The CEO of Rubicon Carbon and Northwestern trustee Thomas K. Montag ’82 MBA reflects on how a career in global banking led him to build a carbon credit management firm. His achievements include a headline-making Microsoft purchase of 18 million tonnes of high-quality carbon removal credits.
Before
The word “sustainability” may as well have not been in the dictionary when I was at Kellogg. But, the foundations I built in finance — thanks to analyzing M&A case studies as well as gaining exposure to world-class marketers, options pricing theory and accounting — have proven invaluable during every chapter of my career. So, when sustainable finance started to take center stage, those same fundamentals eventually proved to be just as valuable.
When I was at Goldman Sachs, I booked the company’s first derivative trade. At the time, derivatives were a new and complex frontier that lacked universal standards, much like the carbon markets I work in now. I believe that transforming these carbon markets into functioning and trusted systems requires similar foundational work to what was done when the derivatives market was first established.
As an Oregonian who grew up in nature, I have always remained interested in sustainability. When I was COO at Bank of America, I co-chaired the Sustainable Markets Committee, which introduced the first bank-issued benchmark-sized green bond and became a leader in the space.
This experience informed my decision to establish a senior fellowship in sustainable finance at Kellogg in 2022. Professionally, I owe Kellogg a great deal. I came in with no business background; I’d worked on loading docks before business school. Kellogg gave me exposure, structure and a world-class environment. It equipped me with the tools to build a meaningful career and a great life.
After
When I left the bank, I got in my car and literally drove across the country to the West Coast. I soon received a call from TPG about its Rise Funds, which were launched in 2016 and contain a significant allocation for climate-focused companies. They told me about plans to start a company focused on the voluntary carbon market and thought my experience with scaling financial products made me the perfect guy for the job.
What we've built at Rubicon Carbon is fundamentally different from other players in the space. Rather than simply brokering transactions, we've created diversified carbon credit portfolios, like our flagship Rubicon Carbon Tonne, that function similarly to ETFs or mutual funds. We hold these credits on our own balance sheet, conduct rigorous scientific due diligence through our seven-person science team and offer risk-adjusted products that ensure each retired credit corresponds as closely as possible to one tonne of actual carbon benefit.
Essentially, we’re bringing Wall Street discipline (minus the suits) to carbon markets. I now operate with much more flexibility than I ever have, and I’m meeting a completely different set of people. The people in this space have different motivations from those in traditional finance, and I’m learning from them all the time. There’s a genuine passion for creating positive environmental impact that’s energizing to be around.
Northwestern sparked my curiosity about everything, and I’m always trying to see the world through other people’s perspectives. In addition to serving on the board of Goldman Sachs, I also sit on the boards of NYU Langone Health, the Japan Society, the Hispanic Federation and the Deschutes Land Trust. I enjoy learning and always have a thirst for more.