Sustainable capitalism becoming mainstream

20th May 2015

Related Topics

Related tags

  • Mitigation ,
  • Reporting ,
  • Carbon Trading ,
  • Business & Industry


Jenny Spencer

The number of businesses and investors embracing sustainable capitalism is growing rapidly, according to former US vice-president Al Gore and business partner David Blood.

Gore and Blood co-founded investment management company Generation Investment in 2004. Launching a white paper yesterday, they stressed how the business case for sustainable capitalism is stronger now than ever.

"We don't believe there's a disadvantage to taking environment, society and governance (ESG) into account when making investment decisions. The business case is very, very robust," said Blood, formerly head of asset management at Goldman Sachs.

The white paper highlights numerous studies that examine the relationship between financial and ESG performance. This includes a review by the University of Oxford, which found that 80% of studies examining the issue concluded that investment strategies that incorporate ESG issues outperform comparable non-ESG strategies.

When Generation Investment began talking about sustainable capitalism a decade ago, the proportion of businesses and investors who understood it was small, said Blood. "Now the number is 20-25% and it is increasing very quickly. We're getting to a point where sustainable capitalism is more of a mainstream notion than not."

Gore added: "We seem to be approaching a cusp of change that is really quite significant."

The most important first step for businesses and investors to take is to assess carbon risk, said Blood. "Not all investors do that. But, if that's the only thing an investor does it's a vial step in the right direction," he said.

The number of companies applying a shadow price on carbon when conducting asset valuations is increasing, with 150 taking it into consideration last year, according to the CDP, the white paper notes.

Gore and Blood advocate incorporating the cost of carbon in order to transform an uncertainty into a quantifiable, and therefore manageable, risk.

The evidence on the benefits of considering sustainability when making investment decisions is so robust that it would be a failure of fiduciary duty to ignore it, they said.

Last year, the UK Law commission recommended that trustees expand their analysis of a company to include ESG issues. There are pending law suits on this issue, Gore noted.


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

Weather damage insurance claims hit record high

Weather-related damage to homes and businesses saw insurance claims hit a record high in the UK last year following a succession of storms.

18th April 2024

Read more

The Scottish government has today conceded that its goal to reduce carbon emissions by 75% by 2030 is now “out of reach” following analysis by the Climate Change Committee (CCC).

18th April 2024

Read more

The Science Based Targets initiative (SBTi) has issued a statement clarifying that no changes have been made to its stance on offsetting scope 3 emissions following a backlash.

16th April 2024

Read more

While there is no silver bullet for tackling climate change and social injustice, there is one controversial solution: the abolition of the super-rich. Chris Seekings explains more

4th April 2024

Read more

One of the world’s most influential management thinkers, Andrew Winston sees many reasons for hope as pessimism looms large in sustainability. Huw Morris reports

4th April 2024

Read more

Alex Veitch from the British Chambers of Commerce and IEMA’s Ben Goodwin discuss with Chris Seekings how to unlock the potential of UK businesses

4th April 2024

Read more

Regulatory gaps between the EU and UK are beginning to appear, warns Neil Howe in this edition’s environmental legislation round-up

4th April 2024

Read more

Five of the latest books on the environment and sustainability

3rd April 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close