Beats | May 2, 2018

Al Gore’s Generation Investment Management builds the investment case for sustainability

Dennis Price
ImpactAlpha Editor

Dennis Price

ImpactAlpha, May 2 – Generation Investment Management, the $19 billion public and private equity investment firm co-founded by the former vice president, isn’t just calling the ‘Sustainability Revolution.” It’s building the business case for sustainable investing, starting with its own returns.

The Financial Times reports the firm’s global equities fund has produced annual returns of 13.5% (vs. 7.3% for the benchmark MSCI World index). The sustainability revolution “has the magnitude of the industrial revolution but the speed of the digital revolution,” Gore told the FT.

In the firm’s sustainability trends report – think Mary Meeker’s internet trends report for the sustainability disruption – Generation documents (with more than 100 charts and graphs) commercial progress in mobility, energy, the built environment, food systems and wellbeing.

The London-based firm moved its New York office to San Francisco last year. Gore and Generation co-founder, David Blood, highlighted three themes in Wired UK:

  • Better products, more sustainably… Electric vehicles, with 2 million now on the road, are getting cheaper and boosting ranges. Global wind capacity is growing at double-digit rates, as costs fall. Installed capacity of solar has grown at a 50% compound annual growth rate over the last eight years. Cost is no longer the major barrier to growth.
  • Sustainable consumption… The proliferation of car and bike-sharing schemes means more efficient resource use and greater access to affordable transportation. “Alternative milks,” like pea and soya, make up 13% of the U.S. milk market. Material consumption is declining across many developed markets.
  • New categories… Meat substitutes are growing faster than processed meats. Drones and ag-tech are boosting farm efficiencies. Health-monitoring is driving a growing market for wearables and other tech-enabled healthcare services.