Chad Spitler (BS ’92) is most widely known for his game-changing role at BlackRock, the world's largest asset management corporation. As a Managing Director, Spitler helped to establish what are now BlackRock’s Investment Stewardship and Sustainable Investing teams. The work of Spitler and his team facilitated billions of dollars of capital into sustainable investment products and hundreds of public companies to integrate long-term thinking into their business strategies as a result of the team’s engagement and voting activities.  

After 15 years at BlackRock, and three years as Chief Operating Officer and partner at the boutique advisory firm, CamberView, Spitler founded his own advisory firm in 2018. His firm, Third Economy, assists clients in building sustainable investment portfolios, sustainable institutions, and ultimately, a sustainable economy.  

Spitler speaks both publicly and privately with regulators, policy makers, non-profits, academics and the largest global companies and investors, to further the field of sustainable investing and transition the capital markets to a lower carbon economy.  

 Spitler is a member of the SEAS External Advisory Board. We spoke to him on his visit to Ann Arbor where he moderated the “Financing a Sustainable Future” panel, an event hosted by the Erb Institute at the Ross School of Business.  

Are you encouraged by the response of the market toward sustainable investments?   

I think there is a trend towards companies thinking about sustainability because investors are demanding it. At Third Economy, we advise companies on how to become more sustainable by applying our investment expertise. The same concepts that investors use in analyzing how sustainable an investment is can be applied to corporations to help them become more sustainable. You may have recently heard that BlackRock came out with their commitment to sustainability. They are one of many important managers, but a very important one because of how large they are.     

One thing, though, that is confusing in the market right now is that “sustainability,” as it relates to corporations, means many different things. You have environmental sustainability, but you also have long-term financial sustainability. So, it's important—if you're on the receiving end of corporate information—to understand which of those two references to sustainability they are talking about.  

You had a significant impact at BlackRock, and were very instrumental in moving them into a more sustainable direction. Can you talk about that?  

I had a great run at BlackRock. I spent 15 years there. I built and wrote the strategy to found the team that I ultimately ended up being a leader of, and we saw our responsibilities evolve over time as the market evolved its thinking.   

We started with a focus on proxy voting and how, as a responsible owner of all these securities, we had a responsibility not only to our clients, but to the market and to the business community to become more transparent about how we assessed companies that we were a shareholder in from a governance perspective. Next, we aimed for Environmental, Social, and Governance (ESG) integration into the investment process. This meant we had to train the team of investment professionals on the environmental and social aspects of financial sustainability—which, for them, represented a new way of thinking. It was a real cultural shift. 

What do you see as the greatest challenges to creating a more sustainable future—from an economic perspective?  

I think the biggest challenge is that most investment capital is held in big pools of retirement funds, but we’re not thinking about how that capital is being put to work. Most of us aren't even aware of what kinds of investment products our portfolios are invested in, let alone are we aware of the impacts that those investments are having in the world. So, there's a disconnect between all of us and how our money is being put to use.   

For example, right now, 97 percent of the biggest bulk of capital is not invested sustainably because it's not even offered to us as an option. To build a grassroots effort, all of us have to ask our plan administrators to provide sustainable investment options in our retirement plans. That’s why we really need to bring the knowledge to individuals, and give them the tools that will empower them with the information to make decisions. 

What advice can you offer to individuals that may be hesitant to shift their investments from so-called “traditional funds” to more sustainability-focused options?   

One of the biggest fears about investing sustainably is that you're going to make less money. Well, that's not the case. There are plenty of sustainable investments in which you can make just as much money as you would investing in things that are really bad for the world. So, do you care about the environment? Do you care about building healthy communities? Do you care about gender equality? If you do, then why wouldn't you invest in things that have those kinds of impacts on the world?   

What role can your firm, Third Economy, play in creating a sustainable economy? 

The objective of Third Economy is to build a sustainable economy by moving capital, and to do that we have a three-step plan: rate, research, and advise. The first plan involves rating investment products for their sustainability. We make that rating publicly available, so that it's a kind of “Consumer Reports” of the investment fund industry. Another way to think about it is that it is like the “FICA” of sustainable investing. In the second part of our plan, we produce research that is derived from that rating. Finally, we use our rating and our research to advise institutional investors primarily on how to use that to build more sustainable investment portfolios.  

Do you have any words of inspiration for current students at SEAS?  

Don't necessarily approach your education from what kind of job you want to get. Approach it from what you are passionate about and what you care about. You spend a lot of time working, and if you're not working on something that you're passionate about, then that's not a really good way to spend your day. So, I would advise people to think about what gets them excited, what motivates them, what gets them worked up, or passionate, and study those things. From there you can figure out what that means in terms of what kind of job you can get.     

The kind of job that I have didn't exist when I was in school. And so, I had to study what I was genuinely interested in from an academic perspective. Consequently, I came into investing with a nontraditional approach: with a natural resource management perspective through SEAS, and from a cultural anthropology perspective—as I was really interested in understanding human behavior around the economy.  

I think that is what differentiated me as an investment analyst; I didn't have the traditional MBA at the time, and I thought about investments through a different lens, a different paradigm. Sometimes it can be harder coming at things from out-of-the box because you have to prove why you're a good candidate. But in my case, it set me apart. And ultimately, being a passionate environmentalist is what made me such a strong investor.