Jeremy Grantham to Invest $1 Billion in Climate Action

Jeremy Grantham to Invest $1 Billion in Climate Action

Investor Jeremy Grantham plans to devote 98 percent of his net worth, or about $1 billion, to addressing the effects of climate change, Bloomberg Businessweek reports.

The British-born co-founder of investment management firm Grantham Mayo Van Otterloo (GMO) has been warning investors for years that humans are losing the "race of our lives" — and urging scientists to raise the alarm about data which suggest global warming is accelerating. The 2000 U.S. election was a turning point for Grantham and his wife, Hannelore, who until then considered themselves "conventional" environmentalists. "I began to realize that there were major-league deficiencies in capitalism which had not been on my radar screen," he told Bloomberg Businessweek, and "I had no idea how deeply the propaganda machine of the right wing went and how well funded it was, how smart it was, and how far ahead of the curve it was. The left were ignorant in comparison." By 2011, Grantham was protesting the Keystone XL pipeline outside the White House with his climate activist daughter.

The Granthams currently give more than $30 million a year to eight large nonprofits and about thirty smaller ones through the Grantham Foundation for the Protection of the Environment. Recipients include the Grantham Institute for Climate Change at Imperial College London, the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, and the Grantham Centre for Sustainable Futures at Grantham's alma mater, the University of Sheffield. While the grants fund a variety of climate research and policy projects, Grantham focuses his public presentations on overpopulation and famine. "Agriculture is in fact the real underlying problem produced by climate change," he told Bloomberg Businessweek. With topsoil disappearing at a rate of 1 percent a year and "only thirty to seventy good harvest years left depending on your location," farmers will struggle to feed the planet, even as rising sea levels inundate the world's great rice-producing river deltas. "Even without climate change," said Grantham, "it would be somewhere between hard and impossible to feed 11.2 billion" people, the United Nations' median population estimate for 2100.

Grantham is not without contradictions and delights in being provocative. A father of three and grandfather of six, he applauds the falling fertility rate in most of the developed world and says of climate skeptics, oil and chemical company executives, and politicians who fail to take climate change seriously that "perhaps they hate their grandchildren." The billionaire investor believes that while capitalism "does a million things better than any other system," it fails completely on long-term threats such as climate change. Yet, while he plans to donate $1 billion to address the problem, he also hopes climate change provides him with opportunities to make even more money. In April 2017, GMO, which has about $70 billion in assets under management, launched a Climate Change Fund that invests in companies and commodities expected to benefit from decarbonization — including clean energy, agriculture, water, energy efficiency, and commodities such as copper that are used extensively in green technology. In pitching the fund to investors, he also champions divesting from fossil fuel stocks.

About a fifth of Grantham's own investment portfolio currently is "mission-driven" — mostly startups working on fusion power, an ultra-efficient car, "next-gen" agriculture, and a cheaper, smaller, and lighter battery. All Grantham's philanthropic and investing work is done just down the hall from his office, where Ramsay Ravenel, the foundation's executive director and one of two full-time staff members, sits. "We can move fast. We answer to nobody," said Grantham. "We know this is an urgent topic, and I know I don't have that long to do it."

Ben Steverman. "Investing Prophet Jeremy Grantham Takes Aim at Climate Change." Bloomberg Businessweek 01/17/2019.