Al Gore Says Short Term Thinking "Functionally Insane"

Al Gore Says Short Term Thinking "Functionally Insane"

In survey several years ago, CEOs were asked whether they would make an investment that would meet their internal return-on-investment targets and make their business stronger, profitable and sustainable. One hitch: It would also make the company slightly miss its next quarterly earnings estimate.

Eighty percent said no.

That, according to former Vice President Al Gore, is "functionally insane."
"It's not only insane where the values that we share are concerned, it's functionally insane where the well-being of that business is concerned," Gore said today. "It's the wrong decision for the investors, for the shareholders, and for all the stakeholders."

It all boils down to short-termism, he said this morning in a keynote speech kicking off the annual BSR Conference in San Francisco. Short-term thinking not only runs counter to a healthy and sustainable marketplace, he said, it also prevents serious, much-needed action on climate change.

"We now have about $7 trillion' worth of sub-prime carbon assets in the global economy," he said. "Their value, like the sub-prime mortgages, is based on an assumption that is highly questionable. The assumption is that it is perfectly O.K. to dump 90 million tons of heat-trapping pollution into the thin shell of the atmosphere surrounding our planet every 24 hours as if the atmosphere is an open sewer."
The parallel between the sub-prime mortgage mess and the climate change crisis can be described by the mentality of "IBGYBG," Gore said: "I'll be gone, you'll be gone."

He called for policy changes, a tax on carbon, loyalty shares that reward long-term equity-holders and a tax on financial transactions, which may curb the high-frequency stock trades that drive short-term financial thinking.

Businesses must also take a lead role in driving the market toward sustainability, Gore said. Their numbers may be growing, he said, but not without some familiar challenges.
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BSR Conference 2011

This is the weblink for the conference. I don't know if Mr. Gore knew this but two of the sponsors were Chevron and EXXON Mobil. Two companies that definitely do not care about the type of investing he was talking about. I really wonder if some of these criminal polluting companies just throw some money around into sponsoring these events to greenwash themselves. That is also something we need to be very vigilant about. Chevron destroyed the Ecuadorian Amazon and refuses to pay for it Mr. Gore. And you know the story of EXXON Mobil as well as their financial support of climate denialism. They are the EPITOME of short term profits and damn everything else, especially environmental stewardship.

"He called for policy changes, a tax on carbon, loyalty shares that reward long-term equity-holders and a tax on financial transactions, which may curb the high-frequency stock trades that drive short-term financial thinking"

These are all good ways to bring our perceptions of the world back to where investing isn't just tantamount to standing at a craps table in a casino. Also, it is not just about the money, but the moral investment along with the financial that ensures growth and sustainability not only of the investment but the environment. You simply cannot have true growth in a short term market timeframe. As we have seen it only leads to collapse.

There was a time when people who were entrepreneurs with big ideas sought out longterm investing in the hopes of those ideals not only making profits over the longterm, but also in bringing about an atmosphere that was not exclusive, predatory, or tipped to only favor one specific entity at the expense of all others.

However, this is a symptom of a bigger societal problem where quick fixes and getting everything fast has infected every part of society. Fast food, instant messaging, fast internet connections at lightning speed and quick fix democracy (case in point the 2000 USSC decision that picked the wrong man as president) are just a small sampling of the society we have made where fast transactions for quick profit and gratification without considering the consequences have now also led us to a climate tipping point. And yes, that is insane and needs to change if we are to save our markets and ourselves.