The Common Sense Colloquy: Q&A with Richard Kiy of Institute of the Americas

Climate change doesn’t recognize borders. While most of our work centers on the U.S., we understand the importance of hemispheric and global communications on issues like energy and environment. So, I was thrilled when a former colleague contacted me this summer to ask for RENEWPR’s help with the release of a report on the future of clean energy in Mexico. I jumped at the chance and had the opportunity to bring new RENEWPRTeam Member Jessica Lass into the conversation from the outset. The result was a project to help Institute of the Americas with the release of the report Clean Energy Cost-Savings: A Study of Mexico’s Federal Electricity Commission (CFE).

The former colleague who gave us this opportunity is Richard Kiy, the president and CEO of the Institute. It’s been years since we worked together, but it was like no time had passed. That’s because of the kind of person Richard is. He’s smart, super-experienced and very accomplished. But he’s also just a nice guy. And we like working with nice people. It just made sense to ask Richard to participate in the Common Sense Colloquy series.

Richard was appointed President and CEO of the Institute in August of 2020. Prior to that, he was General Partner with Alumbra Advisors, a consulting firm with clients in the U.S., Mexico and Central America. And before that, he spent nearly 14 years as President and CEO of the International Community Foundation (ICF), where he focused his efforts on expanding grantmaking through Mexico and nearly a dozen other countries in Latin America and the Caribbean.

Richard has also been an executive at PriceSmart, Inc., and SAIC and a senior political appointee at the U.S. Department of Energy and Acting Environmental Attaché at the US. Embassy in Mexico City. He has a bachelor’s degree in Economics from Stanford and a master’s degree in Public Affairs from Harvard’s JFK School of Government. He’s also the co-author of the book Environmental Management along North America’s Borders and he serves on the Binational Advisory Board of the San Diego Natural History Museum.

I’ve known Richard for more than 20 years, but I haven’t had the opportunity to work with him in a long time. I’m thrilled that he was interested in participating in this series and adding his insight, wisdom and perspective to the growing list of leading lights in energy, environment, equity and more.

My thanks to Richard for sharing his wisdom with us – and you.

Q: One of the conclusions of your report on clean energy in Mexico is that the Mexican administration’s proposal to turn away from clean energy will hurt Mexican consumers as well as threatening air quality and environmental protection efforts. This conclusion seems like common sense. Why then is the Mexican government proceeding? What is your broad communications strategy for this report?

A: Mexico’s shift away from renewable energy alternatives and increased reliance on high sulfur fuel oils (HSFO) might, at first glance, seem counterintuitive. That said, it is part of Mexican President Lopez Obrador’s (AMLO) move to bolster his country’s “energy sovereignty.”

AMLO’s efforts to re-nationalize Mexico’s energy sector is driven by an anti-colonial sentiment that has some interesting historical roots.

Mexico’s Constitution of 1917 declared that the government owned all sub-soil resources although foreign companies were permitted to operate in country. However, due to growing labor disputes, in 1938 foreign oil companies were kicked out of Mexico and PEMEX, Mexican state-owned oil company was formed with a virtual monopoly on fossil fuels. The year prior, electrical generation production was also nationalized under the state-run Federal Electrical Commission (CFE).

75 years later, however, AMLO’s predecessor, Enrique Peña Nieto (EPN), succeeded in amending Mexico’s Constitution to permit foreign investment in the country’s electrical and petroleum sectors. This led to an increase in foreign direct investment in not just oil and gas but also Mexico’s renewable energy sector.

At the same time, over the past three decades Mexico’s dependency on imported fuel oil has grown, in spite of possessing its own oil reserves. Interestingly, this was due to PEMEX’s historic under-investment in its own refining capacity. As a result, last year Mexico imported an average of 1 million barrels per day of refined oil products from the United States, accounting for more than 70% of the Mexico’s domestic gasoline, diesel, natural gas and jet fuel consumption.

So, what AMLO is trying to do here is decrease that dependency while at the same time reversing the policies of EPN which he has argued favored foreign companies and investors over the interests of the Mexican people. One way that AMLO is accomplishing this is by doubling down on PEMEX’s HSFO by selling to Mexico’s state-owned electricity company, CFE.

What the Institute of the Americas’ recently published report has highlighted is that the variable cost of operating CFE facilities with HSFO is much greater than other natural gas and renewable energy alternatives (not to mention the other adverse environmental health consequences).

While AMLO’s energy policy may seem puzzling and fiscally counter-productive, there are other complex political factors at play.

For starters, PEMEX needs to sell its dirtier HSFO somewhere. Due to tightening standards on the global shipping trade, international demand for HSFO is down in favor of lower sulfur fuel alternatives. So, PEMEX has turned to CFE as the domestic buyer of last resort.

Also, PEMEX is financially troubled and AMLO is trying to turn his struggling state oil company around. According to the IMF, PEMEX is currently the world’s most indebted oil company in the world with debt exceeding USD$115 billion. PEMEX also owes billions more in pension obligations. Those billions will need to be paid somehow. On top of that, PEMEX has close to 126,000 employees and over 79% are unionized. Similarly, CFE has over 74,000 employees. Both PEMEX and CFE have politically powerful unions that also sway votes and influence.

Anyway, these are some of economic and political drivers behind AMLO’s idiosyncratic energy policy.

The irony is that what AMLO is proposing is not only short sided but makes no economic sense, will cost the Mexican government more and will have adverse human health impacts on residents living near CFE’s power plants.

There is another point worth considering. Mexico’s known reserves of oil and gas are only expected to last another 9+ years. So, AMLO must face the fact that the lifespan of his energy sovereignty initiative might end up being less than a decade. By then, the rest of the world will have moved on toward a cleaner, net zero future and Mexico will have missed a golden opportunity to attract the foreign investment needed to leverage the county’s unique renewable energy potential, particularly in the areas of solar and wind. So, Mexico has a lot at stake.

Q: What else does the Institute work on? How do you consider the role of communications in your work?

A: For the past 30 years, a key focus of the Institute has been its energy program. Over the past five years we’ve dedicated ourselves towards responding to the growing need across Latin America toward an energy transition that is not only economically and environmentally sustainable but also addresses regional workforce development needs and actively promotes renewable energy alternatives.

Last year the Institute established a new Environment & Climate Change program with a focus on catalyzing expanded sustainability leadership among the private sector and state and local governments in the Americas. For that program, key areas of interest include ESG competitiveness, marine and coastal eco-systems and community-based climate resiliency. In an effort to step up the Institute’s research on the climate change front, we recently published a report focused on the Nationally Determined Contributions (NDC) of countries across the Americas in conformance with the Paris Agreement.

The Institute is now positioning itself to launch a new programmatic initiative focused on economic competitiveness in Latin America with an emphasis on promoting expanded regional trade, commerce and open markets; sound fiscal, tax policy and good governance; as well as an investment in technology, innovation and human capital development in order to better prepare the region’s workforce for the jobs 21st century.

As the Institute works to ramp up programmatic outreach, it will need to expand its network of individual, corporate and foundation donors to support its future work. Here, effective communication is going to be absolutely critical.

Q: You’ve had such a rich and varied career. What have you learned about the value of communications in achieving your goals?

A: While my professional career has been quite varied, spanning the public, private and non-for-profit sectors, what has remained a constant is the importance of effective communication towards achieving my goals. Whether one of trying to shape public policy, make the next sale or inspire donors to effect positive social change, communication is essential.

Over the years, communications tools have evolved from the days of personalized notes with pen and ink to the advent of the internet, social media and instant messaging. Irrespective of the medium used, what has not changed is the importance of making a meaningful connection with the individual or audience you are seeking to sway to care about the policy initiative, product and/or cause that you pursuing.

These days, attention spans are limited and the competition for the hearts and minds of potential voters, policy makers, investors, buyers, or donors is greater than ever before. So, what’s going to move the needle?

In the end, I think it all boils down to the authenticity of one’s brand or cause; the overall value proposition of your product, service or idea; and a deep understanding of the human emotions, motivations and psychology that is going to compel your target audience to act. Yet, for all of these elements to come together into alignment, great story telling is also essential. That, in my opinion, is the value of effective communications.

Q: What’s the best “common sense” advice about communications you’ve received?

A: Probably the best “common sense” advice I have received is to truly know one’s audience. In the end, communications is about imparting or transmitting information to others. Not all communications, however, is effective. Effective communications is an art. It is not always easy to truly discern the best messaging for one’s desired target audience.Also, sometimes our own personal biases or perceptions get in the way. Other times, one can simply get too into the weeds on a given issue and the essence of what truly needs to be communicated can get lost. I’ve learned this from experience.

In my role as President & CEO of the Institute of the Americas, our stakeholders -- in business, the public sector, civil society and academia -- are diverse. Additionally, there are other geographical, cultural and linguistical related considerations to take into account given the region that the Institute serves. For a given issue, there can be diverse audiences requiring their own targeted messaging. So, effective communications can, at times, be tricky. For this reason, I have come to appreciate the value of seasoned communications professionals like you, Ben.

Q: What’s the best “common sense” advice about communications you've given to others?

A: Given my diverse international experience, the best “common sense” advice about communications I’ve given to others is to avoid having your message lost in translation.

While English has become the predominate language in international business, its often easy to overlook the fact that of the approximately 7.9 billion people across the globe only about 17% of the population or 1.35 billion people speak English. Also, for people living outside of the core Anglosphere (e.g. US, Canada, UK, Ireland, Australia, New Zealand), the majority are not native English speakers.

More often than not, when communicating beyond the Anglosphere, a foreign language other than English is required. Here, it is easy for things to get lost in translation.

Just as English has many sub-variations (e.g. British English, Canadian English, Australian English) and dialects as in the case of India, Nigeria and Jamaica, this is also true for other languages. As a case in point, the Spanish language has many variations (Mexican Spanish, LATAM Spanish, European Spanish or Iberian). Grammar, words and phrases can differ across the Spanish speaking world. In fact, some words or phrases can be deemed inappropriate or offensive in some countries but not in others. To avoid, offending your readers, I will not go into details.

Other times, a translation simply does not make any sense. A classic example of this is the Chevy Nova. The word, No Va, in Spanish means that it “does not go.” Not the best name for a car. Hence, General Motors’ introduction of the Nova in the Spanish speaking was a flop.

In my years working in Latin America, I have seen various examples of marketing and communications mis-steps by American companies that have retained the help of a Spanish language translator that did not have a good grounding of local idioms or phrases.

Similarly, an otherwise qualified translator can be out of their league when asked to translate technical language in a specialized field -- like medicine, engineering or policy related topics. I have learned this the hard way with translators that I have hired over the years.

Also, sometimes translators come with their own agenda. Here, I have a funny story to share. Early in my professional career I worked for the San Diego Economic Development Corporation (EDC) at a time when the region was actively working to attract foreign direct investment from East Asia. In an effort to attract in-bound investment and corporate relocations from South Korea, the EDC hired a local firm to translate their marketing material into Korean. Meeting with potential investors in Seoul, my boss was asked who Mr. Kim was? My boss was baffled. It turns out Mr. Kim was the translator who artfully placed ads in each and every page of EDC’s marketing brochure promoting his own business along information on the virtues of San Diego as the preferred designation for Korean investors. So, here a key take away is that when translating material from English into a foreign language it is important to trust but also verify.

As with any marketing or communications campaign in this country, when working overseas it is critical to do one’s homework and craft messaging that is targeted to the localized community or region in question. Otherwise, things will simply get lost in translation.