Meet our experts: Mary Cerulli
Mary Cerulli is the founder of Climate Finance Action, established on May 6, 2020, following 18 months of dedicated climate finance work. Her efforts were in conjunction with an investor-led campaign initiated by former New York City Comptroller Scott Stringer, aimed at decarbonizing the 20 largest electric generating utilities in North America.
Mary holds an MBA from Boston University and a BA in Geology from Skidmore College. She completed the ESG: Navigating the Board’s Role course at the University of California, Berkeley Law/Ceres.
Before transitioning to the nonprofit sector, Mary accumulated over twenty years of experience as an analyst and consultant in the financial services industry. She began her career at a subsidiary of New York Life, creating tax-advantaged packaged products in oil, gas, and real estate. Mary later co-founded Cerulli Associates, Inc., where she focused on retail distribution dynamics, packaged products, and retirement markets. She authored reports on the wealth management industry, high-net-worth market, and the annuity industry, and worked on client projects involving emerging manager expansion strategies and independent registered investment advisors (RIAs).
Mary now leverages her financial sector experience to research and decode financial information, empowering advocates to conduct effective campaigns that push the financial sector to address the climate crisis. She serves on the ESG Committee of the Massachusetts Pension Reserves Investment Management Board.
Can you elaborate on how incorporating climate change considerations into pension funds investments affects long term retirement security for the beneficiaries? Are there any potential trade offs or concerns that need to be addressed?
First, In terms of beneficiaries, the largest group typically comprises union workers, who are essential to our states and cities. These workers, who include members of the National Education Association, the American Federation of Teachers, the Service Employees International Union, and other federal unions, highly value a dignified retirement. Their retirement benefits are a critical component of their compensation for public service, and any threats to these benefits are a major concern, especially given the long history of attacks on public state pension plans.
While climate change might not be the top priority for these workers, its impact is becoming increasingly apparent due to the rise in physical disasters like wildfires, sea level rise, hurricanes, and storms. However, there is also significant resistance to integrating environmental and social risks into pension plans, especially from conservative states opposing what they perceive as “woke capitalism.” This resistance has led to over 200 proposed legislative bills, which have constrained innovative approaches within pension plans in the U.S.
To address these challenges, we need to treat climate risk as part of the broader risk management framework of pension funds. This approach helps depoliticize the issue and focuses on the necessity of accounting for climate-related risks, which have become more volatile and unpredictable, much like the economic disruptions caused by events such as COVID-19. Climate risks are now a critical consideration for the stability and sustainability of our economy.
Our strategy has been to integrate climate risk into the risk management processes of pension funds, presenting it as another essential factor to ensure the long-term security of retirement benefits. This approach has proven successful in several instances, despite the complex and constrained legislative environment. This is annoying because it highlights a disconnect that needs to be addressed. We need political will and public opinion to connect the dots between our bankruptcy system, ESG disclosure system, and corporate governance system, which currently operate in isolation. It will be interesting to see how the politics of bailing out these companies plays out when it happens, and hopefully, it will lead to significant reforms.