An Interview with Bruce Kahn, an Ecologist Who Became an Investment Banker
Bruce M. Kahn, age 53, is an ecologist on Wall Street.
A scientist by training, Kahn turned to investment research and management as a career trajectory with the purpose of initiating large-scale sustainable investments. He carries a B.A. in ecology and evolutionary biology, an M.S. in fisheries and allied aquacultures, and a Ph.D. in land resources. He currently works at Edgewood Capital as director of investor relations, and teaches finance, statistics, and agriculture in the Sustainability Management program at Columbia University.
Kahn’s educational and professional background in environmental sciences and business has given him an intriguing perspective. He does not operate in the philosophical mindset of “should we” be doing this or that as a society to further sustainable practices, but rather has a perspective where everything correlates to the market. The will of consumer demand determines everything, in his view.
In this interview, I spoke with Kahn for insight on sustainable investment projects and the future of agriculture. There is a relationship between science, agriculture, and energy, but also underlying concepts tied to markets, consumerism, ethics, and human behavior, which we must face when dealing with problems and solutions for climate change.
Kahn looks for transformational developments in sustainability. On a day-to-day basis, incremental improvements in sustainability do matter. But until now, he says, there has not been anything transformational in sustainability. As an example of a transformational change (albeit a negative one), think about how COVID-19 has completely changed our lives. In his work, Kahn seeks sustainability projects that will transform our lives and society for the better.
This interview has been edited and condensed for clarity.
Based on your academic background being primarily environmental science, how and why did you make your career in investing and asset management?
I was interested in finding solutions. Through investing, using capital markets was my way of solving social and environmental problems; I was interested in the scale of capital markets and the ability to have a tremendous impact. Science operates myopically. You still need the science, but using capital to find solutions was more amenable to my personality.
Since you studied land resources, how do you feel about pesticides and fertilizers, and the affect this has on soil?
There is an overuse of fertilizer because we don’t use it efficiently, and fertilizer waste is going into surface water and can negatively affect soil health. We need to be careful about how much we use fertilizer, but I caution people about being negative about fertilizer. Fertilizer is what transformed agriculture and changed the world to be able to feed and grow our population.
In today’s world, farmers are not going to risk their production and yield by under-fertilizing. The idea of stopping the use of fertilizer altogether is an interesting aspiration, but not part of the culture today.
What is your opinion about organic farming? Some people only buy organic food; some people think it’s complete nonsense.
I think that consumer preferences are important. If consumers want to buy it, there is going to be growth in the market for organic products.
Do you have an opinion about organic — is it better than non-organic?
Is it better? I wouldn’t frame it that way, a debate of organic versus non-organic. With organic farming, you cannot present the same total volume to meet the demand. Organic farming is very positive for the environment but cannot meet global demand alone.
Organic is “trendy” now. Does the science support this? Is it actually better for you?
In terms of nutritional content and the lack of chemical content on your food, yes, this is obviously better for you. The Food Safety Modernization Act mandated conventional grown produce to have many regulatory requirements. While organic may not have as many chemicals used on it, there may be organic waste. Organic farming businesses do not have to follow the same cleaning procedures that conventional products do. When you get organic produce, you really have to wash it, because the likelihood of getting sick is higher. Conventional produce goes through stricter washing regulations.
You have worked in many positions for sustainable investments. What are the main things you are looking for when selecting a project to invest in?
I definitely look for something that has measurable impact and a return. Competitive market rate return is important but I also want projects to have a meaningful contribution. Are they transformational? Probably not. Haber-Bosch, pasteurization, and the movement into mechanization—all these things have been transformational in agriculture. My day-to-day work is marginal improvement, but I aspire to find something transformational. For example, genetics is transformational.
Do you have an opinion about GMOs in food?
I’m not anti-GMO but also not pro-GMO. I’m pro-science and we need to use all the scientific tools we have, but I also abide by the precautionary principle: you don’t know if it is bad for you or not. The “horse is out of the barn” here — plenty of people are using GMOs now. It is not the GMO itself but the use of chemicals that are associated with GMOs. We need to be more judicious in our use of chemicals.
There is also the ethical, religious debate: Should we be playing with genetics of Earth’s organisms? There are social and legal issues; some of the GMO companies find a GMO crop and sue people if they did not buy the seed. There are many controversial components to this.
What is your opinion on the ethical side of this?
People say GMOs are “playing God,” but we do it all the time. I don’t have a problem with that on the moral stance, but it needs to be well-regulated and controlled.
What about the pushback against the use of GMOs in America?
No, it’s the opposite. Most of the crops are GMOs. People may not know this because they do not eat the soy and corn; they eat the animals that eat this. There is pushback but it is naïve pushback, from consumers’ perspective. Both corn and soybeans are GMOs. There is some legitimate scientific push back, but this is not in the consumer’s mind yet.
The real critical advancement today is CRISPR. This has extensive implications for GMOs and agriculture, but is still in development. We have to watch where that goes and again, science has to police itself while dealing with these issues.
Do you have an ethical stance on CRISPR and the implications for agriculture?
CRISPR will have the biggest implications because with this innovation we can make a custom anything. For example, custom-made sheep with blue wool — we can design the gene for it.
I am pro-science, but also pro-monitoring and managing. I don’t want to let science get the best of people. We need to use it wisely.
Where do you think the future of the meat industry is headed? Are you for the plant-based versions such as Impossible and Beyond Burger, or do you think lab grown meat will be more successful? Or none?
Again, I am not for or against anything, I do not operate on the “should,” I operate based on consumer demand. Should we have more plant-based protein? Yes, but will we? If consumers demand it.
How do we manipulate and drive consumer preferences to be more healthy, from a nutritional, and environmental, social equity perspective? We need innovation in product development. I do not think policy can incentivize change; it will be de facto policy.
What do you think is the most promising clean technology we currently have?
I’m not sure that there is anything transformational right now. In genetics, we have CRISPR; in finance, we have carbon market innovation; and in energy, we have carbon capture and sequestration.
I do not see any transformational technology today, but there are marginal efficiency improvements that can have a big impact. For example, how we manage food waste would really change supply and demand. However, this is a behavioral change at the individual and societal level; you need an economic incentive. If you drive up the price, then people are more likely to eat every carrot. Sixty percent of food is food waste; we would not need to produce much more if we managed our waste better, and that would affect the supply and demand curve terrifically.
What do you think about the amount of food that is wasted—is this a supply chain issue, can it be fixed?
This is a problem everywhere across the value chain: from production to harvest, to processing and manufacturing, to distribution. Each place needs to be addressed individually. There are plenty businesses trying to convert food waste into energy, compost, or fertilizers, and many business opportunities but this is incremental. Again, nothing transformational about it.
Is that what you are looking for, something transformational?
I operate in the marginal, but on the lookout for something transformational, yes. For example, the computer age was transformational, or the iPhone. It captured demand—one device that solved several demands.
Does your approach of looking at everything in the lens of the market come from your career?
Yes, but it is also derived from science and how ecosystems function and are structured. In ecology, there are stocks and flows, e.g. a pool of nitrogen flows through stream or becomes a tree. There are stocks and flows of nutrients, and energy and matter — this is how ecosystems function, and economics is built off that: moving in a cycle is how markets work.
The science to market is a full cycle; it is about the physics, classical mechanics. The base of attraction is what we are talking about: there is the demand for food, and you are solving the demand.
What in your upbringing made you want to pursue sustainability?
Economic hardship and need to sustain oneself. I didn’t come from wealth and wanted to be able to feed myself and the world. I wanted to be able to grow food. [And to impress girls — more on that later.]
Did you ever put sustainability into practice?
Yes, I grew crops in Africa, Australia, and Wisconsin, and did a master’s degree in aquaculture, growing tilapia and red claw crayfish. I also helped manage a sheep ranch in the Negev Desert and worked on dairy farms.
I do some gardening—no farm—but I’ve invested in agriculture farms and projects. Maybe one day.
…In case of the apocalypse?
Yes, it is the beginning of the apocalypse—it’s happening right now.
Why do you think so?
Nature has a way of correcting itself and it’s going to continue to cause problems for humans; this is an apocalypse for humans, not in general.
Why did you choose to study all these subjects when sustainability wasn’t a focal point of our society like it is now? Did you feel like it was relevant?
I always felt like it was relevant; it was about learning to grow food and sustainability, even though sustainability wasn’t popular in the 80s. Sustainability was the backdrop and the motivating factor. In an apocalyptic world, as you put it, what do you need? Food, water, and shelter—that is the core of sustainability.
Why was learning to grow food and sustainability so compelling to you?
It was about survival instinct. In undergrad, while working for a professor at the University of Connecticut, he introduced me to global hunger and environmental degradation, and I learned a lot about what was going on. He was a Peace Corps volunteer in 60s, and I went on to do the Peace Corps for four years in Cameroon, West Africa.
I didn’t know I wanted to do this before entering college. Initially I was interested in biology and pre-med, and took a turn to ecology.
Why did you want to teach finance and sustainability?
It helps me to learn and stay fresh; I stay excited because the students are excited. I enjoy teaching; it gives me energy to teach and to give back. It inspires me and I have to continue swimming upstream.
I also like to have a foot in the ivory tower—that’s where knowledge is, and I grew up thinking I would be part of academia but went into business instead.
Would you like to pursue academia further?
Sure, I would, but on the other hand like being involved in the action—but I could maybe teach full time.
In graduate school, I learned about participatory observation: I can’t understand the system from the outside, I need to be part of it. I like being part of the action: the transactions, the business. I don’t want to just study it from abroad and then teach it to students.
What would you tell someone starting a career in sustainability? Should we have hope?
Yes, absolutely, hope and purpose. And we are on a mission.
An extra lesson from Kahn on impressing girls with sustainability:
I chose to pursue sustainability [in part] because I wanted to impress girls. I learned botany, and could identify all the plants and trees and could impress girls on walks. Sustainability helped along the way with a lot of them. (He eventually met his wife this way.)
I felt like Indiana Jones: a swash-buckling volunteer in Sub-Saharan Africa, and then I was in the desert with a flock of sheep and wore galabia. These were adventures, and Hollywood-esque things would impress girls. Indiana Jones was more important in my time than money, but I also needed to make a living. Now I have a house in the suburbs, my kids are at school, and I pay a mortgage; so, I’m still doing the same thing but from a computer now.
Sarah Hussain is a sustainability management student at Columbia University.