Al Gore is making money for himself and others by investing in companies that follow what he believes are ethical practices.
In addition to his crusade against global warming, the former vice president these days is a money manager, using the principles he applies to his environmental beliefs to playing the market.
The result, he said, has been positive financially and ecologically, though he didn’t specify the precise performance his company, Generation Investment Management, has turned in over the past 11 years or so.
“Everything that goes into our portfolio gets there after a lengthy process. We will have many visits, typically many more conversations and in-depth research. But we apply a sustainability lens — not just environmental sustainability but how does a business treat employees, what is the health, what are their ethics in the executive suite,” Gore said Tuesday at the annual DealBook conference. “All of that is relevant.”
He voiced concerns he has expressed often since leaving office in 2001 about the dangers that warming poses to the global climate. What he hasn’t been as vocal about is how to follow those principles and still make money.
Gore, also a former U.S. senator from Tennessee, refused to be drawn into analyzing the current presidential race.
Instead, he picked up on a central theme of the conference, namely the battle on Wall Street over short- versus long-term investment.
Whereas investors used to hold stocks six to seven years on average, the typical holding term is now barely four weeks, he said. That doesn’t give companies enough time to return value or properly develop.
“This high turnover and the short-term horizons that are now so endemic to market investments clash with the organic process by which real businesses build up their value,” Gore said. “If you’re getting in and out of the market in 29 days, then at some point the clash between what the real process you’re investing in and how you’re turning over your money leads to mistakes. There’s ample research that shows longer-term investors get better returns.”