Stuart Bernstein
2014 Business Leader of the Year

Green Power Player

Stuart Bernstein, BS 86, of Goldman Sachs, shakes up investment banking with his passion for clean energy and the environment

By Edmund Andrews

Imagine it’s 2010 and you’re a top investment banker on Wall Street. You’re actually a banker’s banker, the go-to guy for giant financial institutions when they need money. You’ve just helped them raise $170 billion after the worst financial crisis of the past century.

But now you’re 46 and thinking about a new chapter in your career and life. You’re passionate about promoting clean energy and slowing climate change. Not only that, you want to design and build an environmentally friendly, efficient home that will be a net-zero user of energy and a model for others to follow.

That, in a nutshell, was the situation for Stuart Bernstein, BS 86. He had excelled as Goldman Sachs’ top capital markets banker for financial institutions, but he was restless.

Many Goldman partners retire from investment banking at similar points in their careers. Some go into business for themselves. Others go into public service, philanthropy, or academia. Bernstein had his own ideas. Clean energy, he believed, was the future.

It would be hard to exaggerate how far-fetched this seemed at the time. Bernstein would be jumping into an industry in which he had no professional experience—and from which investors had been fleeing. Solar-panel companies were going bankrupt thanks to brutal price competition from Chinese manufacturers. Biofuels and other clean-tech sectors were floundering too, the fracking boom having sunk natural gas prices to their lowest levels in years. Most investment banks were either cutting back or shutting down their clean-tech businesses.

But Bernstein rejected the conventional gloom. He had written a white paper on his own time that showed that developing cost-competitive renewable energy could be a way to slow global warming caused by fossil-fuel consumption as advancing technologies and economies of scale reduced prices. He even found a silver lining—lower panel prices made rooftop solar and large-scale solar projects more competitive against fossil fuel alternatives, thereby accelerating adoption.

“It seemed apparent to me that [preserving the environment] was not only one of the greatest challenges of our generation but of many generations.’’

For Bernstein, this was also a personal mission. He loved mountaineering and mountain biking and had been a member of the Sierra Club and the American Alpine Club for more than two decades. He cared deeply about preserving the environment and served on the advisory board for the Natural Resources Defense Council’s Center for Market Innovation.

“It seemed apparent to me that this was not only one of the greatest challenges of our generation but of many generations,’’ he says. “It was existential. I thought if I could apply my skills to the problem, I would be doing my small part to make things better.”

Stuart Bernstein

Stuart Bernstein, BS 86, on Mount Shuksan in Washington state. Bernstein is a skilled mountaineer and has been a member of the American Alpine Club for more than two decades.

As it turned out, Goldman Sachs liked his ideas so much that the firm asked if he would consider creating and leading a clean technology and renewables business for them. Goldman even put its own capital into a clean-tech investment fund.

Today, Bernstein’s unconventional shift is a proven success. He has been the lead investment banker for two of the nation’s most celebrated clean-tech companies: Tesla, Elon Musk’s electric car manufacturer, and SolarCity, which finances and installs solar-power arrays. Goldman Sachs has dominated clean-tech deal making ever since he arrived in Palo Alto. He is also leading Goldman’s investments in venture-stage clean-tech companies, among many other activities.

“I’ve never felt I had to do what everyone else was doing,’’ Bernstein says. “In fact, when everybody else is doing the same thing, it sets off a red flag in my mind.”

This fall, the Haas School of Business is honoring Bernstein as its Business Leader of the Year. That puts him in the company of Janet Yellen, Haas professor emeritus and now chair of the Federal Reserve; Paul Otellini, MBA 74, the former CEO of Intel; and Shantanu Narayen, MBA 93, CEO of Adobe Systems.

Bernstein is intensely committed to Berkeley and Haas. As a new Goldman Sachs employee, he learned that the firm, like many investment banks at that time, had never recruited a Cal graduate before, but Bernstein lobbied to change that. He flew out to Berkeley on his own dime to interview students to prove they would be great candidates. Today, Goldman actively recruits on campus and employs more than 200 Berkeley and Haas graduates. In 2007, Bernstein joined the Haas School Board and in 2009 delivered the school’s undergraduate commencement speech. In 2012, he and his wife, Marcella, provided a major contribution to establish the Berkeley Energy and Climate Institute—a hub to coordinate the university’s energy and climate efforts.

Challenging the Status Quo with Every Step

Joining Wall Street’s biggest investment bank after earning a bachelor’s degree in business might not seem like bucking convention. But when Bernstein graduated in 1986, Wall Street and Berkeley might as well have been on different planets. The big investment banks recruited from East Coast Ivy League schools, and most Berkeley graduates stayed on the West Coast. But Bernstein had become fascinated by economics and finance. Though he had no contacts, he secured an interview and persuaded the company to hire him as an analyst.

Two years later, Goldman wanted to promote Bernstein to an associate, an unusual move at that time. Once again, however, Bernstein had other ideas. He turned down the great offer and left his job to pursue two degrees at Harvard: an MBA at the business school and a Master in Public Administration at the Kennedy School.

One Goldman executive warned Bernstein that he would never make up for the money he could have earned during those years on Wall Street. Many of his classmates at Harvard were perplexed as well. “The MBA students thought I was a socialist for going to the Kennedy School, and the people at the Kennedy School thought the Harvard MBA students were capitalist pigs,” he recalls.

Bernstein thrived in both programs, taking both second-year classes simultaneously and graduating a year early. After graduating, he returned to Goldman and steadily rose to its senior ranks. As the housing and mortgage markets became engulfed in manic speculation and reckless leverage, Bernstein saw a crisis in the making.

“What happens when you see a skyline full of construction cranes?” he asks. “You know that it’s not going to end well. Business cycles last eight to ten years, and we keep making the same mistakes about every seven years.” Ignoring Goldman’s competitors—and even some critics within Goldman—Bernstein started turning down deals.

When the financial crisis hit in 2008 and banks, insurance companies, and other financial institutions desperately needed to recapitalize, Bernstein was prepared. He led Visa’s $19.7 billion initial public offering—the biggest IPO in history at that point—and raised billions for other institutions, including Goldman Sachs.

But by early 2010, after a quarter-century of investment banking, Bernstein wanted to focus his efforts on mitigating climate change.

In California, he quickly became intrigued by electric cars. Nobody had launched a successful new car company of any kind, let alone an electric-car company, in almost 70 years. Electric vehicles had been unattractive and poorly designed. They couldn’t go far on a single charge, and there wasn’t an infrastructure for recharging batteries.

But Bernstein had seen Elon Musk’s Tesla, with its sleek style, luxury-sports-car performance, and advanced engineering. He’d scrutinized the economics and recognized Musk’s mastery of both the fine details and the big picture. He worked on Tesla’s initial public stock offering and then led almost $4 billion worth of subsequent financings. Tesla shares have soared from $17 in June 2010 to more than $230 as of press time.

The Ultimate in Green Living

For evidence of Bernstein’s personal passion for clean energy, look no further than the home he and Marcella designed from the ground up using passive design techniques, which use building location and orientation relative to the sun, window design, thermal mass, shading, and ventilation to control temperature and air quality. Their goal: to build a net-zero energy use, sustainable house using natural and healthy components at no cost premium. And not an uncomfortable or austere house requiring aesthetic compromises either. One with a beautiful design, comfortable temperatures, fresh air, state-of-the-art appliances, and enjoyable entertainment systems. They wanted to prove that you could have it all.


The Bernstein net-zero home lit by 3-watt LED bulbs. When every exterior light is illuminated, the house uses only 200 watts. Houses using conventional technology use 30 times as much energy. All of the plants are drought tolerant and over time will expand to cover more of the pebbles.

To achieve his vision, Bernstein scoured the globe for technical information and ideas on every conceivable aspect of clean energy and efficiency—LED lighting with the best light quality, electric heat pumps, innovative HVAC systems, you name it.

No detail was too small. Anticipating droughts, the house employs passive greywater systems to irrigate the landscape. Not only does the house reuse washing machine and shower water for irrigation, but it reuses the heat from shower water to pre-heat incoming water thereby reducing water waste and the cost of hot-water heating by up to 40 percent.

“The hardest part was to convince sub-contractors that we had to do everything differently than they had been doing it for decades,” Bernstein says.

He was an unusual taskmaster. He required his general contractor to take a five-day course to become certified in passive-home construction. Each sub-contractor was given a tutorial on the design philosophy. To minimize wasted materials, he prohibited contractors from using dumpsters that filled landfills and instructed them to put construction waste in a “pile of shame” in the yard. The workers enjoyed figuring out ways to reduce, reuse, and recycle almost everything. Only at the end of the project was the small pile removed.

“I’ve never felt I had to do what everyone else was doing. In fact, when everybody else is doing the same thing, it sets off a red flag in my mind.”

Bernstein now measures the home’s energy efficiency down to almost every circuit, tracking “phantom” energy loss from appliances and determining where they can further reduce their energy consumption. He was horrified to discover that his old plasma TV was consuming 20 watts in stand-by mode.

“If you don’t monitor everything, you won’t change behavior,’’ Bernstein explains. Bernstein documented the whole project on his blog, Net Zero House. This summer, the home achieved key milestones including net-zero energy consumption, Passive House certification, and LEED Platinum certification. In fact, the house is operating so efficiently it can also power two electric vehicles.

And it didn’t cost more to build. It was time-consuming to figure out, but the total cost was no different than for a traditional house of similar fit and finish.

Bernstein says his home offers a model that’s not hard for others to replicate. “We learned from others and our goal is that people can benefit from our work, including the mistakes we made,’’ he says.

Sitting at an outdoor café in Palo Alto on a sunny weekday morning, Bernstein pulls out his smartphone and turns on an app that monitors the house’s major systems. At that moment, it is using 1,020 watts and producing 9,352 watts, irrigating the landscape with greywater, and generally treading lightly on the environment.

Life is good.

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Stuart Bernstein, BS 86, managing director and partner at Goldman Sachs, began his career on Wall Street, eventually becoming Goldman Sachs’ top capital markets banker for financial institutions. In 2010, wanting to more fully pursue his passion for the environment and clean energy, he moved back to California to head the firm’s clean technology and renewables group as well as its venture capital coverage group. Goldman Sachs has dominated clean-tech deal making ever since his arrival.