‘The system was broken’: How The Nature Conservancy prospered but ran aground – POLITICO

‘The system was broken’: How The Nature Conservancy prospered but ran aground – POLITICO.

The Great Recession hadn’t yet found its bottom when Mark Tercek, an investment banker from Cleveland, left his job at Goldman Sachs in 2008 for another challenge: saving the planet from climate change and environmental destruction. And he was going to use his Wall Street experience to do it.

In the following decade, Tercek rang up big results as CEO of The Nature Conservancy, the world’s largest environmental organization: Revenues doubled, to more than $1 billion. Operations expanded to dozens more countries. Corporate partners like Coca-Cola, BP and JPMorgan Chase signed up to further the group’s work of protecting rain forests, coral reefs and other imperiled habitats.

But now that reign is in tatters. Tercek has stepped down, along with Conservancy President Brian McPeek and the heads of the group’s two largest programs, after an external report — first disclosed weeks ago by POLITICO — pried the lid off years of complaints about discriminatory treatment of employees, especially women.

That report offered just a glimpse at the problem, according to interviews with dozens of current and former Nature Conservancy staff members during the past month. They revealed an organization adrift, torn between a senior leadership that aggressively cultivates ties to global corporations and a core of ecology-minded staff members who chafe against the Wall Street culture, along with female employees’ unhappiness with a “good ole boys club” that hampers their advancement.

Even amid their relief and jubilation at the leaders’ departures, current and former employees express concern that the scandal will drive away key supporters and funders, jeopardizing the world’s most extensive network of land conservation projects. Several top donors declined to tell POLITICO whether they still support the Conservancy.

At the very least, veterans of the group say, the trauma is a distraction from an environmental mission in which The Nature Conservancy plays a distinctive role — one that harnesses support from activists, corporations and political leaders of both parties, despite the increasingly polarized climate debate in Washington. Those who withstood years of discrimination did so because they believed in the organization’s overall goals, and they hope it can adjust.

“I find it really sad because the Conservancy is a really great organization and it’s got a lot of really good people who are doing really good work,” said Susan Ruffo, who worked at The Nature Conservancy from 2006 to 2015 and served on the Obama White House’s Council on Environmental Quality. “I’m sorry that this is why they’re getting a lot of press right now, but I do also think there’s been a failure of leadership.”

Another former Nature Conservancy staffer, Mollie Marsh-Heine, called it no surprise that the #MeToo sexual harassment scandal that hit Hollywood, Wall Street and major news organizations would find its way to the big green group.

“When the Harvey Weinstein story broke, not only myself but many people still working at the Conservancy were like, ‘Whoa,’” said Marsh-Heine, a fundraiser for environmental causes. “I knew it would reach TNC eventually. It was just a matter of time.”

***

For The Nature Conservancy, tapping Tercek as its CEO was a natural extension of its strategy for wooing business partners and bringing in more donations.

That strategy had long brought the group both growth and criticism.

What had started in 1951 as a band of ecologists who united to stop development on a 60-acre forest in eastern New York has exploded into a 4,000-employee, studiously non-partisan organization that has helped protect more than 100 million acres globally. Since the 1970s, however, detractors have accused the Conservancy of being too cozy with its corporate donors, many of them polluters seeking to green up their reputations.

Nature Conservancy leaders have long called this criticism off-base, saying the money enables them to protect more lands and waters. Besides, they argue, it is better to work inside the boardrooms to improve companies’ practices than to wave picket signs outside the gate.

And Tercek saw the world changing, according to interviews with dozens of current and former staffers: Defending a plot of land in the Adirondacks or the Catskills matters, but those are piecemeal approaches in the face of the widespread environmental degradation accompanying global climate change.

So Tercek introduced a revised strategy: He brought in Wall Street-style data-crunching to measure the effectiveness of The Nature Conservancy’s projects, a change that mirrored the processes he’d used in his investment banking background. He appealed to the Conservancy’s corporate donors by harnessing market-driven formulas, including one called “impact investing,” to boost the group’s funding so it could work on a global scale.

He also helped recruit a board of directors that reflected the corporate approach, including Chinese billionaire and Alibaba CEO Jack Ma, BlackRock CEO Larry Fink, ex-Dow CEO Andrew Liveris, JPMorgan CEO of commercial banking Douglas Petno and former Hewlett-Packard CEO Meg Whitman.

Tercek set the tone for this new culture: The conservancy held corporate-style senior manager meetings at locales around the world and boasted an ever-expanding executive team with lofty salaries. (Tercek earned $819,000 in 2018, according to the organization’s Internal Revenue Service filings). It also began approving first-class flights for “key people” in certain circumstances beginning in the 2010 fiscal year, it told the IRS.

As the organization would come to discover, that culture also brought a management structure that, according to current and former staff, shrugged off the complaints of lower-level employees and women in senior roles.

Tercek, according to many of his underlings, didn’t much concern himself with employee morale. They described him as aloof and awkward, saying that for all his everyman, Rust Belt persona — marked by a flat, nasal Midwest accent — he bristled at criticism and didn’t form relationships with colleagues easily.

Tercek arrived a few years after McPeek joined the Conservancy from the influential consulting firm McKinsey & Co., and at a time when corporations were looking at stark changes in Washington. The newly elected Obama administration and the Democratic-controlled Congress were talking about taking on climate change with cap-and-trade legislation, which would offer economic incentives for oil companies, power utilities and other businesses to reduce their greenhouse gas production.

Ignoring the continued criticism about corporate “greenwashing,” Tercek forged even closer ties to big business.

“When Mark Tercek first started there was a real feeling like the private sector was the solution to a lot of things,” Ruffo said of the mood across the conservation movement and government. “For the Conservancy in particular that was maybe taken to extreme.”

Tercek inked partnerships with multinational corporations with long reputations as top environmental offenders: Coca-Cola, oil giant BP, mining heavyweight BHP Billiton and Dow Chemical. His signature program, NatureVest, leveraged his investment banking background and a partnership with JPMorgan Chase to drive $1 billion of private capital for conservation — including sustainable timber harvesting, carbon credits, a restructuring of island nations’ debt to expand marine conservation, and grants to promote more sustainable cattle grazing.

He hired former investment bankers and added alumni from big agriculture companies, such as Monsanto.

The Nature Conservancy was hardly the only big environmental group embracing the corporate approach at the time — the Sierra Club had taken criticism in 2007 for making an endorsement deal with Clorox, and later revealed that it had accepted $26 million in undisclosed donations from the natural gas industry.

But the TNC’s shift didn’t endear Tercek and McPeek to the scientists, ecologists and naturalists who staffed the group’s operations around the globe, a senior leader said.

“[They] sort of embodied and represented the change from place-by-place conservation to working at a global scale — like with the investment community, working with the insurance community,” one senior leader said of the pair, speaking anonymously to candidly discuss high-level personnel issues. “These things that were not strengths of the long-timers at TNC.”

Tercek and McPeek were “strong personalities,” the senior leader said, acknowledging that their management style had drawbacks. The leader said people felt forced to agree with Tercek, while McPeek insulated himself from conflicting viewpoints by surrounding himself with friends and allies, both men and women, from his days overseeing the Conservancy’s Denver office.

“Sometimes they missed good advice and they missed good opportunities to elevate other people,” the senior leader said. “But on the flip side, they did do some really powerful things for this organization.”

Their approach was undoubtedly good for business. The Nature Conservancy pulled in $547.2 million in revenue in 2009, Tercek’s first full year atop the organization. Last year, it generated just shy of $1.3 billion. It also expanded globally, jumping from operations in about 30 countries a decade ago to 72 now.

The executive team expanded with its finances. Just 18 people made up its top level in 2006, according to archives of the organization’s website. Thirteen years later it stood at 32 members.

Even as the executive team ballooned, women said they found it difficult to advance. Three high-ranking female officials departed during Tercek’s tenure with six-figure severance payments, according to the organization’s 990 filings. Others departed with significant “other compensation,” to the tune of hundreds of thousands of dollars.

Current and former staff said the exits were a result of maltreatment and gender discrimination, but the ex-officials declined to comment when contacted by POLITICO. Staffers who spoke with POLITICO said they knew of other senior-level women who had left because of sexism and a perception that women couldn’t advance beyond a certain point.

“There is a pattern of letting somewhat senior people go so that they won’t sue them,” said a former marketing staffer, who secured a “generous” severance when her position was eliminated, according to the staffer. The person added, “It was people who had an opinion or a point of view and you didn’t fall in line.”

Seeking to address those issues, Tercek added more women to the executive team and began a mentorship program for senior-level staff. But current and former staff said those steps didn’t dislodge an ingrained culture of men protecting other men, even those who had been the subject of complaints.

“It was not long after I had started working there that in a team retreat the phrase ‘penis protection plan’ was mentioned,” said former staffer Bessie Tassoulas, sharing a term that she said female employees used to describe the company culture.

“It was not the last time I heard that phrase,” added Tassoulas, who in May left the organization’s main offices in Virginia. “It was tossed around our headquarters in Arlington sort of flippantly as a joke, but there were undertones that this was a widely known practice.”

Senior manager meetings, held around the country, were often a source of problems, former staffers said. Hundreds of staff every year flew into the events, where alcohol was plentiful, meetings were often conducted over dinner, and former staffers reported seeing people dancing on tables and testing the boundaries of appropriate collegial relations.

Staffers around the world shared other unpleasant experiences — men reacting aggressively to women’s opinions or ignoring them; superiors isolating them when disagreements arose; senior male officials cutting female counterparts out of meetings or keeping them in the dark about projects and strategy. In a focus group about gender relations in the mid-2010s, one woman said she had gone to her manager to report harassment — only to have the manager turn the issue against her by asking: “What did you do?”

“I think women have always felt undervalued and underrepresented at TNC,” a female senior staffer said.

In one case, staff had for years complained to the highest levels of the organization about problems with Luis Solórzano, who led the group’s Caribbean office near Miami, said ex-staffers such as the office’s former science and conservation director, Vera Agostini.

But, as POLITICO reported last month, Solórzano remained in his post for years despite numerous formal and informal complaints accusing him of creating a divisive workplace, making uncomfortable comments to women and using racial and homophobic slurs. Solórzano and the organization parted ways June 10 as POLITICO questioned him and The Nature Conservancy about the allegations.

Solórzano did not respond to several attempts requesting comment about the complaints.

“There was a perception amongst staff that the [human relations] and ethics staff were focused on defending senior managers rather than the overall interest of the organization,” said Agostini, who is now the deputy director of fisheries and aquaculture at the United Nations Food and Agriculture Organization. “Putting it mildly, staff were reluctant to voice concerns. There was a sense that the system was broken.”

In another case, not previously reported, multiple people in the group’s Mexico office complained to ethics and compliance staffers that Juan Bezaury Creel, a top official there, had shoved a folder in the face of Leticia Gutiérrez Lorandi, an employee who was five months pregnant, and who stepped back just in time to avoid being struck. The incident occurred during a tense moment just before a May 2018 news conference, Gutiérrez told POLITICO, which verified her account by reviewing documents and email exchanges about the episode.

“I went to the bathroom. I cried,” Gutiérrez said in an interview. “The moment he shoved the folder in my face, I froze.”

She said she spent months following up with the organization’s ethics and compliance office before realizing that The Nature Conservancy wasn’t going to take action against Bezaury, even though other complaints had begun to mount. “The problem is the organization is normalizing these behaviors,” she said.

Bezaury said he remembers things differently, saying he had merely raised the folder in front of Gutiérrez’s face to create a physical barrier while he spoke with another colleague. In an email to POLITICO, he said TNC’s ethics and compliance staff had reprimanded him and warned him that retaliation would get him fired.

“Ms. Gutiérrez perceived that I acted in a physically aggressive way toward her during a press conference,” he said. “Under our institutional culture, perceived aggressions are equated to real aggressions.”

Gutiérrez said: “It’s not my perception. It happened.”

Bezaury left his full-time environmental policy director position in March; he is working part-time on contract with The Nature Conservancy until July 15 out of its Mexico City office space, he said by email.

The Nature Conservancy’s top brass had other evidence that many female employees felt stigmatized: In January, the organization’s leadership received the results from an internal study that laid out the problems in stark detail.

“Women repeatedly reference a ‘good ole boys club’ at TNC in the reasons that they see the ways in which men succeed as being different than for women,” said the findings, obtained by POLITICO, which were delivered in January to Tercek, McPeek and chief operating officer and general counsel Wisla Heneghan.

The study, by the Conservancy’s Gender Equity Advisory Council, found that male employees put the onus on their female colleagues for succeeding in The Nature Conservancy’s environment — saying women “must be able to navigate the male dominated workplace.” Women, meanwhile, felt they were better served “blending in or not standing out.”

Men and women both said culture change started with leadership, but women specifically called out male leaders while their male counterparts didn’t.

“CHANGE IS DESIRED AND EMPLOYEES BELIEVE IT STARTS WITH LEADERSHIP,” the council said, adding that “most believe these changes need to start at the top and permeate all of TNC.”

TNC’s leaders didn’t release the report to staff until late June after receiving pressure from members of the gender council, according to a staffer familiar with the process — and after POLITICO sought a copy.

“Some people have this feeling that it was sat on deliberately. I think it was more underprioritized,” the staffer told POLITICO. “I think that was poor management. They should have acted on it more quickly, but I don’t think it was malicious or intentional hiding.”

***

The problems boiled over in April, when the group hired the law firm McDermott Will & Emery to investigate its workplace culture after anonymous tweets accused McPeek of sexual harassment.

The report, released in late May, found one of the four sexual harassment allegations against McPeek to be “credible.” It also revealed deeper schisms: Women called The Nature Conservancy a difficult place to thrive; higher-ups routinely sided with those accused of misconduct; alcohol at work functions often fueled bad decisions.

On May 30, not even a full day after sending the report to staff, Tercek called a town hall to assure employees that top management would fix the problems.

Instead, he caused much of his staff to lose any remaining faith in him.

Addressing the gathering at the organization’s Arlington headquarters and livestreamed to its offices across the U.S. and worldwide, Tercek doubled down on his announcement the previous night that McPeek would stay on as president despite being the object of “he-said/she-said” accusations in the report. The report included accusations that a Conservancy leader identified as Executive 1 had kissed a subordinate against her will. Several current and former staffers familiar with the circumstances have told POLITICO that the executive was McPeek.

Tercek repeatedly referred to the incident as “the kiss thing,” according to a senior staffer who watched the town hall. Employees watched with scowls and arms crossed. A colleague asked Tercek whether he had confidence that McPeek could continue to lead the organization.

Tercek said yes. But it was the beginning of the end.

“It was like, holy shit, you could just hear it and see it, people losing confidence in a leader,” the senior staffer said.

The fallout was rapid. McPeek resigned the next day, on May 31, just after the departures of Mark Burget, who headed the group’s North American operations, and another executive, Kacky Andrews, who were accused of failing to disclose being in a relationship with each other. Tercek announced June 7 that he would resign — he left as of July 1.The group also tapped former Obama administration Interior Secretary Sally Jewell as interim CEO starting Sept. 3. The selection of Jewell, who joined The Nature Conservancy board last year, has raised optimism among people both inside and outside the organization. But they also don’t think she or the remaining top brass fully appreciate how much needs repairing.

“We’ve got some hard, hard work ahead of us,” said a current female senior staffer.

For one thing, current and former staff said, the failure to handle misconduct and harassment complaints has sown broad distrust in leaders who haven’t stepped down. Many of those officials will remain in their posts, according to an internal staff email Jewell sent June 18.

“The past few weeks have been a time of rapid change at The Nature Conservancy and recent changes to TNC leadership have surfaced trust and leadership issues that needed to be addressed,” a Nature Conservancy spokesperson said in a statement. “The first priority of our co-CEOs is to listen and craft a process that will regain trust and unlock staff’s full potential in service to TNC’s mission.”

Current and former employees also fear that the turmoil will harm fundraising, jeopardizing efforts the group’s conservation work. Burget and McPeek were considered two of the organization’s top fundraisers.

Some of the group’s big donors, such as the Hewlett Foundation, MacArthur Foundation and the Doris Duke Charitable Foundation, are sticking by The Nature Conservancy, saying they’re confident it followed proper procedures to address the organization’s issues. But Hewlett was “very concerned” about the reports of trouble and first made contact with TNC in April, spokesperson Liz Judge said.

Other corporate partners and funders were more non-committal. BP, Shell, Packard Foundation and JPMorgan declined to say whether they still support The Nature Conservancy.

“We are not commenting on this,” said Jason Ryan, a spokesperson for BP.

Politico · by Zack Colman · July 7, 2019

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