Green's Gray Areas

Al Gore wants to show that sustainability is profitable, but his firm’s results are complicated

- David Rocks and Pat Regnier

Few have done more than Al Gore to galvanize public opinion on climate change. The former US vice president’s documentary An Inconvenient Truth won an Oscar. He shared the Nobel Peace Prize for work on climate change. And he’s trained tens of thousands of activists to raise awareness about the threat of a warming planet. Addressing the plutocrats gathered in Davos, Switzerland, last year, Gore thundered with the fervor of a Baptist preacher: “Who cares if our children and grandchildren curse us and ask, ‘What in God’s name were you thinking? You had the ability to stop this hell on Earth!’ ”

Less known is his effort over the past two decades to prove the compatibility of capitalism and sustainability. On a backstreet in London, behind the giant video screens and tourists swarming Piccadilly Circus, lie the offices of Generation Investment Management. The company Gore co-founded has quietly minted some of the biggest profits in sustainable investing. Last year was tougher, though. Its biggest fund slumped 28%—similar to competing funds—as markets reeled from Russia’s invasion of Ukraine, supply chain shocks and inflation. (Gore calls it a “little blip” in performance for the sector.)

There’s another, potentially more consequential issue: Despite Generation’s focus on environmental, social and governance, or ESG, factors, companies that make up almost half the holdings of its largest, $26.4 billion fund have increased their planetwarming greenhouse gas emissions in recent years.