08 Jan 2016
Investing in Sustainability
Helping consumers and entrepreneurs understand the connection between food and fuelby April WhiteTopics:
Photos by Benoit Cortet
Nicholas Tiller (MBA 1998) grew up Springfield, Ohio, a farming community where 4-H was founded, and many of his classmates were in FFA, the Future Farmers of America. Yet Tiller’s education in agriculture and energy—and the ways in which the two issues are linked—came much later, as an analyst at Fidelity and a portfolio manager at SAC Capital.
“I spent 15 years researching and trading in the food and energy space,” says Tiller. “In the course of doing my research, I developed views not just on what was going to happen in the space, but also about what should happen, about how things could be done better. That’s definitely outside of your purview as a portfolio manager.”
Tiller saw a need to diversify away from oil, not in 50 or 100 years, but right now, for the sake of the environment and national security. He also recognized the necessity of increased food production to feed the rapidly growing world population, expected to reach 9 billion in the next three decades. So in 2013, at the age of 41, Tiller retired from hedge-fund management to establish Sustainable America, an ambitious nonprofit with the dual aims of reducing US oil consumption while increasing the country’s food supply. Sustainable America takes a two-pronged approach to these issues: education and investment.
Sustainable America’s education initiatives are typical of the approach taken by many nonprofits, with a Buzzfeed spin. The organization uses quick quizzes, animated videos, and shareable infographics to illustrate startling statistics: 40 percent of the food produced in the United States is never eaten; and 3.8 million gallons of fuel are wasted every day from unnecessary idling. Such initiatives suggest seemingly simple solutions—for example, use leftovers and turn off the car—but with collective action, these small changes could have a big impact, Tiller says. The organization also wants consumers to understand the connection between food and fuel: nearly 50 percent of the country’s corn crop is turned into ethanol, and 10 percent of the nation’s energy is used to produce food.
Less typical among nonprofits is Sustainable America’s investment philosophy. The organization makes direct investments in new technologies that reduce the demand for oil and increase the food supply. Tiller is a fervent proponent of this type of “impact investing,” a relatively new—and increasingly popular—model for doing good and making money. As a venture capitalist nonprofit, Sustainable America is funding entrepreneurs who will make the food and fuel sectors more sustainable and anticipating returns that will make the organization sustainable.
Sustainable America has invested in companies such as AeroFarms, an indoor growing system that uses aerosolized nutrients to grow food without soil; the Conservation Capital Fund, which finances free-range cattle operations; and eNow, which produces solar panels to be installed on long-haul trucks to reduce fuel use. “Charities should be investing in ways that align with their mission,” says the former hedge-fund investor. “In that way, they can get both good returns and further their goals.”
Tiller knows that his goals of changing the food and fuel sectors aren’t short-term objectives. Although he didn’t grow up on a farm, he owns one now: 650 acres in his hometown of Springfield. “We currently just grow corn and soy,” he says ruefully. “I’m investigating what it would take to turn it into something more organic. It’s going take some time.”
Class of MBA 1998, Section E