Apollo Global Management started out life as a buyout firm, but now has over $600 billion in assets under management and includes both a private-equity and private-credit business. It focuses on the U.S., but also invests in Europe and Asia and aims to raise and deploy $100 billion in clean energy and climate investments.
In 2021, the firm appointed Dave Stangis as its first chief sustainability officer. A sustainability veteran with more than 24 years’ experience, Stangis has built sustainability teams at both Intel and Campbell Soup.
Stangis spoke to WSJ Pro about how he is injecting sustainability in the firm’s culture, how he approaches the logarithmic challenge of climate reporting for Apollo’s portfolio and his love of classic cars.
This interview has been edited for length and clarity.
WSJ Pro: Where were you in December 2015, when the Paris accord was agreed?
Stangis: I was the CSO at Campbell Soup Company. We were the chair of the consumer goods forum with many of the world’s largest food and beverage companies and retailers. We were pulling content together to help some of the negotiators in Paris, not knowing that the exact negotiations would come out the way they did, but knowing that it was a critical point in the journey on climate.
WSJ Pro: Did you have a green epiphany?
Stangis: It came at Intel, in my early days. I dealt with share-owner activists filing resolutions, and communities really upset about things they thought were happening in Intel’s plants. I spent a lot of time meeting with them and thought somebody should have this role at a firm like Intel: We’re managing big materials, a big company, a big reputation, toxic waste materials.
WSJ Pro: Do you have a favorite sustainable product or service, that isn’t an Apollo company?
Stangis: I’m a mindful consumer, some might call me frugal. I research things to death before I buy them and I take care of them and they last forever.
WSJ Pro: Aside from flying, what is the most carbon-heavy thing you do?
Stangis: I was born, raised and educated in and around Detroit. I have a spot in my heart for classic cars and I think there’s some art, literally, in some of the most complex internal combustion engines on the planet. I don’t have a garage full of these cars, but if I had the chance, I probably would.
WSJ Pro: What would you recommend a high-school student studying and why?
Stangis: Follow the thing that you love, but also think about the benefit you want to bring to the world. I wouldn’t worry so much about what’s the job I’ll get after my bachelor’s degree. It never works out that way. Most people are not doing exactly what they thought they were going to do in their senior year of college.
WSJ Pro: What are some of the most important sustainability developments in recent times?
Stangis: The language and controversy in the U.S. is something a lot of companies are paying attention to. The energy transition is here, it’s coming and I don’t know that it matters what the rhetoric is.
I’m excited about the investments we are making, the role of private capital and energy transition. We actually announced our sustainable investing strategy on the day Russia went into Ukraine. We knew that was going to change the language from energy transition to energy security and we actually debated that morning: Do we still go forward with it? [Editor’s note: They did.]
We’re seeing in more recent times: adaptation, resilience, the response to climate and weather events—it’s starting to be very real to many more people. And biodiversity and nature-based solutions are some of the more interesting things we’ll see coming forward. This has been a fast-moving career for 25 years or so, but it’s even accelerated more in the last two.
WSJ Pro: What are the important themes that you’re paying attention to in the next year?
Stangis: I’m designing capabilities for Apollo: Where are our investors? Where do they want us to be? And where are the regulatory frameworks? And then how can I literally activate 4,000 people to do that.
We are working on reporting readiness: What is the operational system? What are the controls? How do we manage data quality? What can we automate? In terms of our regulatory reporting, we made some great progress, but it’s also helping and building the tools for our portfolio companies. Over the last 10 years we’ve had hundreds of portfolio companies that we’ve worked with on sustainability programs, decarbonization plans, human capital plans, better procurement strategies, supplier diversity. Building the tool sets for them.
WSJ Pro: Private Equity, particularly buyout companies, have a reputation for being focused on the bottom line. What part can Apollo play in building a sustainable future?
Stangis: There’s definitely a historical reputation in this sector and it’s something that I evaluated when I came. I’ve been almost like the chief ethics or the chief responsibility officer for some companies and that’s one of the roles I want to play here. I want to educate people.
On the equity side, we’ve set new climate targets for our Flagship Fund across that portfolio over the holding period: A better sustainably-operated company is a higher-value company on exit. Our impact fund is focused on the clean transition. Every company gets an ESG playbook on how to optimize. They get a laundry list of expectations from us around sustainability and where we can help them and where we can do training.
On the credit side, which is the bigger part of the business, it is really thinking about how to do the rigorous due diligence, risk identification, risk management, make sure it’s in the underwriting, helping our companies and reporting to our investors—who expect much more in terms of transparency around sustainability as well.
It’s definitely been a change. Part of my conversations with the leadership of this company every week—this is a competitive differentiator—if we can build the best team and the best capabilities we want to compete in sustainable investing. And it’s not just in one little part of our business, we want it to cut across all the parts.
WSJ Pro: What are the biggest sustainability challenges or hurdles that Apollo faces?
Stangis: Data has always been a challenge. Private companies have not been publicly reporting greenhouse gas or human capital data for decades, so there’s a lot of onboarding. For a lot of the credit investments, we are one of many investors, so that kind of data is challenging to get.
The other challenge is: Where can we deploy our capital to have the biggest impact? There’s lots of heavy-emitting industries out there that need capital to decarbonize. We want companies to come to us and say, ‘Hey, we’ve got an idea to be more green, to drive decarbonization, we want to be a more sustainable company. It requires flexible capital. Can you help us?’
WSJ Pro: What impact, if any, will mandatory climate-reporting have on the data challenge?
Stangis: We’ve got data from all of our portfolio companies from surveys of 100-plus questions every year. We’ve been doing it for 14 years. So our portfolio companies, they’re literally doing sustainability reporting to us, we’re compiling it and then making that public.
On the credit side, we’ve on-boarded a couple technology platforms to help us do climate-reporting, to get behind the scenes where we’re not just using proxy data, but how primary can we get the data.
The amount of reporting that we have to do in the space: financial, LP and our products all need stand-alone reporting and that’s where this kind of math gets logarithmic, but that’s what we’re building.
WSJ Pro: Are there best practices that you would recommend?
Stangis: Everybody should have a well-defined role. In the center of the house, I want the expertise to be the best in class and everybody knows where to go for the answers. But then where actual decisions have to be made, that’s where you want to insert sustainability into the business operations. Its expertise in the center, execution in the arms and legs.
Selected Apollo Global Management Climate Goals for 2030
-$100 billion raised and deployed in clean energy and climate investments
-15% reduction in median carbon intensity for new investments in companies Apollo controls under its flagship strategy, over the projected hold period
Source: Apollo’s 2022 sustainability report
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