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SDAC CEO breaks down having a 'sustainable focus with market leading returns'

Nicole Neeman Brady, Sustainable Development Acquisition Corp. CEO, joins Yahoo Finance’s Julie Hyman to discuss how the public benefit corporation is addressing global challenges.

Video Transcript

JULIE HYMAN: Well, we have been talking about SPACs and the boom that we have seen in that investment vehicle and the fact that we have seen them come in, really, all kinds of shapes and sizes and led by all kinds of different investors at this point. Let's talk about one that is working on becoming the first public benefit corporation and what that means. Nicole Neeman Brady is joining us now. She is CEO of Sustainable Acquisition Development Corp, also known as SDAC.

Nicole, thank you so much for being here. So public benefit corporation, for those who are not available with it-- familiar with it-- excuse me-- or getting a B Corp certification, it essentially means from a legal perspective that you can put the interests of broader stakeholders, the community, the environment, et cetera, ahead of shareholders in the corporation without legal liability. Why did you decide to structure it that way? It's still relatively rare in, particularly, American corporations.

NICOLE NEEMAN BRADY: Yeah, no, to be clear, it's balancing the profit with the purpose. So a public benefit corporation is a focus on the-- the public as a great-- greater good. But really, the-- a B Corp is, you know, the preeminent independent certification and validation that a company is adhering and delivering on rigorous environmental and social and accountability and transparency standards. And frankly, that is how we should want all companies to really be if we're going to have a sustainable future. These measures we found, from our track record at Renewable Resources Group and Capricorn Investment Group, that you can have this kind of focus and still achieve market-leading returns.

JULIE HYMAN: And as you mentioned, your background is in renewable energy. We see your wind turbine there, the little model behind you. Is that the kind of target that you're looking for? I know that you have sort of a broader mandate of the kinds of targets you're potentially looking at. But are you sort of gravitating towards renewables since that is your background?

NICOLE NEEMAN BRADY: Actually, our background is in all the areas that our SPAC focuses on, on water, food and agriculture, and renewable energy. And you know, there's been a lot of SPACs that have come out in the renewable energy sector, and frankly, there's a lot of focus in that space. But we're targeting a little bit of a different angle.

Our SPAC is focused on mission-driven companies that are in those sectors but are also addressing the UN Sustainable Development Goals, which is a nearly $12 trillion opportunity. And it's focusing on companies that are disrupting the status quo, which really results from thinking about how climate change is impacting everything that we do and we need to be more efficient with what we have. So our focus is really on subsectors that think about how we're going to live and how we're going to survive in a much more sustainable future with what we have.

JULIE HYMAN: And so are you focused on companies that already would have the public benefit certification or you're open to other companies that you can then sort of shepherd through that process?

NICOLE NEEMAN BRADY: Yeah, no, that's exactly right, the latter. So we're going to be looking at a broad range of companies, but ideally, the company either is already a B Corp or we can set them on their path to be one. Because really, that is an important facet for any company going forward. And so we hope to-- to implement that kind of change. Given our track records as to impact focus firms for nearly 15 years, both being B Corps and having worked through companies through this process, we really feel that it's beneficial both for the public and the employees, but also for our returns.

JULIE HYMAN: And so you've obviously aware of the sort of broader conversation around SPACs. We were having a conversation to that effect earlier. What are you finding in terms of valuations with this becoming an already crowded, it feels like, and increasingly so crowded field in terms of SPACs competing for different assets?

NICOLE NEEMAN BRADY: I can't really speculate on other company valuations, because I don't know the specifics of those. But I can appreciate the concern. And our track records as firms focus on real value and how we can achieve growth.

And you know, the conversation earlier really did talk about the fact that there are these-- these companies are coming forth with these incredible growth trajectories. Well, we have the operational and investment expertise to really demonstrate and figure out which ones are really publicity and which ones actually have fundamentals that can-- can achieve those goals. So we feel well-positioned to figure that out.

JULIE HYMAN: Yeah, I was just going to say that's something, definitely, that we have sort of grappled with when we are talking to many of these companies. Because, as you know, when you come public as a SPAC, your acquisition in other words, you know, you can have forward projections, and it's difficult to know if those forward projections are going to be realized. So from an investor perspective, meaning a stock investor perspective, what kind of questions do you think people should be asking in order to sort of get to that?

NICOLE NEEMAN BRADY: Yeah, a lot of it is around diligence. I think that was a big conversation that occurred earlier, as well, in your segment on how we need to focus on really understanding the businesses that are underlying it. You know, the sectors that we focus in, we really do know it. We have team-- a global team that includes hydrologists and agronomists, so we can really get down into the technical details and understand things. And I think that's a critical component of knowing whether a company really is just hype or if there's something underlying there.

JULIE HYMAN: Well, Nicole, thank you for being here. Stay in touch so we can talk about it when you do find a target. Nicole Neeman Brady is CEO of SDAC, the Sustainable Acquisition Development Corporation. Appreciate your time today.