+ Al Gore on sustainability as competitive advantage

McKinsey Quarterly published an interview a while back with Al Gore and David Blood. Most of us know Al Gore as the former Vice President of the United States, but he's also a partner at Generation Investment Management, a sustainability investment firm that's getting a lot of attention. Their approach is very compelling, because it illustrates what I think is the next phase of sustainability thinking: making sustainability knowledge and strategy a key component of competitive advantage. In his words:

The market is long on short, and short on long. There’s a widespread recognition within the industry that what has emerged over time doesn’t really make any sense. They know that it needs to change and they are ready for change.

We are in a period of history, right now, when the contextual changes are larger than the ones we’ve been used to in the past. Changes that we’ve associated with very long cycles are now foreshortened and are occurring much more rapidly. Positioning a company to ride out these changes and profit from them often means making stretch investments to change the infrastructure, change the energy source, change the physical plant, and adapt to the new realities. And if there is the tyranny of a three-month cycle, then companies won’t make those investments. So focusing only on the quarter can blind you to the most important factors of all.

It's not just words, though. Generation literally puts their money where his mouth is, with striking results:

If you think about how GE’s stock price is going to trade, it’s going to trade primarily on growth. Jeffrey Immelt knows this. He’s betting his reputation and his company on the notion that the businesses related to the environment will enable GE to grow faster than GDP. In Mexico we cover two Mexican home builders that are linked to demographic trends and to the very strong demand and need for affordable housing in Mexico.

These are just some examples of how companies can see sustainability trends as growth opportunities or as new niches for existing products and services.

Make sure you read the full article here. Free registration is required, but it's well worth the effort.