Mary Wenzel interviews Puon Penn about recent trip to China

By Mary Wenzel
May 15th, 2014
Puon Penn

Puon Penn

Earlier this month, I was able to sit down with an esteemed colleague Puon Penn, co-head of Wells Fargo’s Technology & Venture Banking business, to discuss the future of our company with a group of community development, government, communications and philanthropy executives. Puon recently returned from a business trip to China and had some interesting insights I thought Environmental Forum readers would enjoy hearing about. Keep reading to hear what Puon had to say.

Mary:  Puon, when you first started at Wells Fargo, we did not lend to wind and solar projects like we do now. So much has changed since then. What is the next project on the horizon?

Puon:  I was a quantitative finance major in school, so I have a tendency to follow the math whenever I look at opportunities. I look for opportunities in inevitabilities. Wells Fargo engages in long-term business banking relationships — what we like to call “relationship banking.” When thinking about long-term relationships, our company must continually think about factors affecting us and how changes affect our customers and our business.

When we start following the math, we can see that population demographics in this country and around the world are rapidly changing. If we look at population growth, we know that our population grew to 7 billion people from the 1800s to now. What enabled that population growth? Something happened — and that something is “innovation”. We constantly innovate. And, innovation requires resources, which are finite.

Throughout history, we have faced the challenge of depleting resources. It is not just about energy anymore. Water is now a much bigger issue. Due to droughts and growing populations, sustainable agriculture which requires large reserves of clean water, is a pressing concern for Wells Fargo, as we are the No. 1 agricultural lender in the country. If our customers do not find sustainable solutions to these problems, we will find ourselves out of business, too. Our population will grow from 7 to 9 billion in the next 35 years. We are just beginning.

Mary:  What did you observe with regard to changing demographics, sustainability and population shifts during your trip to China?

Puon:  So often we hear: “The urgent is the enemy of the important.” Most of us assume the way things are today is the way things will be in 10 years. We know from our own history that this is never the case. The biggest human migration in history is happening right now. Right now billions of people are on the move. China has set an aggressive goal to move 150 million people from countryside to its cities within the next five and a half years. And, I have no doubt China will meet its goal. A population shift of this magnitude will dramatically change how we will feed, clothe and house a population of this size. We already are seeing shifts in the importation of commodities. Just a few years ago, China was a major producer and exporter of corn.

Today, they are one of the largest importers of corn and soy and other basic agricultural commodities. Many of their citizens have gone from consuming 1,800 calories each day to now consuming 2,400 calories a day versus nearly 3,400 calories for the average American. And, they are consuming different kinds of calories — more animal proteins – than they traditionally have in the past. We must consider how we are feeding large populations. Currently, in China there is not enough feed for animals. And, today there is a steady fleet of 24 ships unloading shipments of soybeans every day. This type of shift is affecting farmers all over the world. The question remains:  How do we change to meet the needs of our customers?

We are trying new things that our customers need. Our original business model of running stage coaches lasted barely 10 years. Our offerings changed with the advent of trains and telegraphs. This is just a small example. All along our company’s history, we have had a track record of innovation. We must keep that in mind as we think about changing needs of our customer.

Mary:  In communities where the need for economic development is stuck in cycles of poverty, what are the ways to help our customers?

Puon:  Sustainability is a business imperative for Wells Fargo — our focus is on helping our customers be successful, helping our communities be more resilient, and being efficient and innovative in our own operations. This is why, since 2005, we have provided more than $28 billion in financing to environmental business opportunities, including being the leading lender to “green” commercial real estate, and one of the leading investors in wind and solar projects ($12 billion over the past 2 years since setting new $30 billion commitment). We also want to bank companies that are at the leading edge of this transition. And, have created a commercial banking group dedicated to clean technology. We also are making strategic grants and are on track to donate $100 million to environmental nonprofits dedicated to building more sustainable communities.

Mary:  Last year there were seven weather-related events that each caused over $1 billion in damage. Communities with least amount of resources were affected the most. How can we help?

Puon:  We need to find ways to make our communities more resilient. In most instances the underserved have little to no access to what the most fortunate have. These communities are more challenged, paying more for resources, such as basic utilities and services. In the more challenged communities, there is less of a strategic long-term focus, because you have to stay focused on more pressing immediate needs — usually the next paycheck.

Again, I have to reiterate that sustainability is a business imperative for Wells Fargo — our focus is on helping ALL our customers be successful and ALL our communities be more resilient.

Mary:  Thank you, Puon. What is next for you?

Puon:  Too many exciting things to mention, but I have an overdue fishing trip planned with my wife and kids.

If you have a question for Puon, please feel free to comment or ask.

Tags:   climate   energy   food   innovation   solar   
Mary Wenzel

Mary Wenzel

Mary is head of Wells Fargo’s Environmental Affairs and is responsible for developing strategies and driving organizational change in support of the company’s sustainability efforts. Her areas of focus include environmental philanthropy, operational sustainability, environmental and social risk management, clean technology financing and lending, integration of environmental policies and process into company operations, community development initiatives and customer, and team member engagement, among others.

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