Spencer Glendon walked onto the stage of one of the world's most exclusive investment conferences. He had a chilling message for the 3,000 portfolio managers, asset allocators, private investors, and other Wall Street elites gathered at New York's Lincoln Center. "I hope this is clear," he told them in May 2019. "Civilization is built on a stable climate and we are now moving rapidly into instability. And I'm quite sure that people's financial models don't reflect that."
Those models, Glendon warned, don't reflect Disney World being unable to operate because of extreme heat. Or Florida going bankrupt once banks stop lending for coastal mortgages. The Sahara Desert jumping the Mediterranean and causing permanent drought in much of Europe. India's economic growth sputtering because it's too hot to work outside. "I know [climate change] is unlikely to be your number-one priority now, but what I'm telling you is it will be," Glendon told the Sohn Investment Conference. "When that happens, if you wait, if you wait for it to be forced on us to be the number-one priority, we will not live in a place where you can have free markets. It will be a disaster."
Glendon is a senior fellow at the Woods Hole Research Center in Massachusetts with a PhD in economic history from Harvard University. He spent 18 years working at Wellington Management, an investment firm with $1 trillion in assets. So he's aware of the catastrophic risks posed by climate change, but he also has an insider's perspective on why so many financial players ignore those risks by building luxury condo towers on coastlines that will certainly be flooded, or pumping money into a fossil fuel industry that cannot exist in a zero-carbon world.
Through speaking invitations to events like Sohn, or a September gathering of real estate power brokers in Washington, D.C., as well as his relationships with major investor and consulting groups, Glendon has access to the upper levels of the financial world. His audiences include the types of people who met in January for the World Economic Forum in Davos, which for the first time ever identified environmental destruction as the top five things worrying the global elite, even as a separate survey showed that business executives rank climate change 11th on their list of concerns.
Glendon zeroes in on these alarming disconnects with a message most elites would rather not be confronted with: if our society doesn't wake up soon to the catastrophic risks hurtling toward us, our civilization will become more dangerous, crisis-stricken and authoritarian than most people will admit—and not even the financial world's upper echelons will be protected from the chaos.
"When we look back at this period, it will be the time when we made the big decisions that mattered and so there are opportunities for real leadership and if we don't get it we will have catastrophe," he recently told VICE.
Glendon is trying to shock investors out of the idea that climate change is not really that big a threat and instead get them to make fighting the climate emergency their top priority. But he's not really an activist, nor is he trying to build a grassroots social movement. He doesn't lobby or shame politicians. He has no known social media presence to speak of. And though he's quoted in the press on occasion, he doesn't go out of his way to seek the media's attention. It took a month of back and forth to get him on the phone. "I appear much more extroverted than I am and I never sought to have a public profile, but it turns out that the world needs people to speak up," he said.
Early on in his career, Glendon, who is now in his 50s, noticed a blind spot in the financial world that has had a profound influence on his worldview. The typical approach for an investor is to specialize in a narrow topic in the hopes of gaining an edge on competitors. For example, he said, "in finance there is the autos analyst, and the telecoms analyst and the semiconductors analyst and the banks analyst and the non-banks financial analyst." But it often means that large topics which don't fit neatly into any one investor's area of expertise "are literally never talked about, just completely abandoned, left alone," he said.
Those are the topics to which Glendon decided to devote all his attention. His first big one was to look at how the rise of China would impact financial markets and the global economy. "That was in the late 90s and early 2000s," he said. "At that time there was nothing to buy in China, there was no price for stocks or bonds for an international investor to buy, so no one spent any time working on it." Glendon began doing research trips to China. "It turned out that actually a lot of insight was lying around that the financial markets had not paid any attention to," he said. Over the next 18 years, U.S. direct investment in China rose by more than $100 billion.
Glendon went on the search for other world-shaping topics that no one in finance was paying proper attention to. "I started working in 2012-2013 in climate change because it fit all those criteria," he said. "Nobody really talked about it. When they did, they had very bad information about it, they were clearly not informed, and it wasn't anybody's full-time job." Glendon dug in deeper and learned scientists had for decades been making scarily accurate predictions about global temperature rise, whereas most financial and economic models are awful at predicting the future—see for example the devastating 2008 crash. He saw that there was a gap between the scientific understanding of how the world was changing and the financial world's seeming refusal to acknowledge those coming changes.
"So the notion that climate science had great forecasts and finance had terrible forecasts and yet no one in finance used climate science struck me as a peculiar state of affairs and I tried to figure out what I could do about it and learn from it," he said.
Some of Glendon's predictions are shocking, if plausible.
Last fall, he told the Swiss financial news outlet Finanz und Wirtshaft that with governments around the world adopting increasingly stringent carbon policies most air travel could become a luxury for the wealthy. Europe's cheap airlines will disappear. "At some point, oil companies are going to be worth zero," he told the outlet. He added that within the decade some areas of India will become uninhabitable: "It will be too hot and humid for the body to effectively cool itself by sweating."
But Glendon thinks the consequences of climate change could be felt even sooner than that in places like Florida. Though it could be decades before extreme heat and flooding make it hard to live in much of the state, all it might take to cause an exodus of investors is a few banks or other financial players acknowledging that a 30-year mortgage made today is potentially worthless because the property could be chronically flooded before the mortgage is paid off.
"When that happens, everything will go with it. When real estate even slows in Florida, the economy will go to hell. It could happen tomorrow," Glendon told the Sohn Conference.
He was effectively telling some of the most powerful people in the financial world that what they thought they knew about climate change was dangerously incorrect.
"I think his presentation was really popular. I think people really liked it," said the New York-based financial writer Michael Brush, who watched Glendon speak at Sohn and later did a column for MarketWatch about "how to position your portfolio so it can survive climate change." Brush told VICE that he doesn't spend much time thinking about global temperature rise but that Glendon's predictions on Florida seemed convincing. "He was one of the first people I'd heard who offered real clear investing ideas on the impacts of climate change—who knows whether he'll be right or wrong, that remains to be seen, and a lot of what he was saying seemed pretty extreme to me, but maybe he's right," Brush said.
"I was a lender in Florida until this conference," reads a comment under the YouTube video of Glendon's speech. "Yes, I knew most of this already, but this well articulated speech was the final straw. We are pulling out."
When Glendon talks about the destabilization of civilization due to climate change he can almost sound like a spokesperson for Extinction Rebellion or the Sunrise Movement. But there is an element missing from his analysis that makes it unlikely he would ever be embraced by the climate left. He sees investor inaction as the result of improper incentives and information: communicate the financial risks of climate in a compelling enough way, and decision-makers could be convinced to put their influence and resources into mitigating those risks.
Those distrustful of Wall Street might point to a simpler reason for inaction: short-term greed. How else to explain the $1.9 trillion in financing that the world's largest banks have given to the fossil fuel industry since the Paris climate agreement was signed when it is obvious that burning coal, oil and gas helps contribute to horrific disasters like the bushfires in Australia?
Unlike many climate activists, Glendon avoids taking a harsh line on the business world. "I want to help people who have influence make better choices and arguing that they're terrible people doesn't help that," he said. "I'm trying to find a way to get people to see this [crisis] without it involving shame but not mitigating the message that this is dire."
Shame can be effective in some circumstances however. When BlackRock CEO Larry Fink this January announced that fighting climate change would be central to the $7.3 trillion investment company's business, it was partly the result of protest and pressure from activist campaigns like BlackRock's Big Problem and progressive lawmakers like Rashida Tlaib, who for months had publicly shamed Fink for investing in climate-destroying companies despite claiming to be sustainable. "I think its reputation was really under threat and I think you saw BlackRock responding to that," said Diana Best, a finance campaigner with the Sunrise Project.
With climate disasters getting worse and the business model for fossil fuels looking shakier than ever, she went on, investors have no excuse for continuing to bankroll the climate emergency. "All these things are coming to a head, it's no longer that investors, asset managers, fiduciaries don't have the right information, they have the right information and they have a very clear choice to be making right now," she said.
Glendon is trying to make that choice as stark, visceral, and urgent as possible to the people running our financial system. These investors and decision-makers can continue to "play Russian roulette with our hospitable planet" by financing industries that destroy our stable climate, he has said. Or they can do the hard but necessary work of actually waking up to the emergency bearing down upon us and transforming our entire society to avoid it.
Glendon ended his speech at the Sohn conference with a call to action crafted specifically to the one-percenters in the crowd.
"Take advantage of all the people who come to you and want to talk about things," he told the room. "You can talk to your clients, your counterparties, your lenders, the banks, the politicians who ask you for money relentlessly, and the companies you invest in. You can push those ratings agencies and say 'we should have better zoning and building codes, electrify everything, promote clean energy.' It's good for business. If you want your kids to go to conferences like this we should do this now."
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Geoff Dembicki is the author of Are We Screwed? How a New Generation Is Fighting to Survive Climate Change. Follow him on Twitter.