Generation’s Blood urges sustainable investing to get ‘unstuck’

The sustainable finance sector needs to “raise ambition and act” if it wants to overcome its current condition and address the challenges it faces in the coming years, according to David Blood, senior partner at Generation Investment Management.

“We’re stuck as a community. We need to get ourselves unstuck,” Blood said during an address at the Impact Investor Global Summit in London on Tuesday.

While the hydrocarbon sector has played a significant role in impeding sustainable investing, many of the industry’s problems are of its own making, according to Blood. The problems also cannot be attributed solely to the policies of US President Donald Trump, he added.

“We were stuck way before that,” he said, adding that a number of financial institutions and companies have resorted to downplaying climate investments after engaging in “an enormous amount” of greenwashing.

“We’ve overpromised and underdelivered consistently. We have this notion that it’s always win-win. It’s not. There are trade-offs for sure,” Blood said.

In response, the industry needs to regain control of the narrative and rid the market of the view of sustainability as a “value destroyer”, he said.

“We’ve got to hit that on the head: the notion that you cannot consider sustainability when you’re deploying capital,” Blood said, drawing an example of a real estate developer in Florida who fails to fulfil his fiduciary duty by not considering climate change when planning investments.

Blood also urged the industry to institute clearer reporting standards that measure investment impact more consistently and to do away with so many acronyms.

“We do need to have fewer regimes. We need to have fewer acronyms. We need to work really hard on data,” he said.

Return of the sustainability revolution

After almost 22 years in sustainable investing, Blood has seen the market take a downward turn at least three times. After each slump, however, it has returned stronger than before, he said.

“We think that is true because the sustainability revolution is happening. It’s already happening,” Blood said, adding that unsustainable investments will eventually stop on their accord.

“We think it’s certainly not optional,” Blood said of sustainable investing. “The devastation of our economies and the outcomes of not acting are just unimaginable.”

The question, however, is if the industry will act quickly enough, or if it will bear the consequences of inaction.

“We feel we have a responsibility to do so,” Blood said of allocating capital to sustainable investments. “We have the tools to do so and hopefully we will be able to drive our combined economies to a more sustainable footing.”

Steering investments to the Global South

Blood also said the industry needs to consider how it is going deploy capital to the Global South, where climate investment needs are estimated at “something in the order of $1.3 trillion per year”, with half of that likely to come from private capital.

“When you think about the challenges of both climate [and] nature as well as people, much of that is going to be addressed in the Global South,” Blood said.

“We must address that, or we will not achieve any of the objectives we have from a sustainability perspective.”

Just Climate, Generation’s climate investment business, completed a merger earlier this month with São Paulo-based impact investment firm Good Karma Partners and launched a Latin America strategy with backing from the Inter-American Development Bank.

IDB Invest, the IDB’s private sector affiliate, made a $5 million commitment to Good Karma’s impact fund in 2024 and it considering becoming a cornerstone investor in Just Climate’s Latin America strategy.

“We are working to actually deploy into Brazil, into South America, around both nature and energy transition,” Blood said. “We are really using this as an opportunity to prove the business case, to show that it can be done.”

Generation, a sustainable investment management firm founded by Blood, former US vice-president Al Gore and others in 2004, had $29.5 billion in assets under management and $8.4 billion in assets under supervision at the end of March this year.