating in a project that was funded by a World Bank, where Zambia was forced to privatize all its mines, you know, because of the debt. They had, uh, the state debt that needs to be paid, and they let go about 300, 000 people.
And in Zambia, if you, in Africa, if you do 300, 000 people, you multiply that number with four or five, because that's how many people are dependent on one person working. And when I saw the, you know, the destruction of this, I mean, in local societies, I'm sort of more driven, not really, I mean, climate, yes, of course, because it's a visual, I've seen it all in Greenland and the North America and South America and all of that, but I'm more driven by the fact that the people, the individuals and groups of people are so heavily affected by it.
And I also realized at that point, I actually, I was thinking almost every day, I spent like 8 months in northern Zambia, close to the Congo border, that was, something is really wrong, something is not, this is not the way how it should be done, because it's creating a residual impact over time, that it cannot be sort of a solved in the way we think, you know, could be solved by establishing a new employment services or something like that, because there are no jobs.
You know, there is nothing else to do. So it's a social angle of the story that is more sort of a driving me than I would say, pure climate sort of an angle to that.
[00:12:13] Phil Dillard: I mean, that hits home because, um, wow. So as you probably know, I was, I'm a former Naval officer and I know, um, a lot of people who were, you know, in the war in Yugoslavia trying to help people like you, and when we were deployed.
different parts of the world. We saw those sorts of challenges in different parts of Asia, in the Arabian Gulf, off the coast of Africa, people see a movie like Captain Psilips and they think it's interesting. I was there and saw the people on the beaches who had nothing else to do. Who, the only way that they could thrive is to find something.
And when the environment. is damaged and the fisheries are damaged. So there's no industry that is the industry, you know, Somalia, the industry was war, right? And we're in different parts of it. So it's really troubling when you see it for things that you expect that at a macro financial level, they seem to make sense.
But when you get down to the impacts on the ground that other folks don't see it, it's, it's jarring. That's really
[00:13:11] Sasja Beslik: jarring. It is. And when you see, you know, how helpless some of these people are, and also see the, so I did one other thing when I was in Africa, actually, I took a trip, if you think from Moroccan side, or if you look at the map, all the way to Egypt, and I jumped over Algeria because it was too dangerous at the time, and Libya, uh, but I visited all the Tunisia and Egypt and Morocco and so on.
What I realized at the time. And this is many years back in time. It's like when I spoke to the farmers, they were actually telling me that about 50 to 60 percent of the land they were sort of, you know, harvesting or trying to harvest in one way or another was not actually able to provide anything because of the climate change.
And I was thinking at that time, you think, okay, but where these people are going to take, where are they going to go? They can't go South because you have a Sahara desert. So they're going to go North. So that's exactly what European Union is experiencing right now. You have the huge movements of population.
That is now controlled by certain regimes in Northern Africa. There's a sort of a, almost like a security arrangement between Europe and some of the countries in Africa. But eventually, you know, it's going to explode because the climate change is shifting a lot of things. So you will see a lot of human sort of, uh, you know, movements, uh, in this particular area for the next 10 years, I think.
[00:14:28] Phil Dillard: Yes, the numbers are staggering and accelerating to getting worse. So, uh, and when you saw them, When you saw the problem and you realized that you needed to do something, you chose, you know, focusing on financial, the financial side. Can you share why you thought, why not government, or nonprofit, or corporate, or even being an entrepreneur?
Why do you think the financial services route gives you the most opportunities driving that?
[00:14:55] Sasja Beslik: I'll be very honest with you. I looked at the system that is the most global system in the world where race, color, religion has no, I mean, money doesn't stink. You understand what I mean? So it's like, I looked at the system that is in its core, the most global sort of a denominator around the world, and that's money.
So, you know, you can talk with, you know, you can come from any country in the world, but you can always trade and you can always talk money. And the global, sort of a global economic system and a financial industry is a global citizen. The only, I would say, truly global citizen, because you shift the money across the borders all the time.
I didn't choose the government because it was too nationalistic. It's sort of a national state, sovereign state, very sort of a limited NGOs, not really because I've experienced NGOs on the receiving side. In Bosnia during the war, and I saw also good sides of the NGOs, but I saw also the bad sides of the NGOs.
So I sort of have, I formed my opinion about that at that time. It has been changed over the years because my memories sort of, uh, become a bit distanced. But in general, I think it's, it's, uh, financial industry has that sort of a global touch. So you can work in New York and Hong Kong and Japan and, you know, Hamburg, Frankfurt or London.
It doesn't matter. It's the same
[00:16:10] Phil Dillard: language. That makes a ton of sense and once you start to find an interesting product that works in financial services and people see results Lots of people then say, wait a minute, how do I get that as a, as a part of the result as well? So I see the transition and I see the logic.
Can you share if there are any economists or thinkers or some sort of leader who really influenced you? I mean, we already talked about Milton Friedman and really taking in all of Milton Friedman. Right. Uh, similarly, like I was recently watching some conversations with Ronald Reagan, and if Ronald Reagan were a politician today, he'd be a moderate Democrat to slightly progressive Democrat by the rhetoric today.
It's really interesting when you look at them in their totality, how some of these people can influence. Is there anybody who's influenced you and your thinking in a fundamental way that you'd like to share?
[00:17:06] Sasja Beslik: Not particular one person, but it's some sort of a lot of different people. Piketty is one of them, uh, French, uh, economist, philosopher, whatever he has influenced me, but there is a person that I've almost choose as the antidote to what I'm doing is influence actually a lot of.
Thinking what needs to be addressed. It's a strangely enough, a very prominent figure in the Republican sort of right wing side in the U S called Steve Bannon. I read everything that he said and sort of tried to understand, okay, how are we going to turn this around? So it was. Almost using it, think about it like a sort of a silent antidote or what I want to do, but then trying to understand, okay, what's his interpretation of what's going on and what we really need to do to actually, you know, sort of a fight back on that.
So in that context, in sort of a macro context, and I understood a lot of the things. So just to give an example, I told all my friends, yes, Brexit is going to happen. Yes, Trump is going to win. They were almost laughing at me on the Brexit side. Trump was more 50 50. But the interesting thing is that The way the interpretation and the narrative about where we're going and what the world is about is really entrenched in the financial industry too, because it's reflecting the way how we make investments.
The entire sort of the way how the investments are framed are supporting the narrative that is currently dominating the world. And right now we had a situation where you had a good sort of a push on sustainability transition before the Brexit and Trump and all of that, but then it's certainly sort of a.
Turn down a bit. So you have this pushback on these kinds of investments. Although, if you look at the numbers, like last five years, the EUC type of investments have basically outperformed the mainstream investments. Now that's not the same thing anymore. There is a bit of a deviation, but if you look at an aggregated level, these kinds of investments have outperformed.
For
[00:18:58] Phil Dillard: years, I've bumped into people who have done study after study after study who have shown that companies that think about ESG as a way to execute for the company or companies that think about impact metrics as a way to improve their business and their industry have outperformed on a relative basis of their peers, people refuse To believe it.
So I do want to get into later about how we tackle the psychology of people understanding that pure numbers of the mathematics, and also when you extend them to include the impact measures, how we get there. But before that, I wanted to ask, to play on the who influences you. There are certain archetypes that have To me, outside's influence on the conversation, right?
There's a popular celebrity philanthropist, there's a corporate leader, a popular philanthropist to me who does it well is somebody like Dikembe Mutombo, and a corporate leader who can do something well is somebody like Larry Fink. And then there's a billionaire innovator, maybe like your Jeff Bezos or someone of that ilk, the guy who was, you know, the guy from Patagonia, who have the ability to make a huge, A huge impact.
What do you think of the role of those folks? Are they more part of the problem or more part of the solution? Do they actually have the outsized... ability to move markets that we think that they do, or do they still need pressure from, you know, the masses to actually make some substantive change?
[00:20:24] Sasja Beslik: I think, you know, all of them are after all, not divine.
They are humans. So they are still sort of, uh, you know, reflecting as a human beings. And I think they are still impacted by. By what sort of the pressure that you can sort of, uh, put on these people in various shapes and forms and so on, but also, uh, expectations about what is their role in the legacy they are creating, because many of these people are actually creating a legacy for themselves for years to come.
And many of these business leaders, some of them that you mentioned. Or sort of in that sort of a cohort of legacy shapers, you know, they are shaping their legacy. It's the narrative around this and i'm coming back to that and I think human beings we are used to tell each other stories and to listen to stories and that's why that's very important around the fire You know when we were at the stone age and all of that and it goes on But I think that the problem we have today is there are so many conflicting narratives that people depending on the sort of a What has shaped their sort of ground beliefs, sort of, they get stuck into that and they are very hard to sort of move from that position because there are so many truths around or untruths around.
So you just stop thinking about it and you stop, actually stop acting. You stop acting, you're just sort of a silent passenger on the train, on a moving train, and that's what you don't want to be. You don't want to be a passenger on the train, you want to be somebody that influences the direction of the train.
Yeah,
[00:21:45] Phil Dillard: absolutely. You know, when you were talking about that, you got me thinking about some U. S. conservative Republicans who actually started to shift some of their point of view and shift some of their rhetoric. And I think Steve Bannon is still pretty hard nosed in his, his approach, but I think in seeing how different folks might have changed their, their tune a little bit.
[00:22:05] Sasja Beslik: I'm following that, Phil. I'm following that in the U. S. This is so interesting because some of the criticism against this market liberal externalities free economy system is actually right now coming from the right conservative angle, which surprised me a lot, which is very interesting because usually it will come from progressive side, but it's actually telling you when it comes from that side, it's telling you the existing system is actually not fulfilling its purpose.
So we really need to find a way now to sort of shape the new way of how this could work.
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Absolutely. Absolutely. Um, one of the conversations I heard recently was, um, Democratic representative who is asking why there was pushback on ESG. And she said, if I'm an investor and I choose to explore more in depth about how a company operates, isn't that good investment? Isn't that me expressing economic freedom to determine what matters to me to make an investment into a company and by actually Pushing back on ESG, you're reducing my economic freedom, which is against the fundamentals of what you're supposed to be all about.
I think an outstanding way to frame it, and I go back to the things you talk about, some people would go and buy sight unseen, the house, right? Some people are going to go and look at the house and drive around the neighborhood at night and see how the traffic is at night and see, You know, what's the difference between the day and the night and look at the builder of the home and how they built the home and you know, how many other homes that they built and how do they treat the people that work for them so that they can say, I believe in this building versus that building because both of these buildings built similarly, this one is superior because it aligns with my values and how I would value this at a higher level than the other one.
That's just natural investing. Thank
[00:24:54] Sasja Beslik: And it's also you have the way of living in the world of artificial intelligence and you know, it's like artificial intelligence cannot cook the numbers which come from real economy. They are what they are, you know, they cannot invent the new things. It is what it is.
But how do we change what it is? And that is the sort of a. That task of going in and influencing the shareholder impact that you can create as a shareholder, go to company and actually talk to the CEO, talk to the middle management, go talk to the workers on the floor, really trying to understand how is this done?
You know, are you really doing this in a responsible way or not? Because I tell you in most of my site visits, I've been in prison in India for, for trying to take out the water samples from, from the country, from the pharmaceutical industry and so on. If you really understand how this impacts people, and you bring it back to the CEO and say, look, I spoke to the people on the ground, I actually spoke to your middle management, and they say they have no clue about your climate targets.
It's only financials that matter. Then you really understand, you verify the numbers in a completely different way. Wow.
[00:25:59] Phil Dillard: I can only imagine some of the experiences you had.
[00:26:02] Sasja Beslik: I can tell you a story. India is, it's, look, I worked for the biggest Nordic company. I was group head of sustainable finance, managing 30 billion euros, a balance sheet, you know, asset management side.
I went to India to visit Pharmaceutical. India is the biggest bulk pharma producer in the world. And I went to two states, Hyderabad and Visakhapatnam, which is on the East side of India. And I've been to India before. And we discovered a huge pollution from the industry into the water streams. It was, you couldn't come close to it.
It was smelling like 10 kilometers from there, foam, you know, very, very, very polluted. And then I did a video and I took the water samples. And then I went to the local sort of environmental agency and they told me something that I didn't know is that all the water, uh, treatment plants were powered by a federal Indian electricity grid.
And most of the time these grids were not, uh, in power. So these water treatment plants, where the companies Not knowingly or knowingly, we're channeling water to, we're not treating the residuals. They were just letting them go into the open rivers. And I brought that film back. Uh, and then I was arrested at the Bangalore airport because, I mean, I spent two weeks in the country and they arrested me for the sake of me having a satellite phone, uh, which I had all the time.
But after two, three days in prison, they were releasing me. I got all my stuff back except water samples.
[00:27:24] Phil Dillard: Amazing, right? And what you described reminds me of There was a time when I was in Panama City, Florida, and I don't know if you've been to the Gulf Coast, uh, Panhandle, but it's beautiful. But when the red tides hit, and we know the red hides come from washout for organic materials coming into the bay, feeding certain things, I never had problems with allergies.
I never had problems with breathing or irritation. I couldn't breathe. Within two blocks of the beach, my skin was itching, my lungs were burning, and I was just standing there breathing near the red tide. And for people, the denial factor of, you know, this isn't an established One of the wealthiest countries ever known on the face of the planet then go to India where power is intermittent And then you're not protecting the waters and then what are the impacts and all these different people and then they want to hide it They want to cover it up And if I'm an exec corporate executive where I say our values are that we care about people and we care about the planet But I choose not to go see that I choose not to be on the record of knowing that I don't have Regular power to keep the water treatment plants Complicit In my negligence, in my just not following through on the things that I know that I need to do because I don't know how to get there.
[00:28:39] Sasja Beslik: But Phil, the fun part of this, or the good part of this, is that when I came back home to Sweden, I sent a video link to the film with a password and a letter to the 30 CEOs. And usually as a shareholder, you get an answer within six months or maybe a year. I got an answer within a week from all of them.
Because when they realized what this was, they really wanted to do something. And I got in contact with them, and they actually built the new water treatment plants. Based on this engagement, based on this thing that I did, two years later in India, in a couple of these places, and because of this, the European Union changed the laws of how the pharmaceutical company needs to report water sort of management in the EU.
So what I'm telling you is that as investors, you can make a huge difference. But you cannot do it in the office in New York, in London, or, you know, in Frankfurt, you need to actually get your hands dirty. Sure.
[00:29:30] Phil Dillard: I mean, that was a question I was going to get to about the ability for shareholder and stakeholder activism, because in the EU, the EU is much faster to look at the situation, create a law and push some regulatory.
The U S is much slower. And I think the U S would argue and they say the market should manage itself. You know, but the problem is we know that these markets aren't free, we know they're influenced by a number of different factors, so you have to try that balance between economic freedom and influence in the market, which people are trying to do by ESG, and an actual regulatory, which people also don't want, which forces it.
So I'm curious about, I think you described a couple times in your past roles, and I'm assuming it's similar, How the organization drives change for those who seek to serve, and then like, what are some tools, what are some tools that, that you think are effective in sort of driving that change outside of the
[00:30:23] Sasja Beslik: organization?
I mean, the tools in terms of understanding the context where companies are operating and understanding the reality. Another example I can give you, I went to see the, we'll just give you a bit of a context of that. I went to, uh, Juarez, it just outside, you know, U. S. on the border, Mexican border. El Paso on the other side, Juarez on the other side.
And I went to Juarez because Electrolux, one of the big Swedish companies, having their operations in Juarez because of the tax issues, labor cost issues, and so on. And instead of going to the factory, I went around and I went to the local priest, I went to the local hospital, and I went to the local shops, and I asked So, when does the cash stop coming in to pay for the goods, and when does the credit start?
And then I start calculating exactly how much money these people have. Then I went to the priest and I asked, okay, what kind of things, you cannot tell me because of privacy issues, but what's the most common complaint? I went to the hospital and I asked, okay, except for the shootings, what are women coming in for?
Because most of the workers were women. And I got a completely different picture. What exactly the issue is and what company needs to do. And then we could have a constructive dialogue and they could actually, because they were willing to address this, but they didn't know how they didn't have a skill to do it.
So you have this. Almost like operating, trying to help companies. This is not about telling companies they are wrong. This is about helping them to develop their business so we can actually create a better future together. And this goes back to what you said earlier. It's the ESG is between, if you think it's like regulation and companies.
Regulation is very slow. Companies are very smart. And between the regulation and the companies, we have sort of developed something that is addressing some of the externalities called ESG. And that's the sort of the way how it can be done.
[00:32:05] Phil Dillard: That's great. That's really something. And so is that how you would describe your, I see ESG as a connection between companies and markets.
Companies operating their businesses more effectively. Some people think of it as defensive to like avoid litigation or some people think of it as offensive as ways to improve. When we extend to impact and UN Sustainable Development Goals, how do you describe the difference? Between the impact and the ESG.
[00:32:33] Sasja Beslik: Until now, I think, if you think most of the ESG investments so far in the world have been process oriented. So what you're investing in is it when you're investing in the ESG fund ETF or whatever. In the US it's pretty much ETFs. You have a lot of ETFs in the US on the ESG side. The big ones, Vanguard and Blackhawk and so on.
You're investing in the process. So what you're, as the asset manager, you say is that I'm taking this into account when I evaluate companies. And depending on what sector they are, I will sort of, uh, develop different analysis models to see how really good they are in addressing this. But so far, all of that has been about the conduct of the company.
So how they treat employees, you know, their own emissions and so on. The impact side is if a company in the U. S. or Europe produces a product, what is the cost of that product? From the sort of a, you know, both positive side, but also the negative side. And unfortunately, you know, because of the, as you said it initially, lack of data, internal sort of a pricing models, carbon models, cost of that, and so on.
It's difficult to give exact number what the impact is, but the impact is all about. What does your products and service actually create in the world we live in, positive and negative. So you take a milk package. So what is the positive impact? If the milk package is produced by renewable energy, if it's transported by electrical vehicles, you know, if the workforce is paid in a good way.
So we have that, but also, okay, what is the cost of the milk package? You know, in terms of the negative impact. So you, what you're after is to create some kind of a net understanding where the product is. And that's the future. The net. ESG, SDG impact is probably the next big thing. And it's going to come into the place when the data and information about the cost of externalities has become
[00:34:16] Phil Dillard: better.
And that's a, it's a tricky one, but I think this is where people are experimenting individually and in collap in collectives to try and make those. I just saw a company yesterday that was trying to do a true price and they cited, uh, a European, uh, supermarket. That head was trying to calculate the true price of a handful of products.
They looked at it back, you know, 20, they got down to five and, you know, people are like, well, you only did it for five. Um, but the argument is it's pretty hard to try and figure that out. How less that people can digest. Because I don't think people think about their food chain. They don't think about the cycles, they don't think about the distribution.
They don't think it's not natural to get blueberries in October, right? That they're coming from somewhere else where it's spring. So blueberries half around the world, yes, you get the net impact for you being able to eat blueberries, but there's also the negative impact that they had to be picked early and they had to be put in nitrogen and they had to be flown halfway around the world.
And then the carbon footprint of that is a different benefit That negatively impacts other people that's not included in the total price of the product. And that's a really tough thing.
[00:35:24] Sasja Beslik: This is so good that you're taking this up because there was a recent study that I've actually mentioned this at one of my newsletters about these 100 companies.
They looked at how many of them actually bear the cost of the business. I mean, bear the sort of the biodiversity cost or climate cost. None of them. is actually bearing the cost of what they actually create. And the who bears the difference between that is us as the taxpayers. You and U. S. means Sweden and Europe and everywhere else.
We are taking on that cost. And then we have a politician to help us to regulate that cost towards the companies. And that's going very slowly because they're also dependent on incomes from the company. So you have this very intricate situation, you know.
[00:36:02] Phil Dillard: Well, it is an intricate situation. And I think our extended producer responsibility laws are a start.
My understanding of them, they're addressing packaging and waste and end of life of certain parts of it. But they probably need to extend to looking at the whole value chain of a product or service and saying, wait a minute. Let's really think about this because if you have to break the system, one of the things we're studying right now is feeding the world sustainably, right?
How do we look at from cradle to cradle our food system and make those systematic breaks that cut out that, you know, significant contribution to carbon emissions, for example, or insecurity because you've industrialized a farm and somebody can become poor because one crop fails or one thing is supposed to having a diverse basket of goods.
So it seems like EPR laws are a good start. I don't know what else there's out there that's helping people to challenge the industry. I'll go to Buckminster Fuller, right? He says, you know, don't try and go head to head with a massive industry to create something that makes that obsolete, right? So do you see anything out there that are green shoots of where we can inspire entrepreneurs?
Consumers, non profit innovators, where can they go to start moving to the
[00:37:19] Sasja Beslik: next level? Yeah, they and I come across a number of them both in Europe and in the US and even in the, I mean, growing in Asia because of the need. It's not necessity. It's not because they want to be entrepreneurs and be cool and all of that because they have a necessity.
You know, they actually see that what needs to be done, especially in Asia. But I also think one of the things that is a bit dangerous is that you have, if you're an entrepreneur today and you try to find the scalable sort of a solution to existing problem, you're still judged on your ability to grow and scale in a financial way.
Do you understand what I mean? So you're putting yourself, you get into the boundaries very quickly, what this solution is. And I think this is sort of reminding us that some of the solutions that we need are not going to be win win. You know, and this is also the illusion what we have. Sustainability doesn't mean that everybody wins.
I mean, it doesn't mean that everybody's going to make money. Somebody, you know, somebody will need to take a check for something, but it's better that we do it in a Western world that we can afford it than somebody in developing countries that actually cannot afford that. So that's also the angle that I think needs to be brought up a bit in the discussion is that not everything is going to be women.
Sure,
[00:38:31] Phil Dillard: I think we tackle that by changing the financial models, right, by, I describe it as integrating financial and impact returns, that it's not growth at rapid scale because I need to capture a market right before somebody else gets there. It's growth at a scale that's... Realistic and sustainable that makes sure that we get the answer right so that it works in this market and it works in that market and lessons can be shared.
And there's got to be a new model for equity that kind of comes out of it.
[00:39:02] Sasja Beslik: Yes. And the long term perspective that, you know, back in the time I was a CEO for investment funds in Sweden and I had a discussion with my board to change investment horizon for some of the equity products we were managing and I wanted to change it from one year to three to five years.
Three to five years instead of one year. And they wanted to fire me. I mean, it was like, what the hell? You know, it's like our entire industry has always been an annual basis and everybody's evaluated on an annual basis, relative absolute level and all of that. And I said, look, if we, you can't sell sustainable fund and say to people, look, it's going to give you a result in the year.
It doesn't work that way because companies need more time. So any sustainable investment vehicle that gives you a, uh, impact, sort of a contribution attribution, uh, within a year, for me, I would ask myself question twice, you know, is it really a real thing or is it just a marketing? Because. If you want to get the company to change the parts of the business model or product line or service line, the company needs time.
Even if they really are committed, they need time to sort of get it done and you, you need to see it through. So I think, you know, politicians, what they could do and regulate. Which they do in Europe, and you asked about what sort of are seeds of the change. Disclosure in the European Union on eutexonomy and SFTR on the other side, Sustainable Financial Disclosure Regulation, is pushing disclosure into a public space, which means people will be able to see how bad it is.
And when they see how bad it is, then they actually can take a decision and say, okay, what we're going to do with the capital flows today. Now, I mean, going forward.
[00:40:35] Phil Dillard: Sure. I describe that as, you know, once you see something, you can't unsee it, right? Once you can't unsee it, then you have to choose what you're going to do with it.
Right. There are so many examples of this. Strangely enough, the one that's coming to mind was a conversation we had about race during the pandemic. And I was standing there, um, talking with a friend of mine, who's a white guy and another friend of mine, they were both former military officers too, who came up and we were talking about race issues.
And they were like, you know, there was post George Floyd and all this stuff was, you know, was raw to a bunch of people. And they go, he was like, well, you guys don't have problems like that. You know, thinking this happens to other people. And then. Each of us cited a certain problem and the guy said, wait, that happened to you?
That happened to you? And he's like, that's why you do certain things? And you could see it click in his head. And he was like, wow. And I was like, yeah, once you see that experience, you then have to choose what you're going to do with it because it became real to him at that moment. And I've seen a number of different examples.
And I love the fact that SFDR, pushing disclosure makes problems real, right? People have to
[00:41:40] Sasja Beslik: see it. Tangible things, it becomes very tangible. So if you look at it, there was a study, I think I mentioned it recently as well. It's how many of the asset managers actually aligned on their sort of financial projections with a, with a Paris, you know, targets and on, on the climate sort of a net zero targets and all of these things, none.
Because the business model they run and the financial growth measures they use compared to the climate commitments, they just don't go together. They're completely separated. And this becomes visible.
[00:42:09] Phil Dillard: One of the questions I was going to ask is like, how do we inspire people to listen to change? And what I'm hearing from you is we need to find things that make it realistic to people and relatable to people, right?
It's like celebrities will talk about an issue because it mattered to, you know, their mother or their grandmother or somebody got sick. Right. People can associate things that happen inside of their tribe to themselves or to their families, but it's hard. to affiliate with the other. And I feel like there is this making things realistic to people at whatever level until it clicks for them and they run over to it thinking about the issue.
I know that you rail on this often because every day there's different something else that comes up and you say, I can't believe that people are still doing this. But have you found anything that works to hammer the psychological aspect?
[00:43:02] Sasja Beslik: I think people are generally, I think generally, you know, across the world, intelligent human beings and people actually want to do good things.
That's my starting point. I mean, despite the war and all the experiences I have, I think generally normal people want to do good things. So just to give you an example, so I have a discussion with a guy that runs environmental research agency in the way, this is in Sweden, this is a couple of years ago, it actually got me to write a book about investments later on.
So we have a discussion, he has kids. And he's just telling me, I just bought, uh, you know, EV. I'm so happy. My kids are happy. You know, I'm just gonna sort of, uh, go off the grid, uh, for fossil industry and all of that. And then we have a conversation. I'm asking, well, what about your pension money? And he looks at me and says, what, what, what?
I said, what about your pension? So you buy AV, but you're investing in, in the companies that are actually diluting everything you're trying to do and your kid's future. So when people get the click, and in the book that I wrote a couple of years ago, we actually did a calculation. In Swedish pension system, we look at the system and then we looked at the footprint, you know, of the individual in the pension system.
It's 25 times more carbon dioxide in your pension savings than it is in your, you know, footprint American sort of, uh, 11, 000 tons per year in the U. S. It's like four, five, six, maybe 20 times more in your pension savings. And that's what we need to get people to understand. Use the system.
[00:44:27] Phil Dillard: You know. Right, right.
I would say about nine months ago, we had a conversation with a guy who was one of those stakeholder activists, kind of like, it's number one, he's an attorney, it's number one's an investor. We found another startup that was actually helping people look at their portfolio, both their retirement portfolio and their direct investment portfolio, and do an analysis.
If the investment, the investments they were in actually aligned with their ethos. And it's a, it was a beautiful opportunity to do just what you're talking about.
[00:44:57] Sasja Beslik: It's almost like, think about it effort wise. It's not about, you know, biting a new vehicle. You just use the financial industry, financial system, but you just shift the focus of it.
You still make money, but you actually use the system in a smart way.
[00:45:11] Phil Dillard: Outstanding. I love it. Use the system and shift the focus. Okay, so we have three questions that we ask everybody at the end of the show. So question number one, ten years from now, what does success look like for you? Ten
[00:45:24] Sasja Beslik: years from now, success is to really spend time with my children as much as I can and enjoy in their journeys in life.
That's what I would like to do. There
[00:45:35] Phil Dillard: you go. You know, I never thought about early retirement until I thought about how I want to spend my time in the years where I see my parents, you know, or your grandparents, but that's a good one. That's a great definition of success. There is a lot of fear about artificial intelligence and things like that.
But if we can leverage AI to increase the amount of work that we can get done and effectively, so in a 40 hour work week, we can do it in 10 or 20 and spend more time with our families and on the issues that matter, I think our world would be a better
[00:46:08] Sasja Beslik: place. I agree. Look, for me, artificial intelligence, I have this sort of almost like a quote, say embrace and regulate.
Embrace. But regulate. I love
[00:46:17] Phil Dillard: it. Yeah. Yeah. Yeah. And if you're going to be real about self regulation, then really self regulate. We
[00:46:24] Sasja Beslik: need, I mean, in the U S you already have some of the initiatives, I mean, by Biden administration, I think you will see the same thing in Europe. I think we should embrace it, but definitely regulate it and actually have an ability to steer it much more than we do today.
And I think that
[00:46:36] Phil Dillard: the industry should take an active role of saying, this is how we're doing it. And, you know, I'm seeing some amazing things from in the tire industry, actually in the U S working with. So folks, particularly from Pirelli and the National Tire Manufacturers Association to try and get ahead and live their ethos.
And I've been in places where industry went to actually make these things happen and politics got in the way of it and prevented it from moving forward. So we needed to get on this, uh, this
[00:47:02] Sasja Beslik: fight and rule. We can't stop it. You know, you can't stop it because it's already, it's like, you can't stop the power engine that after the horses, I mean, you can't stop it.
This is just going, but we need to be smart in the way how we utilize
[00:47:12] Phil Dillard: it. Awesome. So what are the most important things individuals can do to influence governments, NGOs, or corporations to drive for a better future?
[00:47:22] Sasja Beslik: I think the most important thing individuals can do is to respect themselves and respect their own worthiness and the values in the societies where they live.
Because if they don't respect themselves and what, who they are and what they stand for, they will not respect anything else. They will never change. So the love for yourself, you know, if we want to talk in these terms, I mean, that's the biggest driver for change for many of the people. And it really
[00:47:46] Phil Dillard: requires a certain amount of self knowledge and self awareness, but it also requires you being honest with yourself and looking at something and saying, this is easy, maybe too easy.
People are talking about this, I shouldn't turn a blind eye to it, but maybe I should see does this align with my values or not.
[00:48:03] Sasja Beslik: What does it mean for me, you know, what does it mean for me? Exactly. Exactly. I think that all the changes started with us, within inside, all the changes are driven from the inside.
Of course, there are a lot of external things, but if people start loving themselves, this is one of the things that surprised me the most. What you see around the world is like almost that humanity hates itself, because what the things we're doing to ourselves, it's just completely nuts. Wow.
[00:48:26] Phil Dillard: That's so great.
Honestly, though, I mean, with your title, you know, but somebody who says this guy's managed billions of dollars around the world, and his biggest recommendation to people is love yourselves, start loving yourself, really. We just need to hear more of that message. And to me, it seems like you process and internalize so much of this information, maybe because of the trauma early, maybe because of the world.
But thank you so much for sharing that wonderful insight with us. I know we're out of time. Any final thoughts you want to share with our
[00:48:56] Sasja Beslik: listeners? Now, this is great. And I will, you know, anybody who really wants to make a difference, I think whatever you do symbolically, it's very important, but think about how you use the system.
The financial system is the sort of the one that controls politics as well. Imagine what we could do if we can just shift it a
[00:49:13] Phil Dillard: bit. Yeah. Amazing. And with that, well, we'll wrap up. Thank you so much for your time. We really, really appreciate it. And thank you everyone else for coming to another episode of Thruline to the 4th Sector. We look forward to seeing you sometime soon. Please take a moment to rate and review the show and join us each week for a new episode.
Thank you for listening to this episode of Thruline to the 4th Sector. I'm your host. Phil Dillard. If you enjoyed the show, please leave a rating and tell a friend. To learn more about the fourth sector economy, visit ThrulineNetworks.com. That's T H R U L I N E networks. com. Thanks again, and we hope to have you with us in the next episode.