Lucy Thomas
Head of Sustainable Investing

The legendary American jazz virtuoso Keith Jarrett strides on to the stage, sits down at his piano and, once his audience has fallen silent, begins to play. Starting with just four notes – tentative, reluctantly, even – he gradually builds his performance, coaxing astounding melodies, harmonies and cadences from his instrument in a dazzling display of brilliance that puts the 1,400 onlookers in raptures.

It is January, 1975, late in the evening at an opera house in the German city of Cologne and the man widely regarded as one of the world’s greatest musical improvisers is making history. The recording of the “Köln Concert” – performed without rehearsal, preparation or notes – was to become the biggest-selling jazz piano album in history and an inspiration for music lovers worldwide.
Now shift the setting, to a futuristic New York, and a timber, aluminium and glass office building dominates the skyline. It has sealed the reputations of its architects and structural engineers as a triumph of energy-efficient design and a paragon of the modern workplace. Its carbon emissions are award-winningly low.

What the gazing observers and excited critics don’t know, though, is that just months beforehand an overwrought project management team had been putting the finishing touches to their own carbon-mapping system in a bid to overcome the prevailing inadequacies of existing measures of projected CO2 emissions. Or that the entire air-conditioning had to be replaced – by a start-up whose eleventh-hour ceramic network was the only one that passed environmental muster. How did they do it? They worked with what they had; they improvised.

Shift the scene (and fast-forward time) again. To the outskirts of Paris and a busy suburban railway where trains stop mid-station to let passengers admire a thriving local nature reserve. The sanctuary sits next to a compact residential development with a burgeoning waiting list of wannabe tenants, keen to inhabit its wooden-clad eco-homes.

Yet, less than two years ago, construction was brought to a grinding halt on the discovery of a rare and protected breed of moth, whose habitat was directly in the proposed rail-link’s pathway. A skeptical new mayor worried about threats to the indigenous community abruptly threatened to pull funding. Financial backers, concerned to minimize their likely losses, were growing edgy.

Which brings us to the last shapeshift. In London (again, at a future date) a stressed risk manager sits with her head in her hands, having spent hours poring over the incomplete data that has made pricing a bond issue next to impossible.

Her firm wants to finance a new clean hydrogen plant in the north of England, whose worthy aims contain numerous likely pitfalls. The carbon capture technology proposed is nothing if not ambitious, costs are rising, demand remains unpredictable, and central government’s appetite to get behind the green venture seems to be waning. Does she agree a figure in the face of the unknowable, or refuse to sanction the funding and risk her employer’s standing?

Each of these scenarios could have resulted in entirely different outcomes – and, with our London risk manager, there may yet be more unforeseen surprises and it might still. In each case the protagonists have lofty ambitions, but they also find themselves operating in an imperfect world that is relentless in its propensity to catch them unawares. And, needless to say, with the exception of the case of Jarrett, each instance is set against the backdrop of the world’s overarching aim of reaching net-zero emissions by 2050 at the latest.

There are plenty of common threads. Carbon mapping the lifetime of a building, new or otherwise, can only be an incomplete science that relies on best-guess forecasts. Finding the best way to preserve our natural habitat, or work with an often underserved local community, remains a work in progress. Costs, impacts and the motions of the economic cycle around them are perilously hard to predict. Throw in a global pandemic and everyone’s figures will go awry.

In London, the risk expert debating whether to give the all-clear to her firm’s backing of a new renewable energy venture has a difficult task ahead. Green hydrogen is a potential base renewable fuel of the future; its technologies are moving rapidly but costs are high and there are also potential negative environmental effects.

Our manager has to balance the likely generous future revenue streams from the project – almost certainly in the near term underpinned by subsidy – against the potential risks to her firm of pressing ahead and lending the money. The available data will inevitably contain holes and there is yet to be a common universal standard for reporting them.

Her counterparts in these stories were there before her, and embraced the imperfect place in which they found themselves – and, like a true jazz musician, shifted and adapted their patterns along the way. Complex dynamic systems do not respond in linear ways; our tools, maps and plans will need to be thorough but also fluid.

In the case of Jarret’s majestic Cologne concert, the story behind the story makes his decision to play, and so brilliantly, all the more extraordinary. His piano was, in fact, to all intents and purposes broken – out of tune, with worn-out keypads and foot pedals that thudded and stuck.

He arrived in the city, for an 11.30pm performance that was the only one the venue could make available, exhausted. He had such bad back ache after a 500-mile car journey that he took having exchanged his airline tickets for cash that he had to wear a brace. He was also hungry after the restaurant he visited botched his order and brought his food just as he had to leave.

Undaunted, Jarrett turned the piano’s shortcomings into strengths, dwelling on the undamaged keys of its middle register and using the foot pedals’ dull thuds as an accompanying percussive beat. Faced with an imperfect world, he improvised, adapted and – ultimately – shone. Having backed ourselves into the arguably the mother of all evolutionary corners, investors and committed sustainability professionals could all learn a thing or two from such virtuosity and mastery. We have no choice but to play the proverbial broken piano!

NB. Credit to economist Tim Harford for popularizing Jarrett’s story in his best-selling book Messy: How to be creative and resilient in a tidy-minded world.

S-10/24 NAMT-1836

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