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Al Gore says the world is finally making progress on addressing climate change

July 14, 2021, 9:06 AM UTC

Al Gore is feeling good.

In 2021, the former vice president and one-time presidential nominee is arguably just as well known as the man who made it hard for viewers to sleep at night with his landmark 2006 documentary An Inconvenient Truth.

So it might be surprising to hear Gore, now the chairman of investment firm Generation Investment Management, repeatedly refer to himself as “optimistic” on climate progress, while reeling off a long list of reasons to be cheerful.

There’s the proportion of newly installed electricity capacity coming from solar and wind—90%—and the dropping costs of renewables and electric vehicles; the huge jumps in investment for improving clean technology; the momentum of the Biden administration on climate change; and the boom in environmental, social, and governance (ESG) investing.

“I like to quote Rudi Dornbusch and his famous law,” Gore told Fortune by video call, referring to the late German macroeconomist. “Things take longer to happen than you think they will, and then they happen faster than you thought they could.”

That “really does describe where the world has been and is going, and the speed with which the transition is taking place in the real economy.”

It’s a paraphrased quote Gore has favored in the past, most recently when tweeting about a landmark day in the history of the oil and gas industry: May 26, when Exxon Mobil and Chevron both received stunning rebukes from investors, while a Dutch court told Shell to pick up the pace of its emissions reductions.

“Keep up the pressure,” he tweeted to his 2.9 million followers. “It’s working!”

When asked if the Biden administration’s focus on climate change has contributed to the momentum, he agreed that it has.

“It makes all the difference in the world, and all the difference to the world, when the U.S. is on side, leading, and really providing the kind of momentum that’s necessary. We saw that in Paris; I think we’re going to see it in Glasgow, as well,” Gore says, referring to the COP26 meeting in November.

He’s hopeful that China, too, will come forward at the meeting with additional commitments, and he points out that when the “U.S. and China move in the right direction, then the rest of the world has a great chance of making COP26 a spectacular success.”

And of course, there’s the stratospheric rise in demand for sustainable investments.

In an annual sustainability trends report, the Gore-chaired Generation Investment Management said that inflows into ESG-linked funds have increased 10-fold since 2015—the year of the Paris Agreement. Over that period, sustainable debt issues grew eightfold, and private equity and venture capital funding doubled. The report also points toward net-zero commitments made by countries—which now cover three-quarters of global GDP—and by the Net Zero Asset Managers initiative, with $43 trillion in assets under management.

Generation isn’t the only one to note the rise of ESG investing; it has been one of the main financial trends in a roller-coaster 12 months. Inflows into ESG products in the U.S. in the first quarter of 2021 set an all-time record of $21.5 billion—five times higher than the first quarter of 2019, fueled by a surge in new financial products, according to Morningstar.

“From our point of view, this has really been a banner year for ESG,” Gore says.

Of course, that momentum comes with a major qualification: There’s always the danger of lumping genuine progress in with targets and claims that lean toward the flimsy, vague, and outright fraudulent.

“The threat of greenwashing is rising,” warns Gore. “And if we were to fail and let greenwashing get out of hand, then that would bring the risk of derailing the progress.”

To illustrate his point, he points toward examples both specific—a recent Greenpeace investigation into Exxon Mobil’s misleading lobbying tactics on climate policy, for which the company’s CEO subsequently apologized—and more broad. That includes the “growing unease” at the low quality of some of the stated net-zero goals, and the gap between some companies’ targets themselves and what’s actually being done to reach them, he points out.

“It’s more common with these long-term goals where companies set a goal decades away, and everybody in the executive team is going to be long gone before that date is ever reached,” Gore says. “A lot of politicians who are making these pledges are in the same situation.”

When it comes to financial investments that purport—without much evidence—to be “green,” governments themselves are starting to crack down. The U.K. said last month that it would launch a technical advisory group to lead on greenwashing; the EU, as of March, also has rules forcing fund managers to show exactly how their products qualify as climate-friendly.

But investors and asset owners are getting much more sophisticated, Gore adds, in rooting out the bluster and “discovering who’s real and who’s not, who’s greenwashing and who’s not”—even as the scope remains “significant” in ESG investing.

His perspective, nonetheless, remains bright.

“Let me emphasize, I’m optimistic,” Gore says. “I think the industry as a whole is moving powerfully in the right direction.”

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