The former US Vice-President has issued a call to action for civil society in a keynote address at London’s Guildhall.
If we are to safeguard the world’s future, we have two main tools to work with: One is democracy; and the other is capitalism. But both of these tools are in need of repair and reform. That was the premise put forward by the former Vice-President of the United States, Al Gore, when he delivered the ShareAction Annual Lecture to more than 400 civil society and business leaders at London’s historic Guildhall on Monday evening.
In a call to action for civil society, Al Gore urged the large number of charities with investment portfolios to use their influence as shareholders by demanding that major companies address issues of environmental and social sustainability in the way they run their businesses.
The way markets currently operate is “functionally insane”, the Vice-President claimed, because senior executives in companies are compensated in a way that focuses all their decisions on maximising the short term.
“People will do things that are harmful under this system, if that’s what you pay them to do”, he asserted.
“Are we destined to be the architects of our own demise?” he asked. “Are we going to go on blindly using the atmosphere as a sewer, tolerating inequality and taking valuation shortcuts? I refuse to believe that. But the change has to come from you.
"What if you, as asset owners, as campaigners, and as members of civil society want to use the performance of your assets to bring about positive change in society as a whole, while simultaneously improving the performance of those assets? That would be a good thing, would it not?" he asked.
“This is not about negative screening, or ethical investment. I do not denigrate that; but what I am talking about is mainstreaming sustainable capitalism.
“You can make a difference with your investments. Sustainably-managed companies perform better. This is not ideological cant – it is fact. Businesses have to be run correctly for the long term, and investors and asset owners have to be involved; you have to hold the executives accountable for the downstream consequences of the decisions they are making on your behalf.
“Those of you gathered here, in the centre of world finance, have the means to insist on these reforms being made. That would unleash a new wave of positive change that really can save the future”, he concluded.
Earlier, in inviting Vice-President Gore to deliver the lecture, Catherine Howarth ,ShareAction’s CEO, said that this was the day that ShareAction took on its new name, having been previously known as FairPensions.
Howarth said that her organisation and its membership of NGOs, unions, faith organisations and philanthropists, are helping charity investors to re-examine their role as shareowners. “Together”, she said, “we are carving out a new democratic space and state of mind at the heart of the investment arena.”