At Redington, we’re committed to creating positive change within the savings and investment industry, helping to build a sustainable future for all. Part of this involves educating ourselves on the issues surrounding responsible investment (RI) – so we’ve launched Redington’s RI Book Club, where every month or so a group of us will be reading and discussing an RI-related book and sharing our thoughts with you. This month, we reviewed How to Avoid a Climate Disaster by Bill Gates.
Whilst we all recognised the biases that Bill Gates has (which he himself calls out) – US-centric, the market will prevail, technology will solve everything – we thought the book was a useful read. It’s accessible, does a good job of framing the sheer size of the issue, and breaks things down into easily digestible chunks. Gates brings things to life, which makes them far easier to remember, such as a gallon of soft drink costing more than a gallon of petrol in the US or equating carbon being released into the atmosphere like a bath with the plug in, which will overflow at some point even if the tap slows to a trickle. His way of breaking things down into how they are made and transported etc. makes it easier for us to identify the areas we should be focusing our attention on first.
We note, however, that there are some obvious gaps. For example, he doesn’t talk about regulation driving consumer behaviour, how important lifestyle change is, or the need to reduce population growth (by definition infinite growth in a finite world isn’t sustainable). In Gates’ view, everything can be solved through efficiency and technology, rather than a fundamental change in human behaviour which many in our discussion group would advocate. This view is probably unsurprising considering the biases noted above, but it’s disappointing that Gates doesn’t give more weight to the change in human behaviour required given his platform and influence.
In his book, Gates talks about the role of pension funds in helping to develop the technology required to manage climate change. We had a long discussion over this point since our experience tells us that UK defined benefit pension schemes, in particular, don’t have the timescale nor risk tolerance to invest in these fledgling areas. That said, we do think institutional investors (as opposed to foundations such as the Gates Foundation) have a place in this value chain, which the diagram below illustrates.
Would we recommend this book?
Rating: ⭐ ⭐ ⭐ ⭐
Stuff we liked: How to Avoid a Climate Disaster is an accessible read and a good primer on the subject.
Stuff we didn’t like: we’d like to have seen greater balance between technology and the human behaviour and governmental policy changes required to tackle climate change.
Unless indicated, these are the author’s views and may differ from those of the firm.