Essay by Eric Worrall
“A cancel culture destroys wealth and progress” – Stuart Kirk’s warning to people who want to silence debate about green investments.
“Climate change is not a financial risk” — HSBC’s head of responsible investment Stuart Kirk resigns
By Velvet-Belle Templeman
Jul 8 2022 1:38PM
Stuart Kirk, global head of responsible investments at HSBC Asset Management has resigned from the bank after an explosive reaction to a recent speech he gave asserting that climate change is not a financial risk.
In a LinkedIn post announcing his resignation, Kirk said that HSBC’s behaviour towards him since the speech has made staying in the role, ironically, “unsustainable”.
“Investing is hard. So is saving our planet. Opinions on both differ. But humanity’s best chance of success is open and honest debate. If companies believe in diversity and speaking up, they need to walk the talk. A cancel culture destroys wealth and progress,” he wrote.
“There is no place for virtue signalling in finance. Likewise as a writer, researcher and investor, I know that words or trading shares can only achieve so much. True impact comes from the combination of real-world action and innovative solutions.”Read more: https://www.itnews.com.au/digitalnation/news/climate-change-is-not-a-financial-risk-hsbcs-head-of-responsible-investment-stuart-kirk-resigns-582404
What message does this resignation under pressure send to investors, about the quality of advice they are likely to receive from their bankers about climate change investments?
Spain proved renewable investments can be very risky indeed, when the Spanish government’s retrospective cancellation of solar tariffs in 2010 bankrupted 10s of thousands people who thought they could rely on the promises of politicians. Britain also slashed solar tariffs in 2011, causing similar pain.
Stuart’s sin was explaining in detail why adaption is a better strategy than mitigation, using the IPCC’s own figures. He also criticised the dubious management of central banking climate risk models:- “Even with a carbon tax, even with growth, they couldn’t make climate risk move the needle, so they had to get their clever little wonks in the back room to put a gigantic interest rate shock in their models to make headlines”.
We may all be about to experience an interest rate shock – but this shock will occur because excessive public borrowing and political attacks on affordable energy have driven up consumer prices and inflation, not because global warming damaged the production of any important commodity.
Now Stuart has “resigned”, and posted a comment on social media about “cancel culture”. Draw your own conclusions.
Don’t expect any further warnings from the banking industry – Stuart’s “resignation” in my opinion sends a strong message that bankers who question the financial fundamentals of green investments get fired, or have to resign.
If you haven’t watched it already, Stuart Kirk’s speech is available here.
Update (EW): Bloke down the pub points out the UK tariff cut in 2011 wasn’t brutally retrospective like Spain’s tariff cut. But I’m guessing some people still got hurt – hard luck if you were already committed to an expensive solar build.