Tom Chi doesn’t have much patience for that whole routine. In a wide-ranging conversation about his new book, Climate Capital: Investing in the Tools for a Regenerative Future (Wiley, 2026), the Google X co-founder and innovator offered a metaphor that’s both blunt and clarifying: “Trying to solve the climate problem by first persuading people who don’t accept the basic physics is like trying to build an aircraft with people who don’t believe flight is possible. You don’t get anywhere.”

This isn’t “stop persuading.” It’s “stop postponing.” Secure the minimum agreement needed to act, then let real-world progress do the persuading.

Chi has honed this capacity across a range of disciplines, from astrophysical researcher at the Harvard-Smithsonian Astrophysical Observatory at the age of 15, to Fortune 500 company consultant. He’s played a pivotal role in the development of tools that are synonymous with the modern age, including Microsoft Outlook and Yahoo Search. At Google X, he shaped Google Glass and its self-driving cars. As a founding partner of At One Ventures, he is driven to direct seed funding to disruptive tech innovations that help industries become a net positive to nature.

Chi says we need to change how money, rules and decisions work – and we need to move quickly. To achieve that, he offers a diagnostic: watch the vocabulary. “When you’re actually advancing on a problem, the language around the problem keeps advancing.”

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In fields that are genuinely learning, nouns evolve. Conversations become more precise. Arguments get technical. Questions shift from whether something is possible to how it’s built, financed, regulated and deployed. You can feel the difference between a debate that is stuck performing morality and a discipline that is moving toward execution.

Climate hasn’t had enough of that linguistic evolution. In fact, it has often moved in the opposite direction – toward softer terms and convenient vagueness. We’ve normalized “climate change,” a phrase that makes a crisis sound like a gradual shift you can adapt to over time. But what we’re living through is a loss of predictability: more extremes, more swings, more disruption. That’s why “climate destabilization” is the more accurate description, according to Chi.

Chi argues that the real story isn’t just warming; it’s volatility, or the breakdown of predictability that underpins everything from infrastructure engineering to actuarial models. As he puts it, “The killing edge of climate risk is volatility, not averages. We should have been tracking variance and standard deviation.”

Averages don’t overwhelm storm sewers; extremes do. Averages don’t shift growing seasons, then whiplash them back; variance does. And in Canada, where climate impacts are now colliding with household budgets, volatility is increasingly visible on one front in particular: insurance.

When catastrophic losses rise and become harder to price, the cost doesn’t stay in the balance sheets of insurers or reinsurers. It moves into premiums, deductibles, exclusions – and then into politics. Affordability becomes the headline, and the climate signal gets translated into the language of family finances: can I insure my home, and if I can, what am I giving up to do it? For Chi, “destabilization” captures how climate risk migrates across systems – from weather into underwriting, from underwriting into housing costs, from housing costs into inequality.

Climate Capital is about how the economy is designed – and how capital can be used to redesign it, so we stop financing damage and start financing durability. Chi treats economics as a design discipline, not a natural law. Which is another way of saying: the world we have is not inevitable; it’s governed.

And governance, in his telling, is not only spreadsheets and oversight. It’s culture. It’s relationships. It’s the invisible infrastructure of decision-making inside institutions that claim they want change while rewarding stasis. Chi’s most practical move is to argue that the “soft stuff” is not soft at all: “The financial performance stuff is table stakes. The other half of board management is emotional labour – and the quality of relationships is what determines outcomes.”

Transitions fail not only because technologies don’t exist, but because institutions can’t hold the trade-offs. They fracture under conflict, treat legitimacy as branding and assume that trust is a “nice-to-have” rather than a form of capital that compounds, or collapses.

This is where Chi’s “4Cs” rubric – critical thinking, creativity, compassion, community – becomes less a personal development list and more an institutional capability set. Critical thinking to interrogate the assumptions embedded in risk models. Creativity to fund deployment pathways, not just prototypes. Compassion and community to maintain the relational capacity required to make hard decisions repeatedly, at speed, without losing the room. This last requirement becomes non-negotiable in a destabilized climate, he argues.

The climate conversation doesn’t need another round of rhetorical victories, Chi says. It needs different builder behaviour: procurement that values resilience, not only unit cost; financing structures that bridge first-of-a-kind projects across the valley of death; investment committees that treat adaptation as investable infrastructure, not an afterthought; and insurers working with governments and builders so “build back better” stops being a slogan and becomes a default.

The test of whether we’re moving forward won’t be whether we publish another eloquent climate statement. It will be whether we can start naming things as they are and following up with tangible actions.

The following excerpts have been edited and condensed.

Chi on the urgency of the era

“There is a type of urgency to technology, but it’s really more a competitive urgency where you try to be the first to do an innovation. You’re going to be the first to go and get a new feature out there, to be more attractive to customers, all that sort of thing. There is no more foundational timeline to it other than the urgency of capitalism: trying to be an innovator in a competitive field.”

“But when I saw the [coral] reef die and I talked with a bunch of coral scientists about it, a very specific timeline started to come into view. We mostly talk about them as planetary tipping points, and I actually think that’s a little bit too abstract. There’s a lot of things that are happening which are one-way doorways we will not be able to go back through. If a lot of the Amazon rainforest fully succeeds in becoming more savanna-like, then that’s not something that’s easily reversible.”

“There’s a point where things either become undoable time-wise because the thing has become extinct or the thing has disrepaired so extensively where it becomes economically unviable for us to go sustain it in the better state. [Seeing] that recontextualized a lot of things for me.”

Chi on climate vocabulary 

“I wanted to use a term that would capture what I was seeing in the data, all those disruptions. And the best word that I could come up with was ‘destabilization,’ because whether it’s warmer or cooler, you will be destabilized compared to your historical baseline. Whether it’s wetter or drier, you will be destabilized. Whether you’re now having thousand-year storm events every five years – which is kind of the zone that we’re getting into right now – or whether for you it’s a 100-year storm every three years, that is all still destabilized. And I wanted the term that would be accurate for all the spots on Earth and reflective of the numbers. Because I’m a scientist first, right? I want to make sure that we get the numbers right. And then I try to make the communication true to what the actual truth is, as opposed to what will elicit the least amount of action and emotional sentiment.”

Chi on climate change deniers

“The entire dialogue has been hijacked by the climate deniers. We’ve spent so much time trying to go and reason with people that have no interest in reason. Trying to go and solve climate change after convincing climate deniers is like trying to go build an aircraft with people who don’t believe in flight. You just don’t get anywhere.”

Chi on the ‘average’ trap 

“The easiest way for the scientific community to coordinate was to move toward averages. It’s relatively easy to agree on averages: You did a study. I did a study. We did a study. Let’s add all the data points together. We can find the centre of gravity here. We can find the averages.”

“Now the problem is that it’s the volatility that is the killing edge of climate, not the averages. What a half-a-degree increase might mean in a particular spot on Earth might mean six degrees hotter in the summer, five degrees colder. We should have been looking at things like standard deviation, variance, other sorts of volatility metrics. That would have given us a way more realistic sense of how soon it would be before we would have, for example, disruptive scales of wildfire. Because it was way sooner than most people thought when they were looking at the averages.”

Shilpa Tiwari is the founder of No Women No Spice and Isenzo Group.

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Assets committed to net-zero by 43 member firms of the Net Zero Asset Managers Initiative (NZAMI) ranged from 4% to 100%, according to the analysis by investment research firm Morningstar. But only nine managers committed 100% of their assets to net-zero and 15 committed less than 50%. 

The Morningstar analysis, which was released in July, is the first time the investment community has had an in-depth look at the climate commitments of NZAMI members. 

The report notes that smaller managers and those specializing in sustainable investment committed a higher proportion of net-zero-aligned assets under management (AUM) than larger and more diversified managers.  

Vanguard Group, for example, the world’s second-largest asset manager at $8.1 trillion in assets, came last at 4% net-zero assets under management. State Street Global Advisors, the fifth-largest manager at $4 trillion, was fifth lowest at 14%. Invesco, ranked No. 20 in the world at $1.6 trillion, reported the fourth-lowest net-zero AUM at 12%. 

Even Brookfield Asset Management, whose head of transition investing is former governor of the Bank of England (and Canada) Mark Carney, was the 12th-lowest firm with net-zero AUM of 33%. Carney founded the $130-trillion Glasgow Financial Alliance for Net Zero (GFANZ) last year.  

NZAMI signatories have committed to achieving net-zero CO2 emissions from companies and sectors financed through their portfolios by 2050. They join other signatories in the banking, insurance and asset owner sectors that are also part of the GFANZ alliance. 

NZAMI requires its signatories to disclose in the first year after they join the percentage of AUM they target to manage in line with net-zero. This percentage reflects the proportion of total assets targeted to achieve the company’s “fair share” of global carbon reduction required by 2030 to maintain a global temperature rise of no more than 1.5°C (generally considered to be 50%). NZAMI also requires members to disclose when they intend to meet these targets and their target methodology. 

The Morningstar study is based on a subset of 43 members that joined within the last 12 months out of NZAMI’s total membership of more than 270 signatories representing $61 trillion in assets (nearly half the total AUM in GFANZ). Another 40 signatories issued earlier targets. 

As managers of money on behalf of institutions and individuals (or asset owners), asset managers act as central gatekeepers in sustainable finance. “Asset managers have a crucial role to play in pushing companies to set ambitious and credible net-zero targets,” said Hortense Bioy, director of global sustainability research at Morningstar and lead author of the report.  

But the Morningstar study shows that the major players are exercising little ambition in this important climate change role.  

Asset managers have a crucial role to play in pushing companies to set ambitious and credible net-zero targets.

-Hortense Bioy, director of global sustainability research at Morningstar  

Vanguard’s target, for example, consists of only nine funds sub-advised by another company (also listed in the report) and excludes the vast majority of Vanguard’s own assets. State Street adopted a similar approach, although it counted assets from clients and index portfolios expected to adopt net-zero targets. 

BlackRock, the world’s largest asset manager at $9.6 trillion, was 27th highest on the net-zero list at 77% of net-zero AUM. However, the study notes that the BlackRock target is based on decarbonization pledges from companies in its portfolios, rather than any major changes to its portfolios to finance or encourage emission reductions. “This approach assumes that more companies will adopt net-zero targets and the portfolios themselves will decarbonize as a natural consequence of the companies’ real-world decarbonization,” stated the report. 

BlackRock’s and Vanguard’s unambitious approach to net-zero targeting is in line with their business model, based largely on passive investing in exchange-traded funds and index funds. 

This is in contrast with the top managers on the list, which include relatively small firms, many of which have explicit, actively managed responsible investment mandates. These include Valo Ventures, Stafford Capital Partners, Ridgewood Infrastructure, Quinbrook Infrastructure, Mirova, FSN Capital Partners, Developing World Markets, Clean Energy Ventures and Asteria Investment Managers, all with 100% net-zero AUM. 

To be fair to the large companies, the study notes that NZAMI permits a wide variety of target-setting approaches and methodologies, which partly accounts for why similar firms have varying targets. This flexibility makes it difficult for investors to assess managers’ climate goals, “raising questions about the reliability of any of the commitments and decarbonization targets.”  

Shortly before the report was released, GFANZ issued new guidance for all its member organizations, including a framework for net-zero transition plans. As well, Race to Zero, the umbrella organization for the UN’s 10,000 net-zero signatories, including GFANZ members, released new membership criteria, including a requirement to produce fossil fuel phaseout plans. 

But in an email interview, Bioy said she isn’t optimistic that either the GFANZ guidance or the Race to Zero membership rules will improve target setting. “External factors, such as the energy crisis, the Ukraine invasion, as well as the lack of data and methodologies, will continue to contribute to the wide divergence in target setting criteria,” she said. 

So, what are institutions and individuals supposed to do when looking for an asset manager? The report ends with a bit of advice. “Climate-focused investors will want to partner with the most committed asset managers – that is, well-resourced firms with the appropriate data, tools and expertise to create the best net-zero-aligned investment strategies and demonstrate the impact they generate through engagement with issuers.” 

Eugene Ellmen writes on sustainable business and finance.

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Many of the world’s biggest banks face the enormous challenge of realigning their entire loans and investment operations in the coming years to put themselves on a credible path to achieve net-zero carbon emissions by 2050.

“We want to see whether they are requiring all their clients to actually disclose their [greenhouse gas emissions],” said Danielle Fugere, CEO at As You Sow, a San Francisco–based shareholder advisory service, in an interview. “Ultimately, best practices come down to are we seeing year-over-year changes in their capital flows?”

Under the Glasgow Financial Alliance for Net Zero forged for COP26, the banks have committed to not only decarbonize their portfolios but to adopt a transparent and rigorous short-term strategy that ensures they meet that 2050 target. The alliance, led by former Bank of England governor Mark Carney, comprises separate agreements for various financial sectors.

The banking agreement includes many of the largest financial players in North America, including JPMorgan Chase, Citigroup Inc., Royal Bank of Canada and Toronto-Dominion Bank.

Last week, the Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI) released the results of a pilot study on climate-related risk scenarios conducted with four Canadian insurance companies and two banks. OSFI said it will issue draft guidance for climate risk management for federally regulated financial institutions later this year.

All of the scenarios modelled by the government agencies and financial institutions showed that this transition will “entail important risks for some economic sectors,” a press release about the pilot study said. “Mispricing of transition risks could expose financial institutions and investors to sudden and large losses. It could also delay investments needed to help mitigate the impact of climate change.”

There is, unsurprisingly, considerable skepticism as to whether big North American banks can meet climate-related goals by weaning themselves off the fossil fuel sector and instead focusing on the loans and investment needed to finance the transition to a net-zero economy.

We want to see whether they are requiring all their clients to actually disclose their [greenhouse gas emissions].

-Danielle Fugere, CEO at As You Sow

Civil society research groups in the United States and Canada are determined to hold the industry’s collective feet to the fire. On December 16, Investors for Paris Compliance, a Canadian advocacy organization, released a “best practices” report that aims to guide not only banks but their shareholders, who are increasingly challenging business-as-usual practices at annual meetings.

The report calls on banks to put in place policies that will allow them to cut the carbon emissions of companies they finance by half by 2030, and to immediately end financing for new fossil fuel projects. The banks should adopt science-based targets for 2030 – aligned with the goal of limiting the average global temperature increase to 1.5°C above pre-industrial levels – and tying compensation to progress on meeting the climate goals.

The report notes that the world is already seeing enormous costs from extreme weather events related to climate change, most recently with the catastrophic flooding in British Columbia and the searing heat and drought experienced throughout western North America last summer.

“Climate impacts are now material to investors and [are] set to become even more so,” it says. Banks “fail investors” when they finance that worsening climate picture, it adds.

In the United States, organizations such as the Interfaith Center on Corporate Responsibility; Boston Common Asset Management, an ESG-focused investor; and As You Sow plan to engage with the signatories of the net-zero agreement both directly and at shareholder meetings to press them on implementation.

Banks face risks from the physical impacts of climate change as well as from government policies and emerging technologies that will disrupt their big customers in the carbon-intensive sectors. Still, they continue to allocate new capital to finance coal, oil and gas companies.

The world’s 60 largest commercial and investment banks provided US$3.8 trillion in financing to the fossil fuel sector worldwide between 2016 and 2020, according to a report, Banking on Climate Chaos, produced by a coalition of environmental advocacy groups. JPMorgan Chase and Citi continued to lead that list last year, while RBC and TD banks were among the top lenders to fossil fuel companies.

While short-term profits from financing the fossil fuel sector can be alluring as oil and gas prices soar around the world, credit rating agencies are also warning banks that climate change is a “major threat” to financial institutions. Analysis from Moody’s Investor Services recently concluded that climate risk is becoming a key determinant of banks’ loan quality and creditworthiness.

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These are just some of the enterprises listed on Social Venture Connexion (SVX), a platform launched in September that connects them with investors who want to see a positive impact as well as financial returns. The Toronto-based SVX is North America’s first such platform.

It comes as Canada’s social venture sector is blossoming as new entrepreneurs use business models to tackle social or environmental problems. They’re filling a key gap, given government austerity and persistent societal challenges.

Investors, too, are getting on board: Investment in the sector has reached $5.3 billion and is expected to hit $30 billion in Canada over the next decade with the backing of foundations and mainstream investors. (A new estimate, to be released in early 2014 by Purpose Capital along with MaRS Centre for Impact Investing and RBC, pegs the total market size at about $8.8 billion currently).

The overarching goal? Adam Spence, founder of the SVX, says he hopes to create a high-impact channel for investments and ventures to “move the yardstick on pressing problems like poverty, safe homes, success in employment and climate change.”

The sector is taking root in other countries as well. The U.K. is home to the world’s first social impact bond and is creating several social investment funds. In the U.S., both Morgan Stanley and Goldman Sachs in November announced expansion into impact investing. And the G8, which held a social impact investment forum last June, has created a task force that’s working on a blueprint for “rapidly accelerating development” in the sector.

Across Western countries, “demographic pressures of an aging population and macroeconomics mean governments won’t have the money they need to find new ways to solutions,” and are thus looking at non-traditional sources of capital, said Antony Bugg-Levine, New York City-based chief executive of Nonprofit Finance Fund and chair of the Global Impact Investing Network.

Younger investors, in particular, are keen on allocating more funds into impact investing, he said, noting the plethora of MBA programs and post-secondary courses on social finance, which are often over-subscribed.

He’s not the only one who sees more growth ahead. “It’s exploding,” said Sally Osberg, president and chief executive of the Palo Alto, California-based Skoll Foundation, which has invested about $400 million in the past 14 years to almost 100 social businesses around the world.

Osberg says climate change is both a growing challenge for many of the businesses in which it invests and a driver of interest in the sector. Often, as in the case of Typhoon Haiyan, it is local social businesses that are most nimble at stepping into a crisis situation and rebuilding economies.

In Canada, governments are part of the momentum. The federal government plans to develop partnerships in the sector and explore the use of social finance tools. Last fall, the Ontario government launched a social enterprise strategy that aims to make the province the top jurisdiction for the sector on the continent. British Columbia has created a social innovation council, while Quebec has pledged to develop its social economy.

Foundations are beginning to move more money into the sector. The Canadian Task Force on Social Finance has recommended that the country’s foundations, which collectively have $36 billion in assets, allocate 10 per cent of their capital in mission-related investing by 2020.

Some of the big banks are nosing around the sector, too. Royal Bank of Canada has put $20 million toward socially responsible investments, while Toronto-Dominion Bank (along with the Ontario government, KPMG and Alterna Savings) is backing a new Ontario Catapult Microloan Fund.

The SVX, first proposed in 2007, is the result of a partnership between the Ontario government, the MaRS Centre for Impact Investing and the owners of the Toronto Stock Exchange. With its creation, “we hope to place Canada at the forefront of social investing,” said Tom Kloet, chief executive of the TMX Group in a September speech.

For all the hoopla, it’s important to remember the idea of social finance is largely untested and there are bound to be tensions between the twin aims of tackling a social problem and generating profits. In these early days, much of the actual impact on peoples’ lives has yet to be demonstrated.

In Vancouver, Paul Richardson runs Renewal, one of North America’s largest early-stage impact investment funds. Its second fund managed to raise more than $30 million during the recession and has since backed nine ventures, which together grew revenues in 2012 by an average of 40 per cent. Renewal is now raising capital for a third, larger fund. “That more people are getting into this space is hugely exciting to us,” he says.

At the same time, Canada’s first incubator for social ventures – which allows people to work and live together – is also under way. The University of Waterloo’s GreenHouse lets undergrads live in residence together for a term or two and collaborate on ideas that aim to solve a social or environmental problem. They receive advice and training in how to run start-ups, access capital or craft a pitch.

Director Tania Del Matto sees the initiative as a launch pad. “We want them to set something up in which students can then say, ‘I’ve made a difference in society.’”

Colliding forces are spurring sector growth, she said. Non-profits are seeing competition for funding heat up as budget-tightening governments download services into their sector. They’re looking to traditional business models to help fund the gap. On the other side, companies are being held more accountable to the communities and environment in which they operate. They’re looking to the social sector for guidance.

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