The Power Index: carbon cutters, Oliver Yates at #4
Banking chief Oliver Yates seems horrified to be asked if he is a “greenie”.
What’s a greenie, he asks? An environmentalist, The Power Index replies; someone who wants to protect the environment. There’s a pause. “I consider myself to be a father with three kids,” he answers carefully, explaining he feels a responsibility to the next generation.
It’s a fair question. Why would someone who’s spent 20 years in the millionaires’ factory of Macquarie Bank leave all that to head up the government’s new, controversial green bank — which might be shut down before it gets going?
Yates is CEO of the Clean Energy Finance Corporation, which has $10 billion of taxpayers’ money to invest in renewable energy and energy efficiency. The money starts to flow with an initial $2 billion from July; the Coalition has already promised to close this “giant slush fund”.
There’s not so much as a dreadlock or a hemp garment to be seen on this suited banker, but one lesson soon becomes clear: if you strip away the emotional language of the climate wars, there are people who would like better environmental outcomes in unexpected places.
Yates started at Macquarie in 1988 and worked in Australia, Europe and the US, for both Macquarie Bank and Macquarie Capital. He shifted to the company’s green banking section relatively recently and was global head of utilities and climate change (including investments in wind, solar and carbon credits) from 2008-10. He worked on REDD, the UN’s forest carbon scheme.
Yates’ salary doesn’t appear in Macquarie’s annual reports; the firms’ top executives earned $1.4-5.2 million, including bonuses, in 2010. An expert on banking remuneration pointed out Yates was at Macquarie for the pre-GFC boom years, and estimated he may have been paid close to or over $1 million in some years, depending on the performance of his portfolio (Macquarie was known for paying highly variable salaries depending on the latter, while base pay could be relatively — and we’re talking about bankers here — low).
Yates left Macquarie in 2010, was involved in smaller firms — Driftwood Capital and Linc Energy — and unsuccessfully sought NSW Liberal preselection for the Senate in 2009. He started at the CEFC in November, lives in Melbourne and commutes to CEFC headquarters in Sydney.
The CEFC was a surprise announcement. Modelled on the UK’s green investment bank, it sits within Treasury and lends money to co-finance green projects. Reserve Bank stalwart Jillian Broadbent is the board chair (she’s seen as the safe pair of hands at the top, with Yates as the day-to-day driver), and there’s an ex-Macquarie power clique, with Michael Carapiet and Anna Skarbek on the board.
The CEFC can invest in manufacturing and transmission, but is aimed more at proven technologies than start-ups, and doesn’t give loan guarantees or grants. Its line of credit doesn’t appear in the budget; the money is lent out and the government expects a rate of return equivalent to the bond rate (about 3.5%). So Yates doesn’t just spend your money, he’s supposed to get it back.
Yates has a cool, brusque manner when interviewed over a coffee in Melbourne. He doesn’t bother with spin or try to persuade; he gives straight answers and behaves like someone used to being listened to. He seems used to letting his balance sheets do the talking. Crikey shouts Yates a coffee, which is probably what you want from the person in charge of $10 billion of your money.
“Most industry insiders reckon Yates has the Macquarie touch (read: a banker’s ego). One senior figure said you either like him or you don’t.”
Climate industry analyst Rob Fowler welcomed the arrival of this mainstream banker: “I think it’s important people from the real world get more and more involved in this area.”
Page 1 of 2 | Next page