Jaycee Pribulsky: Operational Excellence

0:00What we're seeing is that, you know, the sustainability platform and our approach helps us win mandates because those technical capabilities are evaluated alongside our pricing, the structure of a certain deal, understanding the lens of what is financially material, what those risks are, what the potential opportunity for value creation is, is important.

0:31Welcome to the Future in Sound podcast. I'm your host, Jen Wilson. This is a podcast where we discuss people, planet, and profit. In each episode, we'll learn from world-leading experts who can help us see the future we want and our role in it.

0:57This is episode 48, Operational Excellence.

1:06J.C. Probolski is partner and chief sustainability officer at Apollo. She oversees the firm's cross-functional sustainability efforts, including strategy, reporting, climate initiatives, and employee engagement. Before joining Apollo, Jaycee was the Chief Sustainability Officer at Nike Inc., where she architected and executed the company's global sustainability strategy, spanning product innovation, operations, supply chain, governance, and corporate reputation. Over her tenure at Nike, she held senior leadership positions including leading global footwear sourcing and manufacturing operations, delivering more than 500 million units annually through a network of industry-leading suppliers.

1:52Prior to Nike, she held roles at Bloomberg, Citi, and Context, a global sustainability strategy consulting firm. Jaycee started her career in the federal government, at the Agency of International Development, and in the White House. And she's also previously served on the NY Stock Exchange Sustainability Advisory Council and on the Columbia Business School Women's Circle. Jaycee, it is great to have you on the Future in Sound podcast. Welcome. Thank you so much. Great to be here. Now, I've provided a bit of an overview on your background, but I'd love to hear it straight from you, JC. Do you mind sharing a short summary of your background for us?

2:32Happy to. And again, thanks for the introduction. I think, you know, what you heard are a couple different threads. And obviously, a long time ago in my career, I started in government and had this really interesting vantage point starting at the Agency for International Development. So really seeing and understanding international issues, but through that lens of really public and private partnership. And that really led me, quite frankly, to business. It led me to go to business school and really to understand more about the language of finance and how business engages. And I think if I had to kind of summarize the kinds of opportunities that I've looked for in my career, or quite frankly, have had the opportunity to lead.

3:12It's really about global organizations that are highly complex or matrixed and that are really operating at scale. And so I think that initial vantage point of working in government led me to, again, I've worked in the NGO sector and now in business. And I think when you think of those overlapping kind of Venn circles of the Venn diagram, I think the interesting thing for me is complexity and how do you navigate complexity regardless of the type of organization or institution that you're in. I've had a pretty long career now in business, obviously, at a number of different places, as you noted, but really happy to be here at Apollo.

3:52I joined Apollo last year as the chief sustainability officer. And I think it's an interesting moment as you think about where capital is going, how capital is going to really power the energy transition. And it's an interesting moment as well, broadly, in sustainability, because I think it's a real moment to think beyond aspiration. And I think aspiration got us to a certain point. And I think this next series of years, essentially, is really about operational excellence and execution. It's interesting. That matches broader goals and private equity generally. Talking about value creation, execution, et cetera.

4:29I have a follow-up question just on complexity and if there are rules of thumb that you apply. As you say, I'm just reflecting on the number of leaders that come onto this podcast who don't just come from a single area of focus or type of organization. And it's really interesting that you're drawing that distinction around, okay, it's interdisciplinary, but I really learned to navigate complexity. What are some of the rules of thumb that you apply when navigating complexity in this role and world? You know, I think there are a couple of different things that have struck me over my career. I think one of them is, you know, we tend to very much focus on kind of what's right in front of us.

5:09And one of the things that I try to look at are really how can we break the world down or break things down into frameworks? And so simple things like what's the situation, are there complications and how are you gonna resolve it, right? Are one thing. I also think, and I've always said this, in highly complex organizations, the part of the job is really being able to, what I say, is look left and look right, and then understand what those situations, what those issues are. But really, if you think about business, if you think about any role, a lot of it's about relationships. And if you put yourself in the seat of someone else, on your left, on your right, I'm using that metaphorically, but regardless across the organization, what are they after?

5:52What makes them tick? And how can you understand their perspective? Because if you start to understand their perspective, you can figure out what their strategy is, how you can influence, and what those implications are. I want to come back to influence in just a second because I think it relates really well to my next question. I've heard you speak about the importance of integration and integrating sustainability across Apollo. I'm just wondering, what do you mean by this? You know, maybe just to give a bit of context and background on the way that we work at Apollo as well. And so when we think of sustainability, it's very much embedded, if you will, and integrated across asset class.

6:31And so, you know, for context, Apollo has trillion dollars of assets under management and operates both in credit and in equity. And so our sustainability team really mirrors that. So we have teams that are aligned with our credit teams and with our equity teams. Again, that integration and that notion of embedding it really, I'll give you examples and maybe walk through both sides of the equation. So when you think about on the credit side, again, this is really working through and with our investment and deal teams to bring sustainability to life. But it's really the notion of taking sustainability attributes, and that's across the environment and social and governance spectrum, but really understanding what those issues are to help strengthen investment decision making.

7:16Right. And so it's informing pricing. It's informing deal structure. How are you looking at these issues through the lens of what is financially material? And then how are those sustainability considerations actually, you know, you're looking at that alongside the financial and legal diligence. So it's really embedded and integrated and part of the process. I'll give you some numbers because I think it's important to dimensionalize the volume and the scale, particularly on the credit side. Last year, we did over 9 ,000 what we call sustainability risk assessments. And what that means is, again, bringing those issues across environment, social, and governance and integrating them into the investment diligence on the credit side.

7:57When we talk about equity, for us, that really manifests across the entire life cycle of an investment. So, of course, it starts with upfront diligence. How are you looking, again, at those issues? But then from an equity perspective, we have the opportunity over the hold period of a company that we've made an investment in to also be able to understand and operationalize sustainability. And so, for example, you know, through that lens, we've set a decarbonization target. So the real goal is to decrease median carbon intensity 15 percent over the course of a hold period for our flagship portfolio equity companies, portfolio companies across equity.

8:37And to date, we're running ahead of that, which is great as well. And so as we think about that, it's not just the decarbonization metric, which is so important, but then translating that into the financial outcomes. So when we look at that, we've actually been able to capture a run rate EBITDA improvement of over$100 million. And also we've been able to capture$52 million in risk reduction. So again, the quantification of that is important over the hold period. And then when we get to exit on the equity side, there's opportunity to actually be able to capture value on exit as well. So when we say integration, it really is across the lifecycle of the investment to help us improve durability.

9:19So hopefully that gives some example. Absolutely. And also this coming back to your earlier point about, you know, managing complexity by putting yourself in the shoes of others and those that you're working with. I'm interested in, you know, feel free to use a Porco example or general examples. Like what practical steps do you take to achieve this with a company who's coming into the Apollo portfolio for the first time? Like, what does that look and feel like? And how is that different than just sustainability being an add on? Yep. And again, you know, I talked a little bit about the fact that it starts very much from an upfront diligence perspective.

9:55And so when we look at the companies that we're going to make an investment in, we really understand what's their current approach to these issues? How are they managing them? What does that look like? And then as they come on, it's really understanding, okay, how are they tracking as we, again, as we've set that median carbon intensity reduction goal, how are they tracking against that? What steps, what processes did they have in place? But importantly, you know, we really use the broader network of our portfolio companies as well to be able to share best practices. And so I was in London last week, so I was using some examples that were very London and UK specific, but I'll give you one.

10:36One of our portfolio companies is the Restaurant Group, which owns Wagamama. And so some interesting examples there, because what Wagamama has been able to do is really understand energy reduction opportunities. And so as they're bringing new sites online, they're really focused on decreasing their overall energy footprint. So being able to source renewables, etc., which is great. But one of the things that they were also able to look across is, okay, where's the majority of their emissions? And it's in scope three. And so they've really focused on how do they work with their suppliers to understand sourcing more broadly.

11:12And to date, 90 % of their strategic suppliers are now really engaged in and understand how to reduce their carbon intensity as well. So it's been those are some some places and spaces where we've worked really strategically with one portfolio company to drive results. Those of us tuning into this who love Wagamama will think about that next time we walk into a Wagamama. That's a great example, JC. And you have a unique vantage point as a CSO with deep operational experience. I was struck reading your bio in your prior role, delivering more than 500 million units annually through a network of industry leading suppliers.

11:50now focusing on your role at Apollo. How do you use that background to really drive true sustainability transformation looking forward? So what, like, again, managing complexity, you've got a big portfolio for those tuning in who are saying, okay, how does JC do it? What are the ways? There are only so many hands. How do you really go from just talking points to seeing real change? Yeah, I mean, again, I think it, look, we have an incredible team. And so I really want to give a shout out to the scope and breadth of our team here at Apollo. Because again, as we look at the work that we're doing across asset class, it really comes down to the team.

12:26And maybe I'll give you a little bit of background, not just on my background, but on the teams. And so again, if we start with equity this time, the folks on the team that we call responsible and sustainable operations really do have that operational expertise. They've worked for companies like Amazon and Coca-Cola, et cetera, right? And so understand how, what best in class looks like from an operational perspective. And so I think that vantage point, not only mine, but theirs is super important as we work with our portfolio companies. On the credit side, you know, again, a shout out to them and just a little bit on their expertise.

13:01You know, we have investment professionals, research professionals who can bring the scope and breadth of their experience to bear as well. And so I think, you know, we've moved, as I said, from this moment where I think sustainability is about aspiration. Aspiration is important. I think it got us to an important point, but the notion of operational excellence needs to manifest through, I think, long-term value creation. And as I alluded to, I mean, I think that is the strength. Apollo takes a long-term view from an investment perspective. And so I think being able to align and measure the quantitative impacts of our work and really being able to translate that, you know, quite frankly, from an operational metric, from a financial metric to teams that are really working through and with our portfolio companies, for example, I think is a key differentiator for us.

13:55And one of the things that we have really done in the last, you know, again, I've been at Apollo since last year, but I think one of the things that we've really focused on. And as you look across our sustainability strategy, that embedding and integration, we've done incredible work. We want to continue to do that because that, again, is really about long-term investment durability. And we do that by providing insights and data to our investment teams. I don't look at it as sustainability data. It's another data set to make better and informed decisions. And I think that's really important, again, as we think about how to operationalize this work.

14:36I also think, you know, so that's our first pillar of our strategy. The second is really around firm level operational excellence. And, you know, we published our sustainability report last week. That's our voluntary report, which is great. We also have quite a bit of mandatory reporting. And so I think the combination of reporting and bringing that to life is important. We are also sitting on a lot of really interesting insights and data. And so one of the things that we're also doing, as I said, is to try to serve up those insights internally for investment teams, whether that's through a thematic lens from a research perspective, whether that's on certain issues, whether it's data centers or other things, being able to serve up those insights to help inform, not deal by deal, which is also important, but more broadly on thematics and topical research.

15:24I think that's an engine that we're building, which is important. And then finally, thought leadership. And that thought leadership pillar is really internal. How do we continue to educate internally on the work of the team, but then also externally as well? So that's our strategy. And the operational piece is first and foremost how we bring this work to life. On the areas of expertise, I'd love to talk a little bit about AI. And just before we get there, one of the things, so it was interesting listening to you speak about this is a, We're talking not just about sustainability data, but a data set that helps to inform decisions.

16:01I remember my last role, I was CFO of a group of privately held infrastructure companies. And it was a time when the role of the CFO was really changing from going from being a controller to a VP to a CFO. it was more not just about subject matter expertise, but it was about how do we apply data to inform the strategy and work more closely with the CFO to see around the corner rather than look in the rear view mirror. And it's interesting, it strikes me that as you're describing how we look at sustainability data, it's not so far from that. And I wonder if there's anything else, you have a ton of experience connecting with CEOs, CFOs, any other advice for listeners on And how to connect with CEOs and CFOs to really energize them towards some of these topics?

16:48I mean, I think, you know, maybe I'll give some specific examples. I think, you know, when we look at, again, our platform, our sustainability platform, I think Paula is obviously focused on complex long duration investments, right? And as we think about that, the notion of engaging, again, with, I'll just say, other stakeholders, I think the value proposition from a sustainability perspective is how do we identify those risks early? Again, that deep industry expertise and really understanding how sustainability capabilities can help influence and provide expertise from a capital perspective. And so, you know, I think what we're seeing is that, you know, the sustainability platform and our approach helps us win mandates because those technical capabilities are evaluated alongside our pricing, the structure of a certain deal, understanding the lens of what is financially material, what those risks are, what the potential opportunity for value creation is, is important.

17:53And I'll give you some examples. One of the places where we've been able to, I think, differentiate is really understanding the energy transition and where there's opportunity from a capital deployment perspective. And so we've been able to look at issues from physical climate risk to workforce and governance considerations and how that informs underwriting, how that informs long-term asset performance. And so, you know, an example for us would be Orsted. Orsted, you know, chose to partner with Apollo on, again, I'll use a UK example, on Horn C3. And Horn C3, when it's fully operational, will be the world's largest offshore wind farm.

18:37And it's expected to power, I believe it's more than 3 million UK homes with renewable electricity, again, when it's operational. And so our Apollo managed funds committed$6.5 billion to acquire a 50 % stake in Horn C3. You know, part of it obviously is that long-term, long-dated comprehensive capital solution. But we really see that Apollo's differentiated approach from a sustainability perspective, again, that expertise, understanding what the risks are, being able to dimensionalize that helps us win mandates. So I think that maybe speaks the language of how to influence and how to engage with critical stakeholders across the organization.

19:18Help them deal with their top priority challenges. Indeed. Yeah. Indeed. And again, maybe I'll close that piece with just, you know, I do think it's important when we look at the energy transition and those opportunities, you know, we made$100 billion commitment to deploy capital against the energy transition. And to date, we've deployed$86 billion against that. And so again, the Orsted deal and deals like that really represent, I think, a differentiator for Apollo in that long-dated capital perspective.

20:10sits at the heart of your value creation strategy. We also work on some of the more complex challenges our clients are navigating right now, including how to approach AI responsibly as it becomes part of how we all operate. Ultimately, we help you do sustainability in a way that actually matters for your business and your investors. If that sounds interesting, come find us at re.co.com. All right, back to the conversation. a slight you know pivot towards you know what is very much the zeitgeist at the moment ai ai is moving ai is moving at lightning speed and um you know there's tons of opportunity and you know at the same time i'm really interested in getting your perspective as a leading cso how do you think about promising applications of ai and you know what dimensions of ai governance do you think are important not to overlook?

21:09Yeah. I mean, AI is, again, I said I was in London last week for Climate Week. AI is certainly, I think, a thread through most conversations, which is interesting. I think we're at an interesting moment for both the opportunity and some of the potential risks or potential challenges. But I think one of the things for us is that there's huge opportunity as we look at AI and how do we scale our work, right? And I talked about scale as we looked at credit and that dimension. And so the amount of analysis that we're doing is significant, not only across credit, but if you think about it across equity and our portfolio analysis as well.

21:48And so I do think AI is powerful for us in helping us continue to drive that scale, get the data and be able to support our continued efforts. We're also seeing, I would say from a team perspective that AI is taking work that was highly manual previously and helping us automate it. And what that's doing, I think is providing time and energy and space for the team to be able to devote resource to, again, some of the things that I was talking about, whether that's short form research that can help inform investment teams, whether that's longer form research on deeper subjects. So I do think it's quite powerful, but let's also talk about it from an investment perspective, because again, when you think about Apollo as a fully integrated platform, meaning we have investment grade credit, we've got structured credit, private equity, et cetera, data centers.

22:39And I think the opportunity is really different depending on the capital pool. And so, you know, when we look at AI and the investable opportunities, you know, we also have to focus and obviously there's a lot when we think about risk. And so So, you know, one of the things and one of the areas that we're really focused on is how can we be really disciplined on what those potential risks are from an AI investment perspective and also understand whether it's climate and physical risk, whether it's water and potential ecosystem approach from a water perspective, certainly governance, etc. All of those issues are really at play as we think about upfront diligence.

23:19But again, we think that it's certainly a significant opportunity as we think about what we call the global industrial renaissance at Apollo from an investment thesis and investment standpoint, because it's both financing infrastructure that enables AI, but it's also, as I said, it's really improving not only our productivity at Apollo, but we're also seeing that manifest across our portfolio companies as well. I'm sure many who are listening are wondering, you know, how, what shaped how JC is thinking? Like, how did she climb to this level? Like, what is it that she reads? What's the secret sauce?

23:55And so I'm going to ask you to share your secret sauce, JC. So I know you're probably thinking, no, no, I'm just a regular person who has a view on sustainability. The answer is no, that's not true. And I'd love to hear what you read or listen to in order to stay up to speed. podcasts, newsletters, et cetera. Now you can push back on what I just said. Oh, it's good. I mean, I think, look, I think, uh, first of all, I appreciate it. You're very kind. Um, you know, I think we're all inundated with information, right? And I have found that I like to consume podcasts. I definitely am a podcast listener, if you will.

24:33Um, I also really like, uh, and I think we're at an interesting moment where if you only read headlines, you would really miss the signals. And so where is the data that actually shows the signals? And I'll give you a couple examples, and then I'll maybe talk about a couple things that I pay attention to. You know, we very much are focused on differentiating what the signals are, where the capital is going, right? And so, you know, as again, we think about the global energy transition, there's$2.3 trillion deployed in 2025, and that's up 8 % year over year. And so when you look at that number, when you look at$30 trillion of potential CapEx and power and utilities over the next 10 years, those type of signals are important.

25:18And so where do I get that information and insight? Again, I listen or I look at things like heat map news, which is really doing deep dives and analysis on the energy transition, trying to dimensionalize the data, unpack it. I find that really interesting. Again, somebody coming out of the UK is Max Aitken. I definitely subscribe to his insights and information and newsletter. He's quite cheeky, which I like as well, but always really through the lens of data on energy and where globally we're seeing the energy transition play out. From a podcast perspective, I listen to a lot of different podcasts.

25:57I'm a pretty significant consumer of, I would say, news generally. And so whether it's New York Times from the daily perspective. I also really like to understand where things are happening from Bloomberg New Energy Finance, again, provides great data and great insights, both listening and being able to read their information as well. And so, I mean, those are a couple places and spaces. I think what's important to me is to think about multidimensionally, where you can get insights and information, not only on just where things are going from a sustainability perspective, but what the implications are more broadly from a business perspective.

26:39And so I try to dip in and out of whether it's Harvard Business Review or other things in that regard, which both brings together, I think, leadership capabilities, which are important, but then more interestingly on innovation and where business is headed as well. So interdisciplinary, sort of circling back to the beginning of our conversation, and different lenses so we can connect the dots between commercial and sustainability, it sounds like. Always. And my final question is one of my favorite questions. So I always ask it because I get to run the podcast. It's great. If you had to name one book that's most shaped the way you think, what book would that be and why?