Mark Tercek: Investment Banker Brings Market Finesse to Conservation

Cameron Walker

The new head of the Nature Conservancy is a 24-year Goldman Sachs vet who thinks big and acts globally. The Ecosystem Marketplace talks to Mark Tercek about his past success, his current challenges and his vision for TNC’s future.

12 August 2008 | Mark Tercek’s kids are stoked. They’ve been on family eco-vacations to Greenland, Patagonia, the Galapagos Islands and Costa Rica — and now, their dad is in charge of a conservation powerhouse that protects many of the spots they’ve visited.

Tercek, who became president and CEO of The Nature Conservancy (TNC) July 15, ran Goldman Sachs’ Center for Environmental Markets and the firm’s Environmental Strategy Group.

Growing up in Cleveland, Tercek didn’t have extensive exposure to the natural world apart from local parks. Now as a parent of four, he’s gone global so that his own kids can experience nature firsthand.

Clearly, they love it. “When my kids learned I got the job as head of the Conservancy, they were just as excited as I was,” he says.

Along with enthusiasm, Tercek arrives at TNC with decades of experience in the investment banking world and, since 2005, he’s been bridging the narrowing gap between finance and conservation through Goldman Sachs’ environmental initiatives.

Banking Background

Tercek, a Harvard MBA, got into investment banking because he saw it as a world where he could work with the best and the brightest from around the world on critical business decisions. “It’s a fast-paced, competitive environment that lived up to all my expectations,” he says.

He started at Goldman Sachs in 1984 and became a partner in 1996. During his time there, he led the firm’s investment banking global divisions in everything from transportation to equity capital markets. Tercek, who worked in Tokyo for Bank of America before joining Goldman Sachs, returned to Tokyo to lead the firm’s corporate finance business from 1990-1993; he also worked out of the London office during his career.

More than two decades into his varied work with Goldman Sachs, Tercek thought he needed a change.

“I was considering shifting gears into the public sector, education or the environment,” says Tercek, who was already putting in time as an adjunct professor at New York University’s Stearns School of Business, “and was thinking that I would leave the firm to do so.”

In 2004, just before Tercek began contemplating a departure, Goldman Sachs began a partnership with the Wildlife Conservation Society to conserve a large swath of land on Isla Grande de Tierra del Fuego, a Chilean island. The pairing created permanent protection of more than 680,000 acres containing the world’s most southern old-growth forest stands and wildlife from the Magellanic woodpecker to the guanaco, a wild relative of the llama.

The partnership, too, was Tercek’s first significant experience with TNC, which was an advisor for the project.

Seeing the positive results, Tercek says he “started thinking that opportunities for firms like Goldman Sachs to enact positive environmental change were only increasing.”

The project planted the seed of a new venture for the firm, too. While Goldman Sachs’ environmental advisors lauded the firm’s efforts in Tierra del Fuego, they also wanted more, challenging the firm to harness its financial acumen to address environmental problems.

“This really resonated,” Tercek says, “and the more we looked into it, the more we saw that we could pursue good environmental outcomes that were simultaneously good for business.” The result: the Center for Environmental Markets, established in 2005, which looks at market-based approaches to environmental problems

A conversation with Henry Paulson — then chairman and CEO of Goldman Sachs and chairman of TNC’s board of directors — set Tercek off in a new direction with the company.

Paulson, now the U.S. Secretary of the Treasury, asked Tercek to stay at the firm and spearhead a new initiative to make Goldman Sachs’ investments, and the firm itself, more sustainable. Tercek took the helm of the Environmental Strategy Group, which implements the firm’s environmental policy, and of the nascent Center for Environmental Markets.

Getting Sustainability Going

Working within both the Center for Environmental Markets and the Environmental Strategy Group, Tercek jumped into crafting the firm’s environmental policy.

At first, he and the firm met resistance both from within and without — people wondered whether they could boost both business and environmental goals. Yet the more the firm learned, the more opportunities they saw to achieve both business and sustainability goals. The process, he says, “made me realize how corporate America can really help to enact lasting environmental change.”

John Holdren, director of the Woods Hole Research Center (WHRC), met Tercek when he became the head of the Center for Environmental Markets. Goldman Sachs and the Massachusetts-based research center, which focuses on land use and forest ecology research, had been exchanging ideas since 2003, when Holdren gave the opening address at a New York climate summit and attracted the firm’s attention.

The private sector has realized not only that environmental problems are real, Holdren says, but that “ultimately, there will be money made by solving them.” Goldman Sachs worked with WHRC to understand the latest environmental research so that they could be on the forefront of this movement, he says.

In fall 2006, Goldman Sachs’ Center for Environmental Markets committed $1 million over three years to the research center through the Clinton Global Initiative. The research center has already added an economist and beefed up their work in forest ecology, studying how a forest’s health affects how it stores carbon.

While the center will miss Tercek in his former post, “he’s an asset whether he’s in the financial community or the NGO community,” Holdren says. “Mark is very smart, very energetic, very thoughtful. He’s a terrific entrepreneur in thinking about how to use markets to solve environmental problems.”

Along with developing programs and relationships with organizations like the Woods Hole Research Center, Tercek and the firm also turned the sustainability lens inward, investing $1.5 billion in alternative energy and clean technology, incorporating sustainability principles into financial research, and building the firm’s new LEED-certified world headquarters in Manhattan. The firm started using recycled office products and disclosing its carbon footprint.

“When we initially released our environmental policy framework, the main goal was to get each of our businesses thinking about being more sustainable,” Tercek says. The long-term goal: to use the firm’s global influence to tackle environmental problems. “While there’s certainly still a lot of work to be done, all of our investors and corporate partners have thus far really been on board.”

Moving into Conservation

Big challenges seem to call to Tercek, and the ambition of TNC’s work (one goal is to protect 10 percent of every habitat type by 2015) caught his attention.

“The very size, scale, track record and fundraising success of the organization made me realize that the organization is well positioned to achieve real conservation successes,” he says.

Even if a shift from investment banking to conservation might surprise some, Tercek came to the attention of the organization’s board through recommendations from several leaders in the environmental community, says Jim Morgan, a member of TNC’s board of directors.

His commitment to the environment — and his desire to widen his knowledge — has caught the eye of others, too.

Phil Sharp, president of environmental policy think-tank Resources for the Future, says that while Tercek’s early background was not in conservation, he kept seeing Tercek at major environmental meetings and events. It was apparent that Tercek believed in the importance of his work.

“He’s genuinely committed,” Sharp says.

Resources for the Future also partnered with Goldman Sachs through the Clinton Global Initiative, and Tercek joined Resources for the Future in April.

And Tercek’s desire to understand isn’t just limited to attending meetings; he already has an intimate knowledge of how large institutions work — and if he needs help, he’ll ask for it.

“He strikes me as a person that, as problems come up for the organization, will just naturally seek out advice,” says Sharp, adding that quality is “a good sign of leadership.”

Partnerships have been crucial to the organization’s work, TNC’s Morgan says. Two recent programs are the Great Rivers Partnership, which links river basin research on the Yangtze (China), the Zambezi (Africa), the Paraguay-Paraní¡ (Brazil), and the Mississippi (US); and research in the Coral Triangle, which spans three nations in its efforts to protect 15 percent of the region’s marine habitat in the next decade.

Creating interwoven strategies like these is an area “that TNC has to be really outstanding in going forward.” Tercek’s experience in bringing together various organizations with the center for environmental markets will be an asset, Morgan says, calling him a “natural collaborator.”

Though he’s only been on the job since mid-July, Tercek says he’s already told colleagues that the research he’s doing at TNC feels very similar to the documents that came across his desk at Goldman.

“There is a lot of overlap in the way the Conservancy does business and the way Wall Street does business,” he says.

He’ll also bring in his other interests, including education, to the organization. Along with teaching at NYU, he ran Goldman Sachs’ leadership development program. Tercek plans to continue to focus on professional development at TNC.

Two weeks into the job, Tercek didn’t give specifics for his plans in his new role; he did say that climate change would remain one of the organization’s top priorities.

Sure, climate change is a huge issue — but that’s no surprise.

“I really enjoy collaborating with hard-working, well-intentioned, smart people in the pursuit of tackling big challenges,” he says. “The Nature Conservancy is full of creative problem-solvers working passionately to achieve ambitious goals for conservation.”

Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at [email protected].