Climate Risk, Financial Returns - Ep112: Bob Litterman

This week on Cleaning Up, Michael hosts Bob Litterman, founding partner at Kepos Capital and Chairman of the Kepos Capital Risk Committee. Litterman spent 23 years at Goldman Sachs, during which time he became a partner and established himself as an outstanding authority on financial risk. Since co-founding Kepos and joining the boards of the World Wildlife Fund, Ceres and the Climate Leadership Council, among others, he has become a leading voice on climate policy and risk as it relates to climate change and the transition. From this unique vantage, Litterman is acutely aware of the time-sensitivity of climate risk: “We have to create incentives globally to reduce emissions, and we have to do it very quickly. One thing I like to tell people is when you're managing risk, time is a scarce resource. If we have enough time, we can solve almost anything. When you're managing risk and you run out of time, a risk management problem becomes a catastrophe.”Guest Bio: Prior to founding Kepos Capital, Litterman had a 23-year career at Goldman, Sachs & Co., where he served in research, risk management, investments and thought leadership roles. Litterman became a partner at Goldman Sachs and head of the firm-wide risk function in 1994, and head of the Quantitative Resources Group in 1998. Litterman is the co-developer of the Black-Litterman Global Asset Allocation Model, a key tool in investment management.Litterman serves on a number of boards, including the Niskanen Centre, Ceres, World Wildlife Fund, and the Climate Leadership Council, where he serves as co-chair of the Board. Litterman also chairs the CFTC Climate-Related Market Risk Subcommittee, which published its report, Managing Climate Risk in the U.S. Financial System in September 2020. Litterman holds a Ph.D in Economics from the University of Minnesota, and a B.S. in Human Biology from Stanford University. Prior to Goldman Sachs, Litterman taught at MIT and worked at the Federal Reserve Bank of Minneapolis.View: Relevant Guest & Topic Links:Read Managing Climate Risk in the US Financial System: CLICK HEREFind out more about Kepos Capital: CLICK HEREWatch: Related Episodes:Cleaning Up Episode 49 with Johan Rockstrom: CLICK HERECleaning Up Episode 48 with Nick Stern: CLICK HERECleaning Up Episode 109 with Dipender Saluja and Ion Yadigaroglu: CLICK HERE