Episode 075: Yvonne Renard, Anthesis Group

Speaker A: Welcome to the Economics and Strategy Podcast, where business plans and market behavior intersect. I'm your host, Rich Mullen. This podcast is brought to you by the Business Strategy and Decision making program at DePaul University's Department of Economics. Yvonne Renard is an environmental economist with a gift for empirical research and a graduate of DePaul's MSEPA program. She specializes in climate risk and resilience at the global environmental services firm Anthesis Group. Yvonne helps clients identify and quantify their material exposure to risks emerging from today's rapidly changing environmental conditions. While this topic can be controversial, she explains how the realities of climate risk are already moving markets and reshaping firm behavior in ways that will keep her work in high demand. In this conversation, Yvonne breaks down her work and why companies are seeking this insight for financial disclosures and mitigation efforts alike. Controversy fades, but markets will always win. Listen in to hear how. Yvonne Renard, welcome to the Economics and Strategy podcast.

Speaker B: Thank you.

Speaker A: It was nice to see you. You and I had some classes together, and, uh, so it was nice to see your name on the guest list here, and I think this one's going to be very interesting to our audience because you are listed as an environmental economist. Yeah, I'm a current job is principal, uh, consultant, climate risk and resilience at a company called Anthesis Group, uh, based in London. Right.

Speaker B: Yeah, we were started in London, and now our American presence is headquartered in New York City. We're all remote, and we're spread around the whole world now.

Speaker A: And it's been a little bit of a winding road getting to your current role, but this is a pretty cool role you have.

Speaker B: Yeah, I don't think I graduated from DePaul thinking I would become a consultant in climate risk and resilience. That was not really on my. On my radar at the time, but

Speaker A: it seems to fit, doesn't it?

Speaker B: It does, it does. I think especially with some of the work that I have done at DePaul. It's not a surprise. Yeah. Uh, because I would tend to try to lean more on the environmental side in papers and projects where I could, um, which I actually pull up now for some. For some projects that I'm working on as a reference. So, um, it's cool to see it go full circle. Yeah.

Speaker A: And I do remember that, by the way. I do remember that. So, that said, as we always do, we start with kind, uh, of some of the backstory for Yvonne Renard. So if you can start us off with, you know, a little just a few minutes about where you're from, kind of your personal background or interests and, and how you, you know, where you went to undergraduate, graduate, and where you, what you studied, that kind of thing. Can you give us a little background?

Speaker B: Sure. So I grew up outside of Boston, uh, in Massachusetts. And I grew up most of the time in the U.S. but my dad is from France. So I would grow up spending some summers, normally around Thanksgiving, going to France and spending time with family there. So I think I very early on was exposed to a lot of the world and seeing how things were done in one country versus another just kind of sparked a lot of curiosity and a love for travel. So one of my, one of my main interests even still is traveling and exploring and really understanding the why to things. I went to undergrad at a university right next to my hometown, Pittsburgh State University, and I really enjoyed a lot of my economics courses. So I think it just naturally turned into a, um, a major that I pursued.

Speaker A: A couple of questions. First, I've often heard and experienced some. Travel is the best education that you can possibly give your brain. Would you. I mean, you think that's part of why you are who you are? You're a very smart woman.

Speaker B: Yeah, I think, I think so. I think, um, growing up I got to see wind turbines very young, and that was because France was moving forward in the renewable energy investment faster than at least where I was growing up. So getting to see these big windmills and being told that that's creating energy was really cool and something that I got to look into early on because I wasn't really exposed to that. And I think, I do think travel exposes you to a lot of things that you typically you don't see in your day to day. And some people will see that and they'll just be like, oh, I don't like that. But a lot of other people tend to be like, well, why?

Speaker A: So also your initial love for the economics. Have you ever been able to pinpoint what it was about economics that kind of drew you in?

Speaker B: Sure. So I started college having no idea what I wanted to major in, as many people do. Um, and I went into it knowing that I like to travel. So I wanted to target a major that would be international business related. I've always been good with numbers, so I wanted to do something either in finance or economics. Wasn't really on my radar. I really hadn't even heard about what econ was until I was taking Econ101 as like a required course. But at Pittsburgh State, the International Business Concentration is within the economics major. So in order to go after that international business major that I wanted to focus on, I had to take a lot of economics courses. And I think once I started getting into, like, intermediate economic and public economic and even econometric, it really just started to click of, like, this is a lot more than just money. It's like trying to understand how we handle these. These various resources, what the drivers are of how these resources are being handled, what's creating that demand, what is leading into that supply that we have. And I think when I stopped looking at it as the study of money and more as the study of limited resources, it became a very interesting tool to look at through the world around me.

Speaker A: Yeah, you're also, at least at DePaul, pretty gifted in, uh, the technical end of econometrics, I think. I went to the help center once. And you actually helped me.

Speaker B: I was a. Yeah, I was an RA. I was always in the DePaul. DePaul department.

Speaker A: Thank you for the help.

Speaker B: Anytime.

Speaker A: So you graduate from Fitchburg.

Speaker B: Uh, what was your first job graduating from Fitchburg? I went into a job called an operations auditor at BJ's Wholesale Club, which is similar to, like, a Costco or Sam's Club.

Speaker A: Ann, did you like this? Give us a little bit about what you did and then tell us why it wasn't good or why it was good.

Speaker B: Sure. So I loved my team at, uh, VJs. I still talk to some of the people that I worked with, and it's been 10 years later now. Um, and essentially what that work looks like for me was I would represent headquarters or home office, and I would pop up into different clubs all along the east coast and scare Management, because I would be auditing eight different departments within the club to make sure that they're following regulation, uh, like OSHA food safety standards, making sure that they're complying with any HR protocols, any internal initiatives. So nobody was really happy to see me when I was working at BJ's. It was a fun job. I got to travel a lot, I got to see a lot. Um, but I wasn't really thinking critically what I was working on. So it would be more like, um, are they selling any expired food product on the floor? Yes. No. Or, like, are these pallets that are up in the steel safely placed? Yes. No, it wasn't critically working to solve any problems, if that makes sense. So I decided I wanted to use my brain a little bit more, and that's when I decided to get a another degree.

Speaker A: So that was really it. You didn't want to be, um, kind of an automaton out in the, out in the world, uh, you. And did you know you wanted to get a, uh, Ms. In Economics?

Speaker B: I was going back and forth between getting a master's and a PhD at the time. Um, I wasn't positive on what I would want my PhD thesis to be, which is why I ended up driving more towards a Master's program instead of a PhD, because I think you have to really know what you want to dedicate your dissertation to. So I was not, I was not at that point yet. So I think a Master's was very easy for what's a very easy answer for me at least, because I got to use it as an opportunity to learn more about pivoting into something else. But I still wasn't really sure what I was trying to pivot into.

Speaker A: What, uh, what brought you to the Windy City?

Speaker B: So I had, I had traveled again, love to travel. So I've been to the city before and it, I fell in love with the city. I like the people here. I love the food here. Um, there's a huge airport, which is a plus for people that like to travel. So it was, it was checking a lot of the boxes for me. And as I was looking at the various master's programs that are offered in the city, DePaul was the most aligned with what I was looking for.

Speaker A: Who did you interview with early on and kind of what, uh, what sealed the deal? You visited, obviously, right?

Speaker B: Mhm. Mhm. Yeah. So I, I was still in very close contact with a lot of my professors from Fishburg State. So I was talking to them kind of as mentors, saying, I'm looking to go back to school.

Speaker A: School.

Speaker B: These are the things that I want to do. And DePaul's program at the time was, um, Economics and Policy Analysis. So I really liked that I would be able to combine my passion with economics with potentially some policy work. So maybe getting to make a pivot away from retail and into something that would touch more people, impact more people, like a policy related job would do. So I reached out to the Department of economics at DePaul, and Gabriella Bucci had reached out pretty quickly and she was like, let's get on the phone and just talk. Uh, if you have any questions, I'm happy to answer them. So I just called her up on the cell phone and we, we got to talk. She asked about what I worked on at Fitchburg State, because I had some published research There, which was really cool. And then I got to talk to her about what she did in her academic career, and we clicked really well, obviously. Exciting to see a woman in the econ space, and big time right there. She's very. Yeah, she's extremely confident, but she's also, like, a great person to talk to, even if you're not exactly sure what you're looking for. She was a big reason that I was. That I decided to go to DePaul, and excited to go to DePaul.

Speaker A: Yeah. Her impact both, you know, in economics locally, but, uh, amongst the young women that have gone through the program is wide and deep, for sure. She's, um. And she's earned every ounce of that, and I'm super proud to know her. Um, tell me just a little bit about kind of some of your favorite moments. Uh, we didn't mention it in the beginning, but you did, uh, that you're an MSEPA grad from 2019. Tell me a little bit about your journey. What do you. What were some of the favorite things that you did at DePaul? Some of your favorite people? Maybe classes? Just a couple of things.

Speaker B: Yeah. So I was a graduate assistant while I was at DePaul, so I was a tutor during the week before classes. So all of our classes were at night. And I would essentially be in the econ department from noon to 5 every day, and then from 5 to 9 taking classes. And it was a really good way for me to solidify my understanding of just core econ theory, because as a tutor, you're having to explain the. Explain the fundamentals to people that are coming in. And we were tutoring any undergraduate at DePaul that were in regardless. Yeah, any undergraduate course. And it was. It was great for me. I did it with, uh, Brent Toom. I still talk to him a lot.

Speaker A: You do.

Speaker B: And we were.

Speaker A: I remember him.

Speaker B: Yeah, he's doing good. Um, and, yeah, we would take tutoring on together, and I think. I think that made the program feel much more, like, close, more familial, because I got to know a lot of people within the econ department from undergrad all the way through the staff, just from being there all the time, as well as just getting close with the cohort that I moved through the program with. I think some of my favorite, favorite, uh, classes, obviously. Gabriella Vucci, public econ course. Um, just because I loved my public econ course in undergrad. And then getting to. Getting into it at the graduate level was a really cool opportunity, because I think we were in that class together. Um, yeah.

Speaker A: You know, I was going to say, the thing about that class is the application of policy in an empirical setting.

Speaker B: Yeah, it was great.

Speaker A: It was great.

Speaker B: It was great. The structure of it. Like, we have a case study every week. We get to discuss, like, the key findings. Um, and it's similar to how my work is set up this week. Like, currently, now of like, we have the problem, we can talk about it ourselves, we can pull in the relevant subject matter experts and then make an informed decision to move forward for the client or not, or, like, recommendation for the client to move forward with. Um, but that was a class that I wrote my paper on, the bee economy. So I was talking about how climate change is affecting pollinators and now there's a market for farmers to rent bees. So I just talked about how there's a market failure that's creating the demand.

Speaker A: You know, I remember that and I actually, I'm going to ask you a question on that. I'm wondering whether has that resolved somewhat.

Speaker B: No, it's still a thing.

Speaker A: It's still a thing. Yeah.

Speaker B: So farmers are still renting pollinators. Um, colony collapse has been linked to, um, certain chemicals. So we have a better understanding to why the bees are not doing as well. Um, but there's still no policy put in place to protect the bees yet at a federal level, everything's got to

Speaker A: be a crisis before anybody will do anything.

Speaker B: Yeah. And as long as you can rent the service, I guess so.

Speaker A: You mentioned your ability to learn to communicate economics to all levels of people, which is a magnificent education, by the way. You know, you're an expert if you can communicate these topics to a variety of audiences. Right.

Speaker B: I mean, that's true, yeah.

Speaker A: Um, what are some of the other skills that you learned that are valuable now?

Speaker B: Yeah, I think, um, I think a big thing is just research in general. So knowing how to find data, where to find it so that it's reliable and can be sourced properly. Um, and then how to read it, how to analyze it. I think especially in the day and age that we're in right now with AI, I think there's a lot that computers can do for us, but I think we're always going to need that human touch to just check. Like, is this paper that I'm citing relevant if it's been published eight years ago? And like, can I be finding anything better If I'm looking at the raw data, how am I thinking about the outliers? Do they make sense? Or is this data Set just not what it needs, not as reliable as what I'm looking for. So I think, I think that's all either. What was taught throughout the econometrics courses that we took. I remember Professor Phelan labor economics course was very applied. And using data and learning how to write loops and visualize data. I think that that has been probably the most relevant skill that I've learned at DePaul because I do use a lot of numbers and data analysis in my current role.

Speaker A: Was that labor? Was that the one we were in together? I don't remember, but we were in one.

Speaker B: I know we took Professor Tenorio course together.

Speaker A: No, we were in one of Phelan's classes together.

Speaker B: It might have been labor then.

Speaker A: Okay.

Speaker B: I think that was the only one. But that was very, very state intensive. So it was good to get a basic. It was good to get like a basic understanding about programming work.

Speaker A: Yeah, I think I mentioned to you before I struggled with Stata programming itself. I mean, I know I've learned Python and I've learned others. Stata was always really clunky to me. I don't know why, but I had help from. You remember Guillermo? Yeah, yeah, he was great. We worked together a lot. He helped me a lot. So, uh, I thank him too. You know, one of the things I wonder about, and you mentioned this in your skills that you learned thing is that, um, knowing the data you said, which is foundational in any empirical work, know your data. I mean, I assume in your work you are on. You're knowing and understanding your data really well and not necessarily solely let me do the analyst work. I mean, I assume you're up close. Yes.

Speaker B: Yeah. So I'm doing a lot of, a lot of technical review on published research to make sure that it's relevant to our clients. And I think there's only a handful, at least in the space that I work in, there's only a handful of data sets that are best practice used. And there are a lot of people that end up in this space or like try to work in this space, but don't fully understand those data sets, the limitations to those data sets, any assumptions that are going into them, and it makes it really hard. And I think it can discredit a lot of work in this space when people are over promising the ability of what a data set that we're working with is capable of telling us. Because I right now do a lot of work in scenario analysis. So we are looking at a data set that's trying to forecast the economy out to 2050. And there's a lot of things that could happen from now, in the next 24 years. And I think when the messaging is off with that key final takeaway, it's not going to make sense to somebody that's like, well, we don't know what's going to happen next year, let alone in the next 24 years. So how can you tell me this is my risk over this long of time? And I think knowing what the underlying assumptions are and the limitations that go into that is always going to be important and how to interpret the results that we give.

Speaker A: So would you. I guess I would ask, um, those who are not being as diligent about the data and the modeling and making promises as you said, that they can't necessarily back up are sort of the termites to the credibility of this kind of modeling. You're nodding. So I assume that's true.

Speaker B: I think so, yeah. I think it can do a lot of damage. Like, I think I work in the climate risk, and I think that they're. I think that it is already a polarized.

Speaker A: Yep.

Speaker B: Subject. And when somebody's coming in saying, like, oh, we have this crystal ball and by 2045 you're going to owe this much in taxes because your emissions are this much, nobody's going to take you serious. And I think it creates an uphill battle for people that genuinely are trying to make more of an impact and use the key findings from analyses, like what we do to inform business decision making.

Speaker A: You know, it sounds like you're operating more almost in an academic model, in the sense that it's rare that academic presented, um, research. They do affirm causal link. They rely on the accumulation. Uh, yeah, you're nodding. You know what I'm talking about.

Speaker B: We do, yeah, we do. In a sense. I think it's. I think it's great when I can work with people who have a deep understanding of something, whether that means they have a more advanced degree in any topic or they just have published research or something. Just because I think it show. It shows that you have an, almost an understanding of what goes into, like the rigor of publishing certain research and then being able to say, like, it's been peer reviewed, um, it's being endorsed or backed by these various organizations. Like, if the World bank is pushing something forward, talking about it, I know that I can more or less rely on that information. I'll still look at it from, like, my personal curiosity.

Speaker A: That's the accumulation that I'm talking about. You're standing on the shoulders of previous work and it's that accumulation and understanding

Speaker B: that work is very key.

Speaker A: Yeah, yeah, absolutely. So I think in the interest of time, you had a couple of roles after you graduated DePaul program. Uh, you had a couple of roles before that. But I think in the interest of the time, we'll go right to talking about your work at Anthesis. Is that okay?

Speaker B: Sure, yeah.

Speaker A: So tell us a little bit about Anthesis, something about the suite of services and uh, why clients hire Anthesis. Can you give us?

Speaker B: Sure, yeah. So Anthesis is a global sustainability consulting firm and we help our clients with their climate strategies. So that can include um, decarbonization or net zero pathways or companies that are trying to lower their greenhouse gas emission. Um, we help them with that, we help them with their inventory just to get an idea of how much they're currently emitting. Um, any ESG related reporting, carbon accounting and impact, capital dilution, human rights assessment, nature reporting. So we, we do a bit of everything in the sustainability world and clients hire for a bunch of different reasons. They're either subject to a new regulation that's requiring them to disclose either their greenhouse gas inventory for the first time and they have no idea where to start. They've done a, ah, greenhouse gas inventory assessment, but now they don't know what to do with it. They don't know what levers they can pull to reduce their overall emissions. They understand that they rely on nature, but they've seen a few disruptions in their supply chain. So they're trying to see how they could become more resilient to those fluctuation. I think we're kind of like a one stop shop. Anything sustainability related. We have a lot of incredibly smart people on the team. So it's been really great personally for me because if I have a question about regenerative agriculture, I know that there's someone on the nature team that can answer my question.

Speaker A: That's a niche area, by the way.

Speaker B: Yeah.

Speaker A: You know, I want to ask one, one more question before we go deeper. Uh, because I want to ask you specifically what you do.

Speaker B: Mhm.

Speaker A: For Anthesis. When and how did your interest in environmental issues become so strong like that you knew this was where you're going to go?

Speaker B: Yeah. So I think, I think growing up I obviously was seeing how people were living in the us I was seeing how people were living in France. And I have one cousin who takes her plastic use very seriously and her plastic waste and this, she started talking to me about this. Maybe back in like 2005. So this is before um, really anyone in the US that I was around started talking about this and I was just starting to become aware of like, wow, maybe I should care about where what I'm putting in the trash, like, where that goes next. And like, is it going to sit in a landfill or could it be composted or recycled? Like just starting to think about that much earlier than any of my friends in the US were, um, the time. So I think it's always environmental impact has always been something that I've personally been passionate about and cared about. But the moment where I was like, wow, I can really combine my like, academic econ training with my passion is when I was working as a, just a general financial risk consultant at a small consulting firm right after working at DePaul. And I was looking at different certifications that I could get, um, just to get more familiar with risk in general and how companies, banks talk about risk. And one of the certifications is climate risk. And like, as soon as I read that I was like a light bulb went off and I was like, that's what I want to do. I've been working in climate risk now for seven years.

Speaker A: You can draw a direct line between your questioning the plastics and where does all this stuff go that moment directly to your job now? Uh, yeah, ah, yeah, you can draw a straight line from.

Speaker B: It was not a straight line to get here, but yeah, you can draw it.

Speaker A: So tell us specifically amongst that kind of broad suite of services that Anthesis Group offers and engages in, specifically what do you work on?

Speaker B: So I work on the climate Risk and Resilience Team M and I use my economic training to specialize in transition risk. So climate risk is broken into two categories. You have physical risk, where you have like extreme hurricanes, drought, water stress, extreme heat or extreme cold. And then you have transition risk, which is any risk associated with the transition to a low carbon economy. So I look at ah, how company revenue could change under a, uh, low carbon transition. So are there more regulations in place that could affect you? Are your customers asking for less carbon intensive products? Are your suppliers still able to give you your key materials at the price you're paying today? Well, the technologies that are being rolled out, um, make the equipment you hold today irrelevant. Um, and then we also work on the resilience side. So as we're finding these risks, like what recommendations can we give you to your as a business to become more resilient or mitigate against these risks?

Speaker A: Uh, when you talk about These risks are ah, they primarily financial risks to the entity going forward or the risk of the damage to the environment that they are doing in current practices. Is it both?

Speaker B: It's both, yeah. So I think um, yeah, the answer is definitely both. But there are some companies that want to know both. Most just want to know what the risk is to their business as an entity over time and how that, how they could be exposed. Because again as I said earlier, we don't have a crystal ball so we don't know what decarbonization pathways the world will take. Um, but we do have scenarios that we can say like what if? And we'll be able to make suggestions to clients like if the world were to decarbonize, things would look a lot different than they look today. So what does that mean for you and for the client that wants to go that extra step of really understanding what their impact is on the environment, like their, their entity posing the risk to the environment. We do work with them as well and that's very interesting work because then we're looking at the value of the land that they're working on. What was it before that are using it in its natural state to what it is now? Um, how much carbon was being sequestered there, how much is now being emitted there. Um, impacts to water, impacts to nature, all of it.

Speaker A: So let's talk about, because you're talking around something I learned from you. Uh, uh, uh, these frameworks that you use, uh, so there's two, one's called TCFD and one's called tnfd. And these are foundations that you use in your reports. Tell us which each one is and what they mean to the client.

Speaker B: Sure. So TCFD is from the Task Force on Climate Related Financial Disclosure for TCFD and that's climate related. So it is essentially a framework to help companies identify and then manage their climate related risk. And then tnsd, similar but nature N for nature. And again it's to determine what their impact and dependencies on nature are. So that way they can see as it deteriorates over time what levers do they have to pull or where could they be most exposed to different risks.

Speaker A: How are these uh, frameworks built? What you know, what is the governing body that built these and what is it used to standardize for?

Speaker B: Sure. So the TCFD framework was put together by um, fsb, they're in Basel, they're a financial international body that are that whose main goal is to promote global financial stability. So they are not really associated with any enforcing regulatory body. But TCFD has now been taken over by issb, which is the British, um, financial regulatory requirements.

Speaker A: Yeah, they are the equivalent of, uh, GAAP here in the U.S. yeah, yeah.

Speaker B: Or the SEC even. Like what you have to publish.

Speaker A: Yeah. So they outline what is the standards that you publish in financial disclosure forms, things like that. Okay.

Speaker B: We just see different regions now requiring companies to disclose their climate risk and, um, in some places their nature risks aligned to the TCFD and TNFD framework. Like this is the way to disclose what your climate risk could be.

Speaker A: What are the events that inspire clients to call anthesis and to have this work done?

Speaker B: Sure. So last year, um, 2025 is a very busy year for my team specifically, uh, because California had passed a climate risk and disclosure bill. So, uh, it was requiring any companies that did business in California and made over a certain amount of money in revenue to disclose their material climate risk. And in order to determine how material a risk could be, the TDFD framework will align, will outline how to get there. So a lot of our work last year was for California SB261. And I think this year we have a lot of our clients that are looking at either the work that they did last year and they want to really integrate those key results into their enterprise risk management system, um, or just get a better idea of what it actually means for them. And so again, it's a spectrum of why they're coming to us. But most of our work last year was regulatory based from that push from that California, uh, bill. And then this year it's a lot more clients that genuinely want to see what their exposure to climate risk could be and then find different ways to mitigate those risk to become more resilient in the long term.

Speaker A: So some market based, some are regulatory, uh, based. Yeah, the California is such a big market and so many companies work in there and I'm sure breach whatever that minimum amount of sales is. I wonder how many of them understand that California could be the tip of the spear of, you know, other areas saying, hey, we need to know what your climate risks are.

Speaker B: Yeah, yeah. So these, I think California was a great step in the right direction for the U.S. new, um, York and Massachusetts and Illinois have put similar bills in place. They didn't go anywhere, but they were put out. So that's a big step. Um, other, other parts of the world, like Australia, all of Europe, um, the uk, they require these disclosures already. So we do see investors that invest globally asking American companies what their Material climate risk could be. And I think a key argument for companies doing this type of work is investors are going to try to determine what your climate risk exposure is. So it's better for you to do it yourself and give them the work instead of having them hire somebody at a, at an external point of view and have them come up with a number of what your potential risk exposure could be.

Speaker A: So investing investors are starting to do that. It. By definition, those risks are material.

Speaker B: Yeah. Yeah. So in, in Europe especially, um, climate risk is automatically determined material. And you have to conduct a climate risk assessment to identify which climate risks are material. And it's okay if you're conducting your climate risk assessment and no risks become material, but you have to show that you've done that work and you know

Speaker A: in the end the market will win. If investors are pushing for it, the market will win. It almost always does.

Speaker B: Yep. I think anybody who is asked like, uh, how will an extreme hurricane that could affect key infrastructure for your key raw materials affect you? No business can say that. Won't have any impact.

Speaker A: Yeah.

Speaker B: Saying that you're gonna have to show you've looked at it beyond just a vibe. Yeah.

Speaker A: And if it's only from a supp. Uh, if it's not necessarily widgets in a warehouse on a coastline, it's the impact on supply chain.

Speaker B: Mhm. Or it's wildfires where your customers are. Everyone lives on earth.

Speaker A: Let me ask you a couple of things about your work. Not in detail.

Speaker B: Okay.

Speaker A: What's hard about your job? What are the things that take time? Certainly if I remember right, you're managing people, but also interactions with clients that you might have. What are the hard things and the skills that you use?

Speaker B: I think, I think the most challenging is uh, the message and like making sure what our key findings are. Will one be helpful and relevant to the client. So I can't just say, um, 70% of your locations are at risk and just leave it at that. Like I have to be able to go in and say like be to the lever to inform that risk exposure. These are the assumptions that we're putting in place.

Speaker A: Yeah. Good.

Speaker B: One should determine what that risk exposure could be. Making sure that the client is comfortable with those assumptions. Um, because again, I think the space that I work in is constantly changing, constantly evolving. New things are coming out all the time. And so one trying to make sure that things are reliable or like put together in a way that I feel comfortable using in my work is big. Um, and also making sure that the client receives the Message. Well, so there are some clients where if you just say one specific word, they're going to totally tune out for the rest of the presentation, not care what the key findings are because again, the work is pretty polarizing.

Speaker A: Yep.

Speaker B: And I think trying to read the room and being able to again explain the more technical side of things. Of, uh, I know we're looking out to 2050. I know that's a long time. When you're currently defining your long term horizon as five years. I know you're not going to be considering your risk in 25 years. So just making sure that the client one is educated and comfortable with the baseline. This is what we're doing. This is why we're doing it all the way through the journey of. This is why you should keep looking at this and keep monitoring your potential exposure to the risk. I think a lot of, a lot of companies don't have people that are very technical in this space because it is new and their internal data may be limited. They may, they may sell products that are recyclable, but it's not marked a certain way in their data set and in their databases. So there's no easy way to pull that out at a high level. Um, all the way to like, they don't know where their raw materials are coming from. So they don't know what their supply chain exposure could be.

Speaker A: Um, can you even do that in Europe? Don't you, In Europe, don't you have to know where you're sourcing from?

Speaker B: For certain materials?

Speaker A: Yeah, I thought so.

Speaker B: For certain materials you have to, um. American companies don't have that level of expectation yet.

Speaker A: Right. The time you spent in the weeds knowing the data, I'll use that as a metaphor. How has that helped you?

Speaker B: Yeah, I think, I mean that's obviously one of, one of the key tools that I think I left from DePaul with was learning how to take very technical concepts and talk about them clearly and simply. Um, and then as, as you get more like into the weed and people are like, well, that assumption isn't relevant. You're not, you're not incorporating this other thing. I think one knowing not to take it personally because again, I don't know everyone in the room very well. I don't know what their backgrounds are, I don't know what their motives are, what their personal experiences with climate related jargon data, uh, events could be. Um, they're just trying to let the results, the data speak for itself. I will help people interpret it because that obviously like what I'M what I'm here to do. Um, but I think, yeah, I think the hardest and the most challenging part of the job is when we get clients that are very combative right on the beginning because they're like, they don't believe in climate change. They don't understand why they have to do this assessment. Their investors are pushing them or their board is pushing them to do this. They don't believe in it. Um, and sometimes we get people on board. Most of the time we don't. But I think, I think the,

Speaker A: the

Speaker B: point is like it's not something that we have to take personally. We didn't put these data sets together. We are just following uh, a uh, structured assessment to talk about what potential risk could be over time, not what it will be. Um, and then putting it into dollar terms. That way it can be better interpreted. Yeah.

Speaker A: On their end, uh, you know, science, facts and investors markets have a way of overcoming any of those. I don't believe in sort of things. Uh, in the end it's true. I mean and it can be documented over time. Um, yeah.

Speaker B: And like there's always assumptions going into these. Just document it and we can change them as needed. Yeah, that's totally fine.

Speaker A: M. Ah, as I always do. We are over time. So I'm going to go to our last section here and ask you to give us. And this ought to be a really good one by the way, given your work. Um, what are some, uh, innovations in your world that are going to really improve and help your industry or your work specifically? And then what are threats?

Speaker B: I think I could probably answer both of those with AI. I think AI is obviously like a major topic of the time and it's very powerful. Um, it saves me a lot of time. It saved me much time doing research, deep dives, um, any problems that I'm having in programming or with Excel formulas. It's much faster to solve and troubleshoot. Um, I tend to use AI more as like a, like a personal subject matter expert. So if I'm trying to think through something, making sure that I totally get it before, before bothering someone else with an anthesis, that's the truth. Me that way I have a general idea before I just jump right in with them. Um, but I do think it can be a threat as well. Kind of going back to that point of um, if you don't know your data, you're not sure if you're going to be interpreting things. Right. Um, I think AI doesn't have the capability of taking an output and considering if it's realistic yet, um, I think it will take an input and then give you an output, and that's the output. You can question the output. Um, but it's always going to be like, you're right, good catch. It's not going to, it's not going to correct the internal code to make sure it doesn't happen again. So, um, I think there's a challenge with AI or a threat with the AI where it is powerful, it's helpful, um, especially in research and just introducing yourself to new concepts. But I think a key thing with AI is one that it hallucinates. So if you can't clearly go back to its source, it's not always going to give you the correct information. Even if you give it a paper to summarize, sometimes it doesn't do that correctly. So it's not something you can entirely rely upon. And there are some companies now that are relying on AI to conduct climate risk assessments, to totally do the work that we do just all through AI. And I think we will see those get better. Like the tools that rely on AI over time. I think that we will see that get better, but I don't think that it will totally replace the need for people with technical backgrounds to be able to go in and send check. Like in a low carbon economy, does it make sense that the US would still have 50% natural gas reliance or things like that?

Speaker A: I think your work, becoming a communicator and an analyst will help you going forward because, uh, all of those things are true that you just said. Of course, you know what you're doing, you're living it. Um, but you know, your ability to communicate these issues and to be an analyst, uh, will play because that's still going to be a role.

Speaker B: Right? Yeah. I think critically thinking about what you're given will always be in my hand. Yeah.

Speaker A: Um, Yvonne, nice to see you and thank you so much for being on the podcast.

Speaker B: Yeah, thank you for having me.

Speaker A: Uh, take care. You've been listening to the Economics and Strategy podcast presented by the Business Strategy and Decision making program at DePaul University's Department of Economics. This episode was produced, edited and hosted by Rich Mullen. Our, ah, music was composed by Liz folks.