Female Founders in Climate Series
An Interview with Alex Wright-Gladstein, CEO of Sphere
For our third feature, we interviewed Alex Wright-Gladstein of Sphere. Sphere is on a mission to help green your retirement investments. Read on for Alex’s story.
By GreenPortfolio Team
March 28, 2023
Have you thought much about what your 401(k) is supporting? Alex Wright-Gladstein certainly has. Alex founded Sphere because she struggled to find climate-friendly retirement offerings for her own employees at her first company.
Turns out, it’s a complicated – but important – issue. Over 80% of Americans are worried about climate change, but 99% of Americans don’t have the option to make climate-friendly investments. Sphere makes climate-friendly investing available to everyone, by making it easy for employers to offer climate-friendly options in 401(k) retirement plans.
Alex has worked to increase efficiency and sustainability in the energy sector for some time now. We had the opportunity to hear how she has applied her past experiences to the 401(k) market in founding Sphere.
Can you tell us the story of how your company started? Where did the idea come from? And what specifically inspired you to get into fintech?
My life passion has been to help turn around climate change. I started my first company, Ayar Labs, in 2015, spinning a technology out of MIT that makes data centers and supercomputers more energy efficient by using light to move data between chips. When we started offering a 401(k) plan to employees in 2017, I asked our providers for a climate-friendly investment option in the plan. It ended up taking three years of persistence to finally get one added. I couldn’t believe how long it took and how hard it was, so I started talking to as many people as I could in the 401(k) industry to learn why.
I ended up learning that there are a lot of reasons it’s hard to do climate-friendly investing in 401(k)s, but none of them are insurmountable. When I learned that over $1.5 trillion dollars are invested in fossil fuel companies from U.S. retirement savings alone, it motivated me to start a company to make it as easy as possible for everyone to invest in a climate-friendly way.
How is your company leading the fight against climate change?
Aside from helping investors avoid the risky fossil fuel asset class, Sphere drives change through proactively voting customer shares for climate action. Lots of people don’t realize this, but every time you invest in a mutual fund or ETF, that fund votes on your behalf each time one of the companies they invest in has a shareholder vote. Most asset managers vote in line with board recommendations, and this typically favors keeping the status quo rather than taking action to protect the company’s long-term value in light of climate change.
Sphere proactively votes for climate action at the shareholder meetings of public companies. This encourages true climate action for years to come, as shareholders’ true desires for climate action start to be reflected in the way their shares are voted.
What do you want potential customers to know about your company?
Investing with your values can also mean earning more on your investments, so that you end up having more saved for retirement. Data shows that investing in fossil fuel companies has resulted in billions of dollars in losses on retirement-appropriate timescales, as the fossil fuel industry has consistently underperformed the economy at large over the long-term timeframes that are appropriate for retirement planning. On top of that, the fossil fuel industry has been the most volatile of all industries over the past decade. Excluding the fossil fuel industry from portfolios also protects investors from stranded asset risk — the risk that public pressure and regulations will require oil, gas, and coal companies to “leave it in the ground,” resulting in a devaluation of the key assets on the companies’ balance sheets and a loss of value of the shares in those companies.
We love hearing about opportunities to move money so it supports the climate rather than fossil fuels, and it’s enlightening to hear how that choice is actually the less-risky option in the long term!
We’d love to hear more about your journey as a female entrepreneur.
What has been your proudest moment in founding your company so far?
Getting customers! The Sphere 500 Climate Fund has been added to over 70 retirement plans so far. I am so proud of everything we have done to make it easy for every employer to add a climate-friendly investment option to their retirement plans, and our success with customers is a testament to the fact that we have created a product that checks the boxes that retirement plan fiduciaries look for.
What was something unexpected that happened throughout this journey?
We learned early on that we have two very different types of customers: we group them into two categories that we’ve named heart followers and rule followers. Heart followers care about climate change and are motivated to invest in a climate-friendly way. Rule followers have a fiduciary duty to choose acceptable investment options for retirement plans. The language that heart followers and rule followers respond to can be very different, and so we have done a lot of identity work in figuring out who we are and how we communicate to both those groups. I wasn’t expecting to have to navigate such a stark divide when I first started the company, and I am super proud of our team for developing and defining a company identity that speaks to both groups.
Do you have any advice for girls and women who are passionate about climate change and want to make a difference?
Once you’ve figured out what the problem is that you want to solve, hold space for confidence in what you are doing.
Potential investors and customers will question your decisions every day, and they will give you conflicting advice all the time. When this happens, remind yourself that, while the people giving you advice might have decades of experience in entrepreneurship or another relevant field, no one in the world has ever done what you are doing before. That means no one knows the right way to run your business better than you do. Gather advice from as many people as you can, and then in the end, trust your gut and move forward. You know best.
Climate Lightning Round
And now for the Climate Lighting Round, where we rapid-fire climate-related questions at you!
Our first question is: what is your favorite climate tech or topic?
Wind, solar, hydrothermal - which are you most excited about?
Distributed generation, whatever the technology may be
What is your favorite book or written resource about climate that you wish everyone knew about?
Notable women you admire, whether present day or in history, who have played a role in climate/environmental action?
Thanks for the inspiration, Alex!
P.S. We’ve spoken with Alex previously about recent changes to government policies regulating retirement plans.
Want to learn more about Sphere? Check out their social media!
If you want to stay updated on what Alex is doing, check out her personal social media.
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