ShareAction Annual Lecture with Al Gore of Generation Investment Management – a powerful call to action for shareholder and investor engagement

This year’s annual FairPensions (now re-named ShareAction) lecture took place on Monday 18^th at London’s Guildhall. The Guildhall must be one of the City’s most striking venues; a City institution which dates from the twelfth century and is still the home of City of London Corporation.

The guest speaker was the former US Vice-President, Nobel prize winner and now Chairman of Generation Investment Management Al Gore.

There is no question that Mr Gore is a superbly well-rehearsed rhetorician who effortlessly mixed simple personal anecdotes with his critique of contemporary capitalism. Gore talked us through the flaws in the current economic model and it’s obsession with GDP expansion at any cost; where “externalities” such as polluting the environment or contributing to global warming are simply not part of the valuation model we apply to businesses. He took the recent example of BP and highlighted the absurdity of analysing a company’s business model without giving proper consideration to issues such as the safety of employees working in the business.

He attacked the folly of valuing oil and gas companies according to billions of dollars of reserves which cannot be burnt without accelerating environmental damage- he labelled this the next sub-prime asset catastrophe in the form of “sub-prime carbon” assets. Mr Gore spoke with great commitment on the apparent misalignment of incentives whereby financiers can profit hugely from deals and decisions which only take into account very short term impacts here he spoke of a need to “re-engineer” the capitalist model in order to create a more balanced system of rewards based on protecting natural assets.

Although the speech contained very little in the way

of new information or ideas it was certainly a superbly energetic call to action for those in the audience, which connected the actions of individual savers and investors in a very real way with the on-going challenge of preserving the health of our global eco-system. The lecture powerfully re-stated the case for placing sustainability at the centre of financial planning.

John Ditchfield EIA Co-Chair writing in a personal capacity