Experts slam ‘totally bizarre’ analysis that rejected the idea investors should worry about climate risks
A presentation given by Stuart Kirk, global head of responsible investing at HSBC Asset Management, has been called into question by figures across the industry.
In the speech, Kirk questioned whether the impacts of climate change mattered and bemoaned the “amount of work these people make me do” as a result of conversations about the environment.
Co-founder of Fairview Investing Gavin Haynes suggested Kirk’s position may be more accurately titled “head of irresponsible investment” and labeled the speech “totally bizarre”.
“HSBC as a group have already been under fire for their misleading approach to how they promote green initiatives,” he said.
“Culture in an organisation is important when looking for credible ESG investment providers and such views make it very difficult to consider HSBC’s ESG fund range.”
Other fund pickers have also questioned the efficacy of HSBC’s ESG products in light of the speech, with managing director at Chelsea Financial Services Darius McDermott suggesting investors in the sustainable fund range now have a “reason to review” their investments.
“It is hard to know what to say,” McDermott said. “It is not something you would expect to hear from a head of responsible investment.
“It is certainly confusing for investors and at the very least mixed messages if someone in that position is saying what has been reported. We do not invest in HSBC sustainable funds nor are any featured on our buy lists.”
Louisiana Salge, senior sustainability specialist at EQ Investors, also indicated the speech would force the hand of some investors.
“The culture, governance, ambition and stewardship of an asset manager/group are key aspects of our due diligence when picking funds,” she said. “No doubt this will influence other investors that are investing with a sustainable objective and are conscious of the responsibility that comes with stewarding their clients’ capital.”
The speech has brought HSBC’s commitment to climate change ever further into the spotlight, following recent reports the firm is set to be censured by the Advertising Standards Authority over accusations of greenwashing around its adverts, and Julia Dreblow, finding director of SRI Services, raised this element of the story for the banking group.
“I was not there so cannot gauge the context, and it is very easy to take pot shots at the big banks who financed the mess we are now in – so I am not going to,” she said. “But one thing is for sure, this will force HSBC’s hand. If there is no correction issued and no heads roll, we will know a lot more about HSBC than we did a few days ago.”
John Fleetwood, director of responsible and sustainable investing at Square Mile Research, added to these concerns.
“Climate considerations should now be embedded at all levels of a company’s culture,” Fleetwood reasoned. “Climate champions need to advocate for change within all levels of their organisation, and this comment may not reflect that. Confidence in a company’s ESG processes can only be maintained if its messages are clear and consistent.
“This issue requires immediate action, as well as a long-term view.”
EQ Investors’ Salge also suggested that many of Kirk’s comments “seemed to directly conflict with the science” and voiced her concerns over such arguments.
“I just listened to a recording of the talk and am still trying to digest it. His entire speech was trying to explain the lack of climate change impact on finance – he ignored the responsibility of finance in impacting the climate and our transition,” she argued. “Among other points, he presented an affluent-market centric view on the expected impacts of climate change. While he disagreed on it, I believe the discourse around the dooming ‘climate crisis’ is necessary, powerful and accurate.
“I am worried that this type of behavior and tone will be the very reason why we will fail to use ‘big finance’ as a lever to enact the change we need.”
Global director of sustainability research at Morningstar Hortense Bioy described it as “a classic ‘tragedy of the horizon’ type of comment”.
This first article appeared at Investment Week.