This negligence is due in large part to how short-sighted corporations can be, Grantham said. "Anything that happens to a corporation over 25 years out doesn't exist for them, therefore, as I like to say, grandchildren have no value" to them, he said.

"Capitalism and mainstream economics simply cannot deal with these problems. Mainstream economics largely ignore [them]," Grantham, who co-founded GMO in 1977, said Tuesday in an impassioned speech at the Morningstar Investment Conference in Chicago. "We deforest the land, we degrade our soils, we pollute and overuse our water and we treat air like an open sewer, and we do it all off the balance sheet."

Jeremy Grantham, the longtime investor famous for calling the last two major bubbles in the market, is urging capitalists and "mainstream economists" to recognize the looming threat of climate change.

The four hottest years on record were 2015, 2016, 2017 and 2018, according to government institutions including NOAA and NASA.

Grantham has been outspoken about his concerns over climate change for years. In 1997, he started the Grantham Foundation for the Protection of the Environment, which gives money to entities that look to protect the environment. Grantham's company also launched the GMO Climate Change fund last year, which invests in wind and solar companies.

Throughout his presentation, Grantham cited a slew of data showing how climate change is impacting soil, grains, temperature as well as general human health. Those numbers, coupled with Grantham's speech delivery, scared a lot of people in attendance at the conference.

Grantham also pointed out that many of the problems with how capitalists deal with climate change stem from the very nature of corporations. "A corporation's responsibility is to maximize profit, not to spend money and figure out how to save the planet," he said.

But Grantham added: "We're racing to protect much more than our portfolios. … We're racing to protect our grandchildren and our species, so get to it."

Grantham correctly called the bursting of the dotcom bubble in 2000 as well as the sharp market downturn in 2008. These calls helped solidify his reputation in the investment world as a legendary investor. However, Grantham's GMO has taken massive hits in recent years. The firm's assets under management have dropped to $71 billion in March from about $124 billion in June 2014 following big bets on emerging markets.