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‘Everything is accelerating’ in the climate fight, billionaire investor warns

And it’s altering the world’s economic and investing future.
Jeremy Grantham is the co-founder of Grantham Mayo Van Otterloo. Image: Daniel Acker, Bloomberg

More than a year ago, legendary investor Jeremy Grantham announced he was devoting almost his entire fortune, more than $1 billion, to the fight against climate change.

Humanity is in the “race of our lives,” he warned, a terrifying competition between the Earth’s rising temperatures and the many ways people are responding to the crisis. Since then, the race has only sped up, the 81-year-old co-founder of Grantham Mayo Van Otterloo (GMO) now says.

“Everything is accelerating,” Grantham said in an interview at Bloomberg’s New York headquarters. “The disasters are terrible, one ugly event after another, and they seem to be happening quicker and quicker,” he said. He called the recent fires in Australia “apocalyptic.”  

But also, he said, there is progress in combating such an overwhelming problem. “The technology is just amazing. One pleasant surprise after another,” he said, noting that innovations like electric cars and lab-grown food are transforming energy, agriculture and other fields.

Grantham, who predicted the tech bubble and financial crisis, discussed how the climate race is rapidly altering the world’s economic and investing future. 

What’s your reaction to Larry Fink’s vow that BlackRock, the world’s largest asset manager, will make climate change a priority?

I say, “Brilliant well done, Larry.” That was necessary and incredibly welcome and may set a good example. And now we know you can bark loudly. Can you bite? And will you perhaps think about having your giant index funds vote a little greener? They’re right at the bottom of the list. Legal & General in the U.K. is way at the top of the list, and Northern Trust is not so bad, and right at the bottom is BlackRock. So they can do better. You’re not going to lose business in the index business because you become a little greener in how you cast your proxies. It’s the one area I can think of where there’s no real cost to either the buyer or the seller.

What’s been holding back companies and investors from doing more?

Capitalism has this strange ability to kind of paralyse the altruistic part of humans. So at the weekends, they’re altruistic, they love their grandchildren. Then during the week they take on the character of the corporation whose only job description, says Milton Friedman, is to maximise short term profits. If a human being does nothing except maximise their self interest, they’re a sociopath. That’s how it’s defined. So during the week you behave like a sociopath and as if you have no grandchildren—or as if you hate the ones you have. And then at the weekend, you become a loving grandfather again. That is apparently what capitalism does to us, based on the evidence.

You’ve argued that investors should sell oil and gas investments. What does it mean if more investors start to divest?

Divestment is not an economic issue in terms of how it affects the oil companies. The economic impact is for the person who is dumping the stock. He is getting out of an industry that has been put on notice that they’re going out of business. 

In the last 10 years they’re up 5% or 10% and the S&P 500 has tripled. It has been absolutely awful and I am proud to say that for those 10 years I’ve been saying, “Don’t buy oil stocks.” Forget the ethics for a second. It’s a bad economic idea. Going forward, if they rolled with the punches and they tried to redesign their business as an energy provider—rather than oil—they could do okay and get a decent return.

But they fight it. If you want to lose money in a capitalist system, that is how you do it. You underestimate the forces you’re dealing with. 

Which of the major oil and gas companies has the most potential to pivot?

The Europeans are always thinking greener thoughts, and longer-term thoughts, than their American brothers. The Americans have not been good at this stuff. They have held us back at least 10 years. Without that push back, we would be perhaps a leader in this field and life would be quite different.

The long term goal is to make them a pariah industry. It took us 20 years on tobacco. Until they were pariahs, politicians would not take a bite out of them. They had misrepresented the dangers of their product. They knew it was causing cancer, et cetera, and they denied it. Energy companies knew that oil was a dangerous product and they obfuscated it. It will take us a while, but they have to become pariahs.

What would you do about investments in the chemical industry?

I think chemicals are about to engage in a war of a thousand cuts. Plastics will get banned. The growth rate will become negative within five years, if not sooner. Sometimes these flashpoints are very rapid. Pesticides will be banned in enlightened countries and their health will immediately improve. Europeans already ban lots of chemicals. We do not. 

When you sit down with foundations, endowments and other institutional investors, how have their attitudes shifted on climate change?

When I gave my first climate change talk at a GMO annual conference dinner 10 years ago, there was, to say the least, some eye-rolling. A few people who were visibly upset.

These 10 years have been a revolution in a typical group of clients. They’ve begun to realise they have to take it into account, that it has portfolio implications. And the last two years has seen an acceleration in that, as the general public has gotten more involved in Europe and North America, particularly last year. Things are beginning to happen much faster.

Why aren’t college and university endowments divesting from fossil fuel stocks?

I’ve spoken to over 1 000 investment committees, and they are the most conservative organisations on the planet. And that is the reason that almost all of the universities have had problems divesting, although they’re now beginning to.

But at the top end, what about MIT, Harvard and so on? They receive hundreds of millions of good research dollars to do perfectly good, valuable research—from the oil industry. One of the leading university’s leading people said to us — and I’m sure she’d be happy to deny it — “we simply can’t afford to step away.” I’m mildly sympathetic. You can do a lot of terrific research for $200 million. You wouldn’t lightly walk away from it, would you? But having said that, you’re still bought. You sold out for a high price, but you’re still bought.

© 2020 Bloomberg L.P.

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….commendable, Jeremy Grantham is passionate about the subject of climate change, however his excitement in joining the stampede of the alarmist crowd has throttled his desire to view the consequences of good and bad

Some might agree that tobacco is a horrid industry, an un healthy, unsightly habit as I do. However the aged economies of Europe are finding that tobacco played a part in the retirement and old age care industry if one see’s the point here

Plastics are a modern age marvel. To say it will become irrelevant one must consider what can replace ….Papier-mâché?
Research plastics that can dissolve in salt water, not just bio degrade
Climate alarmists such as juvenile Thunberg have fantasies of sail ships, horse and carriage and carousel fair grounds, forgetting the drudgery of life for the 6.5 billion other people living outside Scandinavia
One can speculate the discourse of the evils of 20th century industries are a propaganda to harness control on development of man kind for the selective few in politics

There are some balanced observations out there, but none seem to be of any interest in the sold out arena of the highest bidder propaganda media. Here is a recommendation:
https://wattsupwiththat.com/2020/02/08/breaking-down-the-last-decade-of-climate-change-in-7-charts/
Sanity has become endangered. Its absence is everywhere.
It is the abject failure to give due credit that troubles. What happened to common sense and respect for the search for unfettered truth. Jumping to conclusions is never conducive to getting things correct, but the amount of money and effort to promote both diagnosis and cure with bias and blinkers has become a very suspect industry. The motive of financial gain for the promoters is everywhere to such an extent that if you want people to believe you have altruistic motives then you will need to be highly convincing. The people have all been fooled more than once before.

” The motive of financial gain for the promoters is everywhere”
That is quite ironic.

Wattsupwiththat is literally funded by people that stand to gain financially by climate change denial.

Go spend some time doing research into Anthony Watts (The creator of WUWT) and his funding sources.

PJJ I found this page where Watts admits everything about his income sources. Do you have something to show that he is a liar as you appear to infer?
https://wattsupwiththat.com/faqs/

And the climate change researchers are not ‘bought’?

You are right, they are bought alright, just not the ones you think.
Patrick Moore runs a very successful PR company for fossil fuel companies looking for a scientist willing (for the right price of course) to dismiss anthropocentric climate change.

Of course they are bought. Every field of research requires funding and the funders generally define the direction of research. Sometimes the research aligns with humanity’s requirements

Told y’all long ago….’climate change’ is going to be BIG BUSINESS!

It may replace the job of ‘religion’ (i.e. for the few in power to control rest of society’s behaviour)

…the Europeans (and the rest of developed world) are the leading “green thinkers”.

But hold a second, take the world back to the 1st & 2nd Industrial Revolutions….WHICH GLOBAL region was first to go into industrial development overdrive? (while at the time nothing much happened in Africa, Asia, South America).

What Greta Thunberg is saying (or rather her backers): “To hell with developing nations, we had now enough industrial development”. With the notion that development must NOW STOP…..effectively you want to deny the poor in developing nations any aspiration of having a car one day, or a residence with electricity. (While the Europeans has these benefits long ago….and now since Asia and other regions are developing…to catch up….is apparently a no-no. What hypocrites!

How ‘convenient’ is this current climate change…yes, one’s not denying it….since the earth recently about 12,000 yrs ago, exited the previous Ice Age. Obviously things will slowly get warmer exiting an Ice Age. WHAT caused the earth’s climate changes (be it from cold to hot, or hot to cold) more than say 12,000yrs ago (“Pleistocene Epoch”) far before modern civilization made any impact?

“WHAT caused the earth’s climate changes (be it from cold to hot, or hot to cold) more than say 12,000yrs ago (“Pleistocene Epoch”) far before modern civilization made any impact?”

If you really are sincerely looking for someone to answer that question (not just another video confirming your world view) Start at this video:

https://www.youtube.com/watch?v=52KLGqDSAjo

I am not sure if MW will allow it, they seem to not like offsite links.
Its part 1 in a 10 part series covering everything from basics to more advanced subjects, and also the scientific method.

They lost me when they said eating meat is bad for the environment.

I am a carbon-negative, organic sheep farmer who produces a carbon-negative, green white fibre called wool and a carbon-negative green red protein called lamb and mutton. My entire farming enterprise is carbon neutral, to carbon negative. The rhizobium bacteria on the roots of legumes fixes carbon dioxide from the air into nitrogen in the legume. The animal consumes the legume and fixes the nitrogen in its meat as protein. The human consumes the meat and transfers the carbon to his own body as protein. People who braai every day are real crusaders for a green planet. They are bravely and unselfishly volunteering their own lives to trap carbon dioxide for the benefit of society. These real greenies who braai are the real heros who spend their time and money to cool down the earth. I salute all the brave crusaders who put their own lives on the line and who volunteer their bodies to act as carbon sinks.

Through the miraculous process of osmosis the vine consumes carbon dioxide from the environment and produces oxygen. We support and enable this massive green process when we drink wine. That feeling you get when you consume a fair amount of wine is the carbon credits that goes to your head. When you stagger a bit you should feel proud because you collected a lot of carbon credits. You are high on carbon credits. You can neutralise it with a cup of coffee and panado.

Save the planet today – braai something and drink some carbon credits.

Sheep run after their lambs. Mindful adults won’t run after a Swedish child.

Don’t drink and drive guys. We cannot afford to lose any real green warriors.

Being a proud Climate Change Denialist is to busy oneself with reacting to a mere symptom while assiduously ignoring the root cause of the problem we have.

We have TOO MANY Humans in a fragile ecosystem that cannot – and ultimately – WILL NOT – tolerate the destructive imbalance this over-entitled species is bringing to the rest of the inhabitants of this ecosphere.

ANOTHER EDUCATION LESSON TO THE 3RD WORLD UNDER-EDUCATED–The Vostock Ice cores PROVE that the planet heated BEFORE THE Carbon Dioxide increased. It increased due to the heated oceans releasing larger amounts of CO2.
DOES EVERYONE LIVE A 5 MINUTE SOUND BYTE LIFE??

So the ecosphere on Planet Earth has NO real existential problems at all now then, Zokey?

And the world’s scientists and ecologists (all of them!) have got themselves into a dreadful tizz all over nothing – a mere trivial storm in a teacup?

The “mistake” that every untrained amateur “clerk-in-a-cubicle” can instead see as clear as daylight?

The world is flat according to the cubical dwellers. Any other possibility is beyond understanding.

Misunderstood random knowledge, and even less wisdom, can be a very dangerous attribute!

Lol – climate change has become a religion and people that dare question it are labeled climate change deniers. How dare you questions years of alarmist drivel. Amazing that the Maldives are still above water – years behind on that one….. every bit of mileage is extracted from natural disasters (Australian wild fires)

The day governments startied collecting taxes and exerting more control over industry, and corporations starting making money off being green climate science died and became driven by money.

The narrative has sneakily been relabeled “climate change” from the previous “ global warming” – meaning we somehow will be blamed for when the earth cools….

Quite amazing how the current warming trend is extrapolated linearly to infinity – ever heard of the concept of cycles?
The sun has 300 year cycles and is the predominant influencer of all things climate…. educate yourself and free yourself from alarmists propaganda driven by governments and interest groups with motives not openly expressed.

Lol, Kickass –

“Cubical Dwellers” in fool flight are a wondrous species to behold!

We exist on this planet, and in this biosphere, ONLY because of the OTHER species (both fauna and flora).

And the explosively expanding human population is ACTIVELY destroying the very biosphere that is ESSENTIAL for our continued (human) existence.

Nothing is so dangerous as human arrogance and stupidity in this regard.

Nope, you’re not getting nailed. Supported instead 😉

Myself, I’m a proponent of EV’s for example….but I wonder if the globe will not one day become the dumping ground of batteries & its toxic chemical components? (Also, what is the CO2 footprint of battery manufacturing in the 1st place?). Plenty of unanswered questions.

The next generation that will follow after Greta Thunberg’s-genenation, will gain accuse the prior generation of creating a planet which has become a battery dump (yes, there is recycling of batteries, but there will be damage to environment…which we can’t measure now.) At present, we’re fixated mostly on zero-emission EV’s…but not the full consequences.

End of comments.

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