Bill Green: Rethinking Infrastructure Investing for a Changing Climate

Summary

The Sustainability Story: Bill Green – Rethinking Infrastructure Investing for a Changing Climate

Podcast: The Sustainability Story (CFA Institute)
Episode Date: October 7, 2025
Guest: Bill Green, Managing Partner, Climate Adaptive Infrastructure
Host: Deborah Kidd

Episode Overview

In this episode, host Deborah Kidd talks with Bill Green, founder of Climate Adaptive Infrastructure (CAI), about the complex intersection of infrastructure investing and climate change. With decades of experience in sustainable investing and infrastructure, Bill shares insights into how the climate crisis is reshaping both investment strategies and the definition of resilient infrastructure. The conversation covers the unique vulnerabilities of infrastructure assets to climate risk, why these risks are often mispriced, the economic benefits of adaptive approaches, emerging trends, and the need for better disclosure standards.

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Defining Infrastructure in a Changing Climate

[03:16]

• Infrastructure Categories: Bill breaks down infrastructure into four main categories:
  1. Energy (all forms)
  2. Water and wastewater
  3. Urban and suburban infrastructure (including transport and data centers)
  4. Food, agriculture, and timber
• CAI’s Focus: Concentrates on the first three of these categories.

“Infrastructure is an all-encompassing category that effectively has four components or four legs to this table... Here at CAI we address the first three.”
— Bill Green [03:16]

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The Origin Story: “We Continue to Build Infrastructure for a Planet That No Longer Exists”

[04:19]

• Permanent Nature of Infrastructure: Bill emphasizes that traditional infrastructure—because it is permanent, contracted, and long-dated—faces outsized risks from climate change.
• Misalignment: Much existing and new infrastructure is still sited and designed for outdated climate assumptions.
• Illustrative Example: Assets like toll roads built below sea level are now at major risk from "sunny day flooding" due to sea level rise, but cannot easily be adapted once built.

“If you build a toll road... below sea level along the coast, and you now have 100 days of sunny day flooding, you can't move that road. That toll road doesn't become an airport or a solar farm. It is what it is.”
— Bill Green [05:25]

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Rethinking Risk: The “Triple Threat” Approach

[10:03]

• CAI’s Additional Climate Screen: Beyond traditional metrics like credit or leverage, CAI applies special climate screens:
  • Physical Risk: Damage from extreme weather events (floods, hail, fires, etc.)
  • Regulatory Risk: Risks arising from current laws (wetlands, habitat protection)
  • Political Risk: Anticipating regulatory or policy changes not yet enacted
• All Three are Critical: Initially, investors focused just on physical risks, but focus shifts over time as regulatory and political contexts evolve.

“We call it the triple threat risk... physical, regulatory, and political risk.”
— Bill Green [10:07]

“The three risks are always present and must always be considered. But in the moment, one seems more pressing than the other.”
— Bill Green [11:23]

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Enhancing Resilience: Practical Examples

[07:19]

• More Than Traditional vs New Builds: The key is in enhanced due diligence—not changing the asset but upgrading risk reviews.
  • Case in Point: Solar farms now face larger, more destructive hail due to climate change. A climate-adaptive approach includes forecasting storms and moving solar panels vertically to minimize damage.
• Goal: Make traditional infrastructure more resilient, not just “greenwashed.”

“It's the same solar farm. We've just asked a set of questions that goes beyond what may heretofore have been the norm for due diligence and screening.”
— Bill Green [08:59]

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The Economics of Climate Adaptive Infrastructure

[13:00]

• Returns First: CAI’s approach is not concessionary. The focus is maximizing returns by reducing risk and capitalizing on inevitable climate transitions.
• Inevitabilities Trump Rhetoric: Regardless of political shifts, certain climate trends—rising temperatures, increased drought—are mathematically inevitable and have direct investment implications.

“Nothing that we do at CAI is concessionary. We never ask or consider a trade-off between doing well and doing good.”
— Bill Green [13:19]

“The inevitabilities of the climate crisis are our inevitabilities... As parents or grandparents, we may not like the inevitabilities... but they are nevertheless inevitabilities.”
— Bill Green [13:56]

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Emerging Priorities & Trends

[16:34]

• Top Opportunities Today:
  1. Water Infrastructure as a Service: Many industries (semiconductors, data centers) depend on access to highly treated water but aren’t water specialists; CAI owns the treatment systems and supplies water as a service.
  2. Data Centers & Energy Siting: The explosion in data means data centers are now sited where renewable electricity is abundant (e.g., Texas) rather than just near population hubs, eliminating some transmission constraints.
• Trend: Infrastructure loads will increasingly shift toward sources of generation, not just points of demand.

“So the whole idea of moving load, be it data load, be it manufacturing load to generation, is going to be another theme that we think is going to be quite critical.”
— Bill Green [19:51]

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The Challenge of Disclosures and Standards

[22:09]

• Dizzying Standards: There are numerous, often inconsistent, reporting standards (EU taxonomy/SFDR, PRI, etc.), and clients may demand conformance to different ones.
• Complexity in Measurement: Even questions that sound simple—like, “How much CO₂ does your solar plant remove?”—can be almost impossible to answer accurately due to shifting energy sources on the grid.
• What’s Needed: More logical, answerable, and comparable metrics to help investors make sound decisions.

“What seems like an honest, but perhaps simplified question... is really an almost unanswerable question.”
— Bill Green [24:10]

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Tone of Optimism Amid Challenge

[25:49]

• Optimism Grounded in Action: Investing in adaptation and mitigation offers tangible, rewarding ways to address climate realities.
• Navigating “Split-Screen Reality”: The broader information landscape may be confusing or discouraging, but investment anchored in climate facts is both logical and hopeful.

“The knowledge of these inevitabilities is... not always pleasant... but when you think about taking action and making investments in the face of these known inevitabilities, it's a lot more rewarding than you might think.”
— Bill Green [25:53]

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Notable Quotes:

• “We continue to build infrastructure for a planet that no longer exists.” — Bill Green [03:56]
• “All three of these risk categories matter equally. So there are many, many ways that we can also address the risks of the climate crisis, but make investments that are not only sustainable, but... quite profitable at the same time.” — Bill Green [11:43]
• “The inevitabilities are what we as allocators, investors and other members of CFA have to focus on. Because that's like the math on the page. Those are the unchanging numbers.” — Bill Green [15:40]
• “If you anchor into the inevitabilities of the work that we're doing... this is addressing inevitabilities, earning investors the kinds of returns that they would like, and at the same time really sort of helping us get out of bed day after day to continue to do this work.” — Bill Green [26:24]

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Key Timestamps

| Timestamp | Topic | |---------------|---------------------------------------------------------------| | 01:05 | Bill’s personal sustainability journey | | 03:16 | What infrastructure means at CAI | | 04:19 | “We continue to build infrastructure for a planet that no longer exists”—explained | | 07:19 | Climate-adaptive investment approach | | 10:03 | The “triple threat” of physical, regulatory, political risk | | 13:00 | Economics and inevitabilities of climate risk | | 16:34 | Trends: water infrastructure, data center siting | | 22:09 | Challenges with disclosures and standards | | 25:49 | Optimism and the case for action |

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Summary

Bill Green’s perspective brings home the critical need to reframe infrastructure investment by incorporating rigorous, climate-forward analysis. He makes a compelling case—with data, stories, and optimism—for balancing profit and sustainability, insisting that climate resiliency is not just good stewardship, but also good business. For asset owners and investors navigating an uncertain future, integrating climate risks may be the difference between stranded assets and long-term opportunity.

Transcript

[A]

Foreign welcome to the Sustainability Story. I'm Debra Kidd, your host for today's episode. Today we'll be talking about the intersection of climate change and infrastructure and why it's critical to understand the impact of climate change on infrastructure and why that climate risk is often mispriced or overlooked by investors. My guest is Bill Greene, Managing partner of Climate Adaptive Infrastructure. Bill founded Climate adaptive infrastructure in 2019 after nearly 10 years with Macquarie as CEO of the group's renewable energy holdings. Bill, thank you for joining us today. Before we dive into our topic, we always like to hear the sustainability story of our guests. So I ask you, what led you to your career in sustainability and specifically what prompted you to found Climate Adaptive Infrastructure?

[B]

Thanks for the opportunity to work with you and speak a bit to your audience. I've been doing this work for my entire life, so I guess longer than even I remember at this point. I've been involved in some form of sustainability decarbonization. And it goes of course by many names. I founded four companies in this space, including EchoLink, which was the first company ever to produce alternatives to chlorofluorocarbons in the late 80s, early 90s. You may remember those as the ozone depleting solvents and chemicals. I then co founded what became one of the largest private equity practices in what at that time we called clean tech here in Silicon Valley. Then, as you said, I spent 10 years as a senior managing director at Macquarie bank, involved in their renewable energy effort and ultimately founding MIC Renewable Energy Holdings. And that's where the ideas that we'll talk about today really took shape and where I learned about the opportunities and the risks facing infrastructure in terms of sort of what spurred us to create CAI and do the work that we do today. We learned over the years a lot about infrastructure investments, why infrastructure investing is attractive and is the subsector that it is today for investors. But we also learned about some very unique risks and opportunities facing this asset class. And while the risks of the climate crisis impact every asset class, whether it's public securities or venture capital or infrastructure or debt or anything else, infrastructure was particularly vulnerable and impacted. And that's what led us to sort of take the journey that we've been on now for the last almost six years.

[A]

Well, first let's define what you mean by infrastructure, just so our audience is clear. And then I want to go back to something you just said, but are we talking roads, bridges, buildings, power plants and cities?

[B]

That's a great question. Infrastructure is an all encompassing category that effectively has Four components or four legs to this table. One is energy in all its forms. Another is water and wastewater, water processing. A third is urban and suburban infrastructure, which includes transport. Data centers would fall into that category. And the fourth is food, agriculture and timber. And here at CAI we address the first three. But those four components make up what we broadly define as infrastructure.

[A]

All right, well, thanks for clarifying that for us. So I want to start with a quote from you where you said at one time, we continue to build infrastructure for a planet that no longer exists. I thought that was a very powerful quote and maybe you can tell our audience what you mean by that.

[B]

Yeah, thank you. Well, it arose as part of our origin story and after the things that I'd learned after working in traditional infrastructure banking and investment over the 10 years that I mentioned earlier, and we were intending to be a bit pejorative with that statement and get people to understand, as I mentioned a moment ago, these unique attributes of infrastructure. So why don't I explain that a little bit more to you. Now, infrastructure is permanent, one of the many things we like about infrastructure investments. These are assets. They tend to be permanent, contracted, long dated. They're therefore not inflation correlated. So when an allocator of capital thinks about asset classes, infrastructure is quite often high on the list because of its attributes. But here's the catch. Because these are permanent, long dated assets, they are at extreme risk of the triple threat changes taking place around us as a result of the climate crisis. And we can talk more about the triple threat later. So let me elucidate this for you. If you have a company like Uber and you decide to sell food, well, you just change the webpage and voila, you are Uber eats. But if you build a toll road, metaphorically speaking, below sea level along the coast, and you now have 100 days of sunny day flooding, you can't move that road. That toll road doesn't become an airport or a solar farm. It is what it is. So what we began to do is ask questions about the long term insights and impacts that we could foresee around these permanent assets. In fact, it started a bit naively. We said, well, does it make sense to build that metaphorical toll road in that place? Or is there a chance that over the next 10, 20, 30 years the climate crisis could change the impact and reality of the business of that asset? And this is true now in so many ways, as the climate crisis reshapes our built environment and the impacts around it. Hence the statement, we are building infrastructure for a planet that no longer exists.

[A]

So when you are looking at an investment, how are you differentiating between an infrastructure investment that is a traditional build type investment, or versus an infrastructure investment that can withstand the effects of climate change in that particular region, as you can best estimate?

[B]

So here's the cool thing about what we do. This is not an either or conversation. We're looking at traditional infrastructure assets. All we're doing to boil it down is asking an additional set of questions, applying these CAI climate screens to those assets. So the same way we would look at an investment of any kind and say, what is the credit risk of the counterparty? How much leverage is on that investment and how much leverage is safe? What is the debt service coverage ratio? And on and on all of the traditional metrics, as I say them, your financial audience is nodding. Yes, we ask that. Yes, we ask that. We also then ask, what will be the impact of physical change? What will be the impact of political change relative to the climate crisis? Will these assets be resilient? Here's an example. We've been building solar farms all over the world for many, many years. So when you build a solar farm now in places that are prone to what we call technically convective storms, which is simply a fancy way to say hail, what's happening as a result of the changing climate is that hail has gone from being pea shaped, which is annoying, but not terribly dangerous, to golf ball size. Well, when golf ball size hail falls out of the sky, it damages solar modules. So heretofore one would build a solar farm and say we're creating renewable energy. This is all good, but without asking the right climate adaptive questions, the solar farm is built without the ability to forecast the weather, see the storms coming, and then stow those modules in a full vertical position until the storm passes to ensure minimum damage from these new very destructive convective storms. Just a simple example to say it's the same solar farm. We've just asked a set of questions that goes beyond what may heretofore have been the norm for due diligence and screening. So the assets that we invest in and that others invest in that are called climate adaptive infrastructure are the very same assets. They're just more resilient as a result of our approach.

[A]

So you mentioned a couple specific risks. You mentioned physical risk, and you mentioned, is it political risk? Can you talk about those specific risks?

[B]

Yes, absolutely. So we are keen on inventing terms for things that don't otherwise have a name, and we call it the triple threat risk. When we started the firm and we, we named these three risks physical risk, regulatory risk, and political risk. And here's what it means. When we began speaking to people about climate impacts and infrastructure, everyone wanted to talk about physical risks. Oh, they would say, I understand. I remember Hurricane Katrina and the flooding or Superstorm Sandy, or I remember the fires in Napa or California, what have you. All physical risks, all very real, but only one third of the risk spectrum that must be considered or for which we at CAI have developed these screens. The other two, regulatory and political, are different in the following sense. Regulatory risk defines risks that are on the books today. Things that we can look at from a regulatory standpoint, such as wetlands prevention, wildlife mitigation, habitat, things like that. There are laws on the books today, local, state, federal, that define those, and we call those regulatory risks. And then finally, there is political risk, different only from regulatory risk in that political risk is when we try to look around the corner to see what's coming and may not be on the books today. But funny story, when we started this, as I said, all anyone wanted to talk about was physical risk. Guess what? Today, all they want to talk about is political risk, which is sort of emblematic of how these three risks are like a sine wave. The three risks are always present and must always be considered. But in the moment, one seems more pressing than the other. And today, for reasons we all know, political risk seems to be what's on everybody's mind. But all three of these risk categories matter equally. So there are many, many ways that we can also address the risks of the climate crisis, but make investments that are not only sustainable, but, but that are quite profitable at the same time. And hopefully we can leave some time to get into that later on.

[A]

Yeah, let's actually talk about that, because I know you have said that although you work in a sustainable field, that your primary focus is on the economics of your investments. And I know you've also said that mispricing is quite widespread in the infrastructure field. So I'd love to hear more about the economic benefits that you find both in the current environment and maybe looking ahead a few years, that are compelling.

[B]

Yeah, for sure. So what's really interesting is that we began talking about climate, adaptive infrastructure and these additional climate screens, simply in the context of reducing risk and increasing opportunity and making investors better returns. And I think all of the CFA audience will really get that the better we manage risk, the more money we can make. Nothing that we do at CAI is concessionary. We never ask or consider a trade off between doing well and doing good. Everything here is primarily around how do we maximize returns for our investors. So how does it work? Look, basically, there are a multitude of ways that we can invest capital today and earn returns in the infrastructure arena. The energy transition. While it may not be so politically correct to call it that any longer, and certainly terms as we used to use, like responsible investing in esg, may even be more politically in question, the fact is we are dealing here as investors with a set of inevitabilities. And I would assume that most of the CFA audience are quite numeric. If I write down a set of numbers on a page, those numbers are not open to interpretation. Math is math. And the inevitabilities of the climate crisis are our inevitabilities. As parents or grandparents, we may not like the inevitabilities. We may not be able as humans to fully wrap our minds around the time frames, but they are nevertheless inevitabilities. What are they? It is getting hotter. It is getting drier. These two inevitabilities drive a myriad of physical outcomes on this planet that all investors must be aware of. If it's drier, there will be more fires. If it's drier, it's harder to grow food. If it's drier, the seven states that depend on the Colorado river won't be able to access that water the same way. Now let's put our business person's hat on. Data centers used to be considered a real estate investment. Four walls, cap rate tenants. Now everyone knows that they are climate adaptive infrastructure because 80% of what they sell is electricity and the other 20% is water. You can't build a data center without power and water today. So this changes how we think about those investments. And the inevitabilities that I mentioned are the circumstances are facts that are really untinged by political rhetoric. It doesn't matter that the current US administration says this or says that. It does not change the inevitabilities. It may distract people, it may depress people. But the inevitabilities are what we as allocators, investors and other members of CFA have to focus on. Because that's like the math on the page. Those are the unchanging numbers.

[A]

Is there a particular focus or trend that you see emerging that's going to be the dominant need over the next five to 10 years for this climate adaptive infrastructure? Is it water? Is it low carbon? Is there not a dominant one? And they all have to be considered with equal importance?

[B]

Well, you threw me a curveball at the end of your question. There are dominant ones, but they all have to be considered with equal importance. I think, kidding aside, I think the, I think the question could be reframed as what is the priority here? Right? What is our order of operation? Or where do the greatest opportunities to invest and earn good returns and, and, and address these issues at the same time? So there's a long list, but they're not all mature at the same time. I would say the most pressing handful today include the following. First of all, we see tremendous opportunity and have been investing in what we would call water infrastructure as a service. And what this simply means is that there are three or four kinds of businesses that depend on water but are not central to water. So their main business is not water. And examples are the semiconductor industry. They etch ever smaller lines on little bits of silicon, but they demand a certain amount of very clean water and then treat all of these heavy metal laden water streams after production. So they rely on water, but it's not core to what they do. Another example are data centers. They host computer servers, but they rely on water quite often for cooling. So water important but not core. So here's what's happening. These businesses are sensitive to things like pfas and other contaminants. They need water provided to them at a quality and speed and cost, but they don't want to manage it. Managing water today is complicated. Getting it into a plant, getting it out of a plant, treating it, zero liquid discharge, meaning you reuse the same water again and again. So what we do is we partner with some of the largest water companies in the world, Veolia, others like that. They build for us the water treatment systems. We own them and we lease the water to the tenants, the data center, the semiconductor company. So what we effectively do is we turn a capex. They would have had to build that water treatment plant and run it and risk the liabilities of doing so. So you will see more and more of that in the infrastructure industry. People who are not core but rely on a certain type of infrastructure related to that. Another huge demand, which I think is probably more familiar to most people, is this whole story around data centers. Now we all know there's an explosion of use of data if it's actually not limited to AI, although that is a factor. But how many times have you seen someone say, I think I'll give up my cell phone and iPad? So we're in this explosion of data, capturing photos, videos and all the rest. These data centers rely on energy and the way this used to be done is the Big data consumers, Google, Apple, Amazon, so forth, would say, I would like a data center to be in City X, because that's where I am and that's where my people are. Please build it for me there. But it's now become apparent that this load, this demand for energy can cannot be cited where you might like it to be. But instead, the trends now emerge that says the load, the demand for the electricity, has to move to where the energy is. So one of our portfolio companies called Intersect Power has pioneered this quite effectively building gigawatt scale. Gigawatt scale. These are gigantic renewable energy facilities in places with a lot of renewable energy, sun and wind, primarily Texas, for example. And then the data centers move there, bringing the load to generation and eliminating the need for transmission, which in this country is very, very limited and quite constrained. So the whole idea of moving load, be it data load, be it manufacturing load to generation, is going to be another theme that we think is going to be quite critical. That has already become quite critical.

[A]

In fact, I want to change direction just for a minute here. And I want to bring up a comment you had made in another interview on standards and disclosures. So obviously, we at CFA Institute have a strong belief that standardized disclosures and consistent sets of information are very helpful to investors when making decisions about where to place their money. So you've commented in the past about how it's difficult for investors to compare investments in this infrastructure environment because there is no set of consistent disclosures or standardized disclosures from asset owners or in RFPs. So investors end up with kind of, I would imagine, kind of a hodgepodge of information trying to compare all of that. I just want to get a little more of your experience with that and your thoughts on what might be helpful in the future for investors who are considering making infrastructure investments.

[B]

Sure. It's actually a little more complicated than you've laid it out. And the reason is there are standards. There are various standards and bodies in Europe. For example, the European Union has something called EU taxonomy or sfdr, and funds or investors can claim a level of sustainability, level 8, level 9. CAI happens to report to the highest standard under the EU taxonomy, level 9. But there are standards that exist. So here's where it becomes complicated. We are routinely asked, as are many other managers, to respond to various standards that are not correlated with one another. The second layer of the problem is that even these standards, like pri, which is one you and your listeners may have heard of, continues to evolve. And now there are questions like, well, should natural gas actually be Considered a bridge fuel to a low carbon future. Should nuclear be something that we embrace? Because on the one hand there is toxic waste and on the other hand it is a zero carbon source of energy. So these standards are constantly being questioned when they become popular. Because of their popularity, many users with different agendas will then question and attempt to to move them. So these standards become really complex. And then each of your investors may come to you with a different set of standards and say, please report to these. What advice could I offer? Look, this is not a simple issue and we're not going to solve this in the podcast. Let me give you one quick example. We are often asked about our solar investments. Well, how much CO2 emissions are, does that solar farm remove? Seems a pretty interesting and honest question. Right? But the problem is it's unanswerable because that solar plant sits on a place in the grid, let's say in the state of California. If the solar plant weren't there, the electricity would come from various places in the state and out of the state. At one part of the day, it might come from other solar plants. So the answer is the solar plant we built for that part of the day really doesn't remove any CO2. It just adds more CO2 free electricity. But at a different time of day, the state may be importing power from another state that burns coal, or they may be using power from a natural gas plant. So throughout the day, the benefit of having our new solar farm in place is changes based on a time of use pattern. Now, I've just introduced a level of detail and complexity that is actually immeasurable. So what seems like an honest, but perhaps simplified question. Hey, good deal. You built a gigawatt solar plant, that's really big. How much CO2 does it take off the grid in California is really an almost unanswerable question. So what we need to do is ask one another questions that can be logically answered and addressed and then be measured against one another as we look at different opportunities. So it's a challenge and it's a problem that many are working to solve. And I think simplification of standards is a big part of the answer.

[A]

We have a few minutes left. I usually ask, but I did not ask. Is there any question that I didn't ask you that I should have asked or you would like me to have asked?

[B]

Yeah, quite often I'm asked if I'm optimistic, and I will tell you that I am. The knowledge of these inevitabilities is, as I mentioned earlier, not always pleasant, the fact that we are living on a planet that is getting hotter, that is becoming drier. But when you think about taking action and making investments in the face of these known inevitabilities, it's a lot more rewarding than you might think. And I will also say that the current moment is requiring us to live in a split screen reality where on the one hand we're hearing things, we're seeing things in our feeds and they make us wonder or doubt the judgment that we have around certain work that we do, certainly those of us who in the climate and sustainability space. But I would tell you that if you, if you anchor into the inevitabilities of the work that we're doing, providing clean water for decades to come for large populations, providing clean electricity to power the AI revolution, this is addressing inevitabilities, earning investors the kinds of returns that they would like from investments like this and at the same time really sort of helping us get out of bed day after day to continue to do this work. So we really appreciate your support for letting us get that message of optimism out to folks.

[A]

Well, thank you for that. That was very interesting and informative. And Bill, thank you for joining us today on the sustainability story. This has been a great convers.