SANTA MONICA, Calif. (MarketWatch) — In a keynote speech last week for the Forum for Sustainable and Responsible Investment, former Vice President Al Gore urged people to radically shift markets toward a more sustainable form of capitalism.
Gore, of course, is famous for his environmentalism, less so for his capitalism. But he has a track record there, too. As chairman of Generation Investment Management, Gore has sought to leverage financial capital to effect social and environmental change among the business community.
Generation Investment Management says its investment approach is based on the idea that sustainability factors—economic, environmental, social and governance criteria — will drive a company’s returns over the long term.
“By integrating sustainability issues with traditional analysis, we aim to deliver superior investment returns,” it says. The firm has offices in New York, London, and Sydney and operates a unique global research arm. It integrates sustainability research into fundamental equity analysis.
“We focus on key drivers of global change, including climate change and environmental degradation; poverty and development; water and natural resource scarcity; pandemics and health care; and demographics, migration and urbanization. These global challenges pose risks and opportunities that can materially affect a company’s ability to sustain profitability and deliver returns. Our research plays an important role in forming our views on the quality of the business, the quality of management and valuation,” according to GIM’s website. Read more about GIM.
The firm was founded in 2004 by Gore and David Blood.
Gore now, it seems, is bringing GIM’s mission into the mainstream.
“While capitalism is superior to any other system to organize economic activity, the crisis in global markets has shaken the world’s markets. As investors, we can lead the charge to create new and more sustainable investment strategies. These strategies offer unprecedented opportunities and point the way toward a much more sustainable form of capitalism,” Gore said in his speech.
Gore’s words aren’t to be taken lightly. He may not have invented it, but there is no doubt that Gore was in on the ground floor of the internet. He sparked a revolution with his book and film, An Inconvenient Truth, catalyzing the global green movement. And Current TV, another Gore venture, is ahead of its time with user-generated content.
Sustainable capitalism may just be the next market zeitgeist — and just what the global economy needs.
As meltdowns and Madoffs connive to destroy investment ethics, strategies that emphasize positive social change are being embraced. Wall Street firms are launching investment vehicles to invest in businesses in the developing world. More investment networks are being devised where like-minded investors can share ideas and investments that produce social and environmental merits as well as traditional return on investment. Exchanges are being born that match sustainable companies looking for investment with investors looking to invest sustainably.
Lisa Woll, chief executive of the Forum for Sustainable and Responsible Investment, says the socially responsible and sustainable investing space has shifted considerably over the past 20 plus years since the organization she runs was founded. By shifted she means grown and evolved. Trillions of dollars are now invested all over the world in sustainable companies. There are more socially conscious investors than ever.
Just as the environmental movement had existed for decades before Gore helped to push its ethos into the mainstream, socially responsible investing has existed for many years. With Gore’s embrace, another inconvenient truth may be waiting to be told: the story of a superior form of capitalism — sustainable capitalism.