36: GMO's Lucas White - Climate Change, Energy and the Low Carbon Economy

[i3] Institutional Investment Podcast

Lucas White is the lead portfolio manager for the GMO Climate Change Strategy and a member of GMO’s Focused Equity team. Together with the firm's co-founder Jeremy Grantham, Lucas has developed a strategy to invest in companies that are likely to profit from climate change mitigation and the transition to a low-carbon economy. In this episode, MarketFox columnist Daniel Grioli asks Lucas some pretty pointed questions around the viability of ESG-focused investment strategies. GMO Lucas White podcast overview: 1:00 How did you get started in climate change strategies? 5:00 Jeremy Grantham’s research into resources and climate change 8:00 The issue with apply climate change risk models on portfolios 11:00 What is the right way to look at the carbon footprint of your portfolio? 15:00 If you are going to get rid of fossil fuels than you are putting a lot of burden on other materials: copper, cobalt, lithium. 20:00 Looking at the quality of data on climate change 21:30 Figuring out what business models fit the universe. 22:30 Although we believe that electric vehicles are going to take over our motorways, that doesn’t necessarily make us excited about Tesla or BYD. These companies are very expensive. 24:00 A better way to gain exposure to electric vehicles 32:00 Do GMO’s multi-asset funds allocate to the climate change fund? 35:00 Stranded assets: doesn’t it depend on when we stop using these assets? 38:00 Nuclear energy, is it more viable than renewable?