♪ joel: former vice president of the united states of america al gore is fighting to save the planet from what he calls a crime and classes. mr. gore: the only questions left are must we change, can we change, will we change? joel: investing in the problem. mr. gore: once you begin to change, you feel the wind at your back. joel: al gore discusses his vision for climate change today and his hope for tomorrow in this edition of "bloomberg businessweek debrief." ♪ i spoke with former vice president al gore at the global

kind of action summit in san francisco about what he calls the city sustainability -- the sustainability revolution. mr. gore: the sustainability revolution is the largest investing opportunity and the largest set of is this opportunities in all of history -- business opportunities in all of history. many companies are becoming aware of the risks that have been understated of continuing with the fossil fuel economy, the exploitative business models that ignore ways to ignore pollution, ignore exploitation of off put communities, workforces. by the way, when companies do get with this program and adopt

these goals, all kinds of benefits come to them, including recruitment and retention. the brightest and best young men and women want to work for companies that give them a good income, but also give them an opportunity to say to their family and friends that they are part of something larger than just making money. they are helping to make the world a better place. joel: you have become a modest success story in part because of generation management, which you cofounded in 2004. you now manage $18 billion. mr. gore: a little bit. joel: a little bit. mr. gore: $21 billion. [laughter] joel: as an investor, what do you look for in his this strategies -- business strategies? mr. gore: we look for companies that don't borrow from the future and create a more sustainable and prosperous

present without doing so at the expense of opportunities that should be available down the road. we find that companies that really focus on that model are far more likely to be successful than their competitors in almost every sector of the marketplace. there is now academic research tending to prove that businesses that are aligned with the sustainability revolution are likely to be more successful. in the investor marketplace, there used to be this outdated view that fiduciary responsibility somehow prevented asset managers from taking the environment and social and governance factors into account. that has been turned on its head. best practice tells us that asset managers that do not take

these factors fully into account are violating their fiduciary responsibility goals. that is an earthquake where esg factors in the investing market place concern. it is sweeping through the investing marketplace. joel: if there is so much money to be made in sustainable finance, why haven't we seen more investors flock to this? mr. gore: we are seeing a lot who are coming in this direction. any time there is a significant change, inertia is an obstacle just because of human nature. the qwerty keyboard doesn't make any sense anymore, but the transition to a new design has frustrated all of the keyboard

and software companies. same thing when you ask people or businesses to make a systemic change to an approach that has been used for a long time, and people are comfortable with it. change can be difficult. once change has been embraced, you feel the wind at your back, and you feel, why haven't we done this before? joel: as an investor, what are the trends you're trying to get in front of? mr. gore: we pay attention to the stg's from the u.n. we don't use that as an investment thesis, but we map to them. we look at what a company does, and does it have a good chance of being profitable?

is it making the world a better place? how does it do what it does? what is the sector of the marketplace they are in? do they have a castle? how good is the castle? are they really aware of all of these environmental and social and governance factors? are they well governed? do they have the right kind of incentive and compensation structure that does not encourage people to make short-term decisions in order to make some quarterly reporting requirements or other short-term artificial measure? are they focused instead on the longer-term maturation of the business? are they making the world and their communities a better place? are they paying attention to the needs of their employees and their employees' families? those are some of the factors we look at.

a company could have all of those things in spades, but its value might be recognized already in the marketplace, so it is not a profit opportunity for us. our number one goal is to get the highest return for our clients, but to do so in a way that invests according to this sustainability model. joel: do you have to have a climate solution in order to be in the portfolio? mr. gore: we have to feel the company is aligned with sustainability. the face of sustainability is a little different sector by sector. if it is a financial services

company, for example, the carbon emissions while still important are not usually a major factor company, for example, the carbon in their sustainability profile, but there hr culture is. you look at all the spectacular failures among financial services companies over the last 25 or 30 years. in almost every case, there was a bad hr culture, of that culture generally -- a bad culture generally that caught up with the company. that would be part of the sustainability analysis. joel: coming up much more with al gore, who believes that the trump administration's environmental policies will not stop the sustainability revolution. mr. gore: i was worried when he made the announcement that we are going to pull out of the paris agreement, but no other country in the world followed his lead. joel: that is ahead on this

"bloomberg businessweek debrief." ♪

♪ joel: al gore cofounded generation investment management in 2004. the firm now manages about $20 billion. generation invests in companies of the sustainable lens. mr. gore: this sustainability revolution is the single largest investment opportunity in all of history. i will give you another example just to illustrate how brought the opportunity set is. we invested in a company called toast that takes on food waste. in one of the sessions this morning over at the global climate action summit, they

talked about the enormity of food waste in the global economy. i cannot remember the statistic, but it would be like the third or fourth largest consumer food in the world, just the waste. this company takes that on, and in the process, has created for restaurants and incredibly easy to use digital system for restaurateurs to manage their kitchen, to eliminate almost all of the food waste. joel: president trump's administration has chipped away at environmental protections. he seems to love coal. climate skeptics still exist. how have these challenges changed you and your approach? mr. gore: since president trump

took office, the cancellation and retirement of coal plants has actually accelerated. i was worried when he made his announcement that we were going to pull out of the paris agreement, but no other country in the world followed his lead. in physics, there is this law, for each action, there is an equal and opposite reaction. that is true in politics as well. you saw the march here last saturday. what did the california state legislature did last week, and the governor signed it on monday. joel: which is 100% renewable electricity by 2045. mr. gore: here in california, and he accompanied that with an executive order that commits the state of california to zero carbon energy in all of the activity that takes place in

california by 2045. this is an extremely controversial measure. it has happened since trump took office. under the law, and we are still a nation under law as of right now, and will remain so. [laughter] mr. gore: under the law, the first day the u.s. can withdraw from the paris agreement happens to be one day after the next presidential election. if there is a new president, excuse me for a moment. [laughter] mr. gore: a new president could give 30 days notice, and the u.s. would be right back in the agreement. we have seen not only california but 15 other states and hundreds of cities, hundreds of giant companies -- i am on the board of apple, and apple is already 100% renewable energy. we heard from marc benioff, the

head of salesforce this morning. they are already 100% noble energy. there are so many others that are doing this. google, same way. i will use them as an example in the sustainability revolution. they bought in artificial intelligence company called the mind -- deep mind. the founders are incredibly smart. they asked deep mind if they could help with the energy used in google's server farms, the biggest in the world. with no new hardware and an increased output of process information, just with the use of ai, they were able to reduce energy use by 56% in all of these server farms. that is incredible. joel: it was somewhat

counterintuitive how they did it. they changed how the whole operation work by actually maxing out concern areas. mr. gore: you obviously know all about this. i am glad. at first, they gave a recommendation to the managers every 30 minutes, and they got a 40% reduction. then they find out that the managers were just automatically accepting all the recommendations. let's just take it down to five minutes and take the managers out of it. now they are down to a one minute turnover cycle. they went from a 40% reduction to 56% reduction. there are thousands of use cases, hundreds of thousands of use cases in the global economy or that seem kind of approach can achieve incredibly high levels of efficiency. joel: let me back up to the paris agreement for a moment. what is the plan be for the worst-case -- plan b for the

worst-case scenario? mr. gore: there is no planet b, so there is no plan b. we have to do this. the plan under the paris agreement is an evolving plan. there is a five year review period built in every five years. nations are called upon. this will begin next year in 2019 for implementation in 2020. because the cost production curves first solar, electricity, wind, batteries continue to plummet, it gets easier every year for nations to achieve higher and more ambitious goals for reducing our amounts. this five-year review process will be a time to take stock and

for nations to raise their ambition. we have already heard some announcements of nations upping the ante, and companies as well. joel:, al gore's ambitious goals for the future of the planet. mr. gore: i would like to see us solve the climate crisis and build a healthier, more prosperous, more just society and economy in the process. joel: that is ahead on this "bloomberg businessweek debrief." ♪ ef." ♪

♪ joel: when you look ahead, what are the most ambitious goals you would like us to see accomplished within your lifetime? mr. gore: i would like to see us solve the climate crisis and build a healthier, more prosperous, more just society and economy in the process. just to return to this crisis for moment, there are only a few questions remaining. must we change? can we change? will we change? we are still treating the atmosphere as an open sore. -- sewer. it lingers there for a long time. it now traps as much extra heat as would be released by another

400,000 rows from a class atomic bombs exploding every day. that is why the oceans are getting so hot. that is why hurricane florence intensified so rapidly. that is why this super typhoon heading towards southeast china today is as large as it is. that is why the worst fire in the history of california was one month ago. that is why the fire season in the west is 105 days per year longer than it used to be. that is why the drought in the southwest is as intense as it is. that is why there are fish from the ocean swimming in the

streets of miami at high tide. since the scientists were spot on in warning us about all of those consequences, and now we see them played out on the evening news every night, like a major hike from the book of revelations, that should cause us to pay more attention to what the scientific community is telling us will happen in the future if we continue using the sky as an open sewer. i don't want to explain to my grandchildren why my generation sat around and allow this. i would rather explain how the generation and control in these years rose to the moral challenge and found a way to do it that helped us in every other aspect of our lives. this is a really critical choice we have to make. we must change. can we change? we have all these technologies.

the most important is will we change? what we are seeing at this summit in california is great evidence that yes, we will. the paris agreement is equally significant evidence that we will change. some doubt we have the political will, but worth remembering that political will is a self renewable resource. [laughter] [applause] joel: you are no longer an elected official. [laughter] joel: what do you know now that you wish you would have? mr. gore: well, quite a lot, actually. we all learn as we age, and as

we have more experience. generation investment management, and some of my colleagues are here today, has been an absolutely thrilling experience for me. the women i work with their are inspiring to me. the relationship we have with our clients, i just absolutely love it. i have learned a lot about the business world. i thought i knew before, still got a lot to learn. it has been fascinating and fun. joel: what are you most excited about? mr. gore: i'm excited that we are beginning to achieve the momentum we need in this world to solve the climate crisis. it is a most unimaginably difficult to make the transition that is now underway because we still rely on fossil energy for 80% of the energy we produce. that seems like a worthy challenge to take on.

i am excited because i see people taking it on every day and succeeding in the process. we are going to win this. the remaining question is will we win it in time to avoid crossing some dangerous threshold that will throw the climate balance out of kilter. this hurricane off the carolinas now, like hurricane harvey last year, is an example of how the northern hemisphere jetstream is kind of behaving in a goofy way now. we have melted so much ice in the arctic, the temperature is going up there. we should not risk crossing the oceans, acidifying the oceans, making the temperature go up so much. we put at risk elements of the ocean food chain.

i could give you hundreds of other examples. coral reefs are in great danger. it matters how quickly we win this. i am excited we are now gaining enough momentum the hope is legitimate and real. joel: on behalf of bloomberg, join me in giving a warm round of applause to former vice president al gore. mr. gore: thank you. ♪

♪ nejra: life after lehman and we take a look at the financial landscape a decade after the crisis. are we ready for the next one? regulating wall street, what is next? welcome to "bloomberg markets, rules and returns." i'm nejra cejic. we bring you special programming to cover the 10 years since the lehman brothers. here is how our colleagues reported on it at the time.