I’ll be writing myself about the treatment of Stuart Kirk, the HSBC banker currently being canceled for his views on climate change and financial risk (the latter is a topic, incidentally, that has been analyzed at some length, and for some time, by the economist John Cochrane, including for Capital Matters, here). It’s an important story, and this piece on it by Rupert Darwall for the New York Post is well worth a read.
As background:
Last Thursday, something extraordinary happened: A senior HSBC banker, Stuart Kirk, told the world that climate change, though real, is not something financial markets need worry about. “Unsubstantiated, shrill, apocalyptic warnings are ALWAYS wrong,” one of Kirk’s presentation slides read.
The reaction was instantaneous. Christiana Figueres, former head of the United Nations climate secretariat, denounced Kirk’s remarks as “abhorrently outrageous,” words that might well describe Russian President Vladimir Putin’s invasion of Ukraine — but a banker’s presentation analyzing climate financial risk for what it is? . . .
Figueres demanded HSBC immediately cleanse itself of Kirk’s remarks and fire the climate heretic. “I do not agree — at all — with the remarks made at last week’s FT Moral Money Summit,” bank chief executive Noel Quinn duly declared, avoiding any mention of Kirk by name. “I am determined that our team won’t be distracted by last week’s comments.” On Monday, it emerged HSBC had suspended Kirk.
This (please see the passages I have emphasized) was something of a surprise:
As Stuart Kirk has discovered, telling the truth is much more dangerous than playing it safe by recycling routine falsehoods about climate risk and existential threats. Distorted, alarmist climate reporting is the norm — and getting worse. Three months ago, the Associated Press announced it was for hire with an $8 million, three-year deal with billionaire climate activists, including the Rockefeller Foundation, to fund 20 climate journalists.
Earlier this month, Reuters ran a story headlined “Tuvalu, sinking in the Pacific, fears becoming a superpower ‘pawn’” with a note saying, “Sponsored by Ontario Teachers’ Pension Plan.” The ESG-oriented plan, a top institutional investor, declares, “We invest to shape a better future for the teachers we serve, the businesses we back and the world we live in.” In fact, Tuvalu is not sinking. Quite the reverse. A study using aerial photographs and satellite imagery found that between 1971 and 2014, Tuvalu had grown by 2.9%. [My emphasis.]
I certainly wouldn’t claim to be an expert on Tuvalu (more on Tuvalu here), but why is a pension fund sponsoring that report? Here (it seems), we see yet another example of ESG and/or stakeholder capitalism widening the gap between investment managers and the interests of the owners, actual or prospective, of the capital they are managing.
One very small bit of comfort for Mr. Kirk. If he is canceled (which he most certainly should not be) by HSBC, he will be in good company. After all, HSBC has done (and is doing) its bit to cancel a free Hong Kong too.
HSBC and Standard Chartered have given their backing to China’s new security laws for Hong Kong.
Both banks made statements saying the proposed law can help maintain long-term stability in the troubled city.
Influential U.S. lawmakers have demanded that one of the world’s biggest banks, HSBC Holdings Plc (HSBA.L), explain its actions in freezing accounts of Hong Kong pro-democracy activists, moves that could leave it liable to severe sanctions under U.S. law.
The bipartisan group of six senators and seven members of the House of Representatives from the Congressional-Executive Commission on China, made the call in a letter sent on Monday to Noel Quinn, group chief executive of HSBC, which has its headquarters in London.
That’s the same Quinn now distancing himself from Kirk.