I used to think that climate change was part of an evolutionary cycle of cool to warm to hot and it would somehow self-correct. But in 2016, I picked up Thank You For Being Late, by Thomas Friedman. I look at the world differently after reading that book. It inspired me to reexamine my views about climate change. The evidence changed my mind and made me then think about my own role in facilitating solutions.
Friedman wrote about three large forces shaping life in the 21st century – technology speed and Moore’s Law, globalization of markets for goods and services, and threats to Mother Nature as it supports life as we know it. These three forces have converged at an accelerating pace. So much so, that I felt the need to learn more about their potential impact on my family, my business, my country and my planet.
- Globalization: I clearly understood Friedman’s forces of globalization. Since the 1980’s, I have included global markets in our investment models. For example, I understand and appreciate that it takes more than six countries to manufacture, assemble, and distribute the Apple iPhone. Also, I had previously read Friedman’s The World is Flat which reinforced my understanding of globalization.
- Tech speed and Moore’s Law (microchip power doubles every two years): I am not tech savvy and I’m certainly not a tech visionary. I have witnessed, however, as we all have, the validation of Moore’s law as we’ve seen technology innovations change our lives with increasing rapid speed.
- Threats to the planet: This is where I was skeptical. I asked “How could a post industrial age temperature rise of 1-2 degrees be important?”
But Friedman’s heavily supported commentary on climate change, biodiversity loss and their impact on Mother Nature’s capacity “to absorb, buffer, and mute the worst impacts on the planet” was quite alarming. I decided to take a deeper look.
As a result, I’ve grown to appreciate the findings in two thorough scientific reports. The Fourth National Climate Assessment Volume I & II (published in November, 2018) is the work of 13 US government agencies (US Departments of State, Defense, Interior, NASA, etc.). I didn’t read all 1,500+ pages but I did digest the summary findings. I found them so compelling that I added them to our website.
The Intergovernmental Panel on Climate Change, a body within the United Nations, produced a report in October, 2018 providing an objective, scientific view of climate change as presented by 90 leading scientists worldwide. The report’s findings are profound and I encourage you to take a look.
There is growing worldwide awareness of accelerating climate change risk. That awareness is across national borders, political parties, and socioeconomic distinctions. I believe that people have the ability and resolve to address the significant challenges we face.
But what could I do? I looked into how this affects investment decision making, the area where I have experience, and an opportunity to use my skills to drive change. Our firm has defined its role. In addition to our traditional and thorough investment analysis, we have added extra layers of research focused on the future profitability of public companies. We examine both the risks and opportunities inherent in how companies respond to the challenges of a hotter planet and which companies are creating invest-able solutions in a global market place.