>> former vice president of the al gore ises fighting to save the planet from a climate crisis. >> there are only three questions remaining about the climate crisis. must we change? can we change? will we change? once change is embraced, you feel the wind at your back and you begin to think why have we not done this before? joel: al gore discusses his views for the end on this "bloomberg businessweek debrief." i spoke with former vice president al gore at the global

climate action summit in san francisco about what he calls the sustainability revolution. he wants u.s. investors to support policies that benefit environment without sacrificing profit. al: the sustainability revolution is the largest investing opportunity and a largest set of business opportunities in all of history. many companies are also becoming aware of the risks that have been understated of continuing with the fossil fuel economy. with the exploitive business models that ignore ways to help -- ignore pollution, ignore communities and workforces. by the way, when companies do get with this program and adopt these kinds of goals, all kinds of benefits come to them including recruitment and

retention. the brightest and best young women and men want to work for companies that give them a good income, but also give them the opportunity to family and friends that they're part of something larger than just making money. they're 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] but what's $3 billion among friends? [laughter] joel: using sustainable finances. as an investor, what do you look for in business strategies?

mr. gore: we look for companies that don't borrow from the future and help to create a more sustainable and prosperous present without doing so at the expense of the opportunities that should be available down the road. and 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. and there's now academic research tending to prove that businesses that are aligned with the sustainability revolution are likely to be more successful. and in the investor marketplace, there used to be this outdated view that fiduciary responsibility somehow prevented asset managers from taking the environment and social and governance factors into account. but now, that's been turned on

its head. and actually, best practice tells us that asset managers that do not take these factors fully into account are violating their fiduciary responsibility . that's kind of an earthquake where esg factors in the investing market place concern. it is really beginning to sweep through the investing marketplace. joel: if that's true that there's 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 . it's 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. but once change is 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 still? mr. gore: we look, we try to 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? and is it making the world a better place? how does it do what it does? what is the sector of the marketplace they're in? do they have a moat? do they have a castle? how good is the castle? how big 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 doesn't encourage people to make short-term decisions in order to make some quarterly reporting requirements or some other short-term artificial metric? are they focused instead on the longer-term maturation of the business? again, 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? their supply chains, what ies are being affected by their supply chains. those are some of the factors we look at. by the way, a company could have all of those things in spades, but its value might be recognized already in the marketplace, so it's 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: and do you have to have a climate solution in order to be in the portfolio? mr. gore: well, we have to feel that the company is aligned with sustainability. and the face of sustainability is a little bit different sector by sector. if it's a financial services company, for example, the carbon

emissions, while still important, are not usually a major factor in their sustainability profile, but their 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, a bad culture generally that eventually caught up with the firm. that would be part of the sustainability analysis. joel: coming up, much more with al gore, who believes that the trump administration's climate policies won't stop the sustainability revolution. mr. gore: i was worried when he made the announcement that we were going to pull out of the paris agreement, but no other country in the world followed

his lead. joel: that's ahead on this "bloomberg businessweek debrief: a conversation with al gore." ♪

joel: al gore cofounded generation investment management in 2004 with david blood. and the firm now manages about $20 billion. company's.about the mr. gore: this sustainability revolution is the single largest investment opportunity in all of history. i'll give you another example just to illustrate how broad 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 can't 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 an incredibly efficient, easy to use digital system for restaurateurs to manage their restaurants, to connect the kitchen with their server to eliminate almost all of the food waste. joel: president trump's administration has chipped away ceaselessly at environmental protections. he seems to love coal. and climate skeptics still exist. how have these challenges changed you and your approach? mr. gore: well, since president trump took office, the

cancellation and retirement of coal plants, coal-generating 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. you know in physics, there is this law, for each action, there is an equal and opposite reaction. that's true in politics, as well. you saw the march here last saturday. and 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: correct. and they are 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. so this is an extremely consequential measure. and again, it's 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. and if there's a new president, excuse me for a moment. [laughter] mr. gore: then a new president could give 30 days notice, and the u.s. would be right back in the agreement. and we have seen, not only california, but 15 other states and hundreds of cities, hundreds of giant companies -- i'm on the board of apple, and apple is already 100% renewable energy.

we heard from benioff, marc benioff, the head of salesforce this morning. they're already 100% renewable 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 an artificial intelligence company called deep mind years ago. 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. so 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.

i mean that's incredible. joel: it was somewhat counterintuitive how they did it. they changed how the whole operation work by actually maxing out certain areas. mr. gore: you obviously know all about this. [laughter] gore: i'm 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. then it's like, let's just take it down to five minutes and take the managers out of it. now they're 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. which is, what's the plan b for

the worst-case scenario? mr. gore: well, there's no planet b, so there's no plan b. we have to do this. in fact, the plan under the paris agreement is an evolving plan. there's 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. and because the cost production -- reduction curves for solar electricity, when electricity, battery-powered vehicles continue to plummet, it gets easier every year for nations to achieve higher and more ambitious goals for reducing our amounts.

and so this five-year review process will be a time to take stock and for nations to raise their ambition. we've already heard some announcements of nations upping the ante, and companies as well. joel: up next, al gore's ambitious goals for the future of the planet. mr. gore: i'd like to see us solve the climate crisis and build a healthier, more prosperous, fair, more just society and economy in the process. joel: that's ahead on this "bloomberg businessweek debrief: a conversation with al gore." ♪

joel: when you look ahead, what are the most ambitious goals you would like us to see accomplished within your lifetime? mr. gore: i'd like to see us solve the climate crisis and build a healthier, more prosperous, fair, more just society and economy in the process. and just to return to this crisis for a moment, there are only three questions remaining about the climate crisis. must we change? can we change? will we change? justin paz for a moment of why we must -- just to cause for a change,f why we must

we're still treating the atmosphere as an open sewer. it lingers there for a long time. it now traps as much extra heat as would be released by another 400,000 hiroshima class atomic bombs exploding every day. that's why it's getting hotter every year. that's why the oceans are getting so hot. that's why hurricane florence intensified so rapidly. that's why this super typhoon heading towards southeast china today is as large as it is. that's why the worst fire in the history of california was one month ago. that's why the fire season here in the west is 105 days per year longer than it used to be. that's why the drought in the southwest is as intense as it is. that's why there's fish from the ocean swimming in the streets of

miami at high tide. and 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, it's 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 have to explain to my grandchildren why my generation sat around and failed to do this. i'd much rather explain how the generation and control in these years actually 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 that we have to make. we must change.

and the second question, can we change? we have all these technologies. we have the ability to do it. the most in -- the most important is the third question. will we change? what we're seeing at this summit in california is great evidence that yes, we will. the paris agreement is equally significant evidence that we will change. bummed out that we have the political will, but worth remembering that political will is a 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 known then? mr. gore: well, quite a lot, actually. we all learn as we age, and as we have more experience. i have really enjoyed the business world. generation investment

management and some of my colleagues are here today, has been an absolutely thrilling experience for me. the women and men i work with there are inspiring to me. the relationship we have with our clients come at the investment teams and ceo's, i just absolutely love it. i've learned a lot about the business world. i thought i knew before, still got a lot to learn. it's been really fascinating and a lot of 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's almost unimaginably difficult to make the transition that's now underway because we still rely on fossil energy for

80% of the world's energy use. that seems like a worthy challenge to take on. i'm 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 would 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've melted so much ice in the arctic, the temperature is going there, turninger up the temperature toward the equator. and so you get these storms that

are just locked in place for days at a time. that's one example of dangerous that we should not risk crossing. the oceans are another, solidifying oceans, making the temperatures go up so much. we put at risk elements of the ocean food chain. i could give you hundreds of other examples. coral reefs now are really in great danger. so it matters how quickly we win this. but i'm 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 all very much. thank you. ♪

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♪ emma: coming up on "bloomberg best," the stories that shaped the week in business and around the world. >> more tariff trauma as the u.s. and china escalate their trade spat. >> we are hearing china will not engage. >> truth or dare between donald trump and china. >> nafta talks resume but there are no breakthroughs. north and south korea hold nuclear negotiations and the boj on stimulus. >> the doj would be looking at whether any criminal fraud laws were broken. >> the brexit summit produces little progress. the ceo of ubs says his bank is planning for the worst. >> you don't know what is going to happen, how can you invest?