AL GORE and DAVID BLOOD, writing in the Wall Street Journal. Gore and Blood—who are the chairman and managing partner of Generation Investment Management respectively—argue that capitalism needs to focus on the long-term, rather than on quarterly returns. They cite a recent Harvard Business School study (PDF) that tracked the performance of 180 companies over 18 years, and found that the 90 firms that adopted environmentally and socially responsible policies outperformed their peers during that period. Gore and Blood suggest that companies show issue securities that offer higher returns to those who hold onto the shares for a long period of time, to encourage long-term corporate planning.
“The dominance of short-termism in the market fosters general market instability and undermines the efforts of executives seeking long-term value creation. As we face an inflection point in the global economy and the global environment, the imperative for change has never been greater.”