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HSBC’s internal cancel culture

A few days ago, HSBC (which is listed in London and Hong Kong) suspended Stuart Kirk, head of responsible investing at the lender, because of how he scorned efforts by regulators to exaggerate the financial and market impact of Man-made global warming. He gave a presentation, “Why investors need not worry about climate risk”, and this seems to have ruffled a few feathers at the bank. (Here is a link to his presentation.)

As the Wall Street Journal comments:

“Unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong,” one of his slides noted. He highlighted sky-is-falling quotes from banking potentates such as Mark Carney, the former Bank of England Governor, who recently said the damage from climate change will dwarf the current pain from rising prices. Tell that to the working folks dealing with 8% inflation.

But then of course scoring virtue points about climate change is so much easier than not printing lots of money and trying to control inflation, I suppose.

By the way, I love Mr Kirk’s business title, “head of responsible investing”. As opposed to what, “head of irresponsible investing”, or “lazy investing” or “immoral investing”?

There appears to have been quite a bit of pushback, and I am thinking of ordering some popcorn. Standard Chartered chief Bill Winters is reported to have said that all should be free to “speak their mind” on environmental issues, even if executives disagree with them. (Standard Chartered, which is listed in the UK, makes much of its money in places such as Asia.)

And here’s another point: both HSBC and Standard Chartered, given the importance of Asia to their earnings, in 2020 backed Beijing’s imposition of a national security law in Hong Kong, designed to crush democratic opposition to moves around ending Hong Kong’s independence in legal terms under the agreement signed with the UK. Both these banks make much of their environmental, social and governance (ESG) credentials. Where does their defence of China’s bullying of Hong Kong leave their “social” or “governance” credentials, may I ask?

ESG is now a corporate religion in the industry that I report on. It is impossible to seriously criticise it, it seems, without endangering one’s career. That said, I think the hypocrisies and cognitive dissonance involved is showing strains. HSBC may regret suspending a man for telling what is essentially the truth. He is right that there is a lot of self-serving nonsense around ESG and that some people are making a fat living out of it. I hope Mr Kirk, if he is forced out, sues the pants off the bank.

The aforementioned WSJ article notes:

If climate change poses such an enormous economic threat, Mr. Kirk asked, why did asset prices surge as doomsday warnings increased? Either climate risk is negligible, climate risk is already in the prices, or all investors are wrong, he said. If you believe the latter, then you don’t believe in markets and shouldn’t be regulating them.

Credit to Mr. Kirk for exposing the hubris of the regulatory climate emperors even as his superiors shrink in fear.

8 comments to HSBC’s internal cancel culture

  • Fraser Orr

    If he was head of “responsible investing” that sure sounds like “head of woke enforcement” to me. They say if you dine with the devil you should use a long spoon.

    or all investors are wrong, he said. If you believe the latter, then you don’t believe in markets and shouldn’t be regulating them.

    This seems an odd thing to say. If you believe in markets you shouldn’t be regulating them either.

  • Frank S

    Mr Kirk is wise and correct about the climate scaremongering, and perhaps naive about his company. I fear this will encourage more kow-towing to the fatuous notion of a climate emergency. But, maybe just maybe, it will encourage other brave souls in high positions to take a stand against this modern ‘madness of crowds’. The climate is behaving just as it might be expected to if the additional CO2 was of marginal importance. Plantlife on the other hand has been behaving just as it might be expected to if it has been starved of the stuff.

  • bobby b

    Religion is correct. It’s back to selling moral indulgences, usually on OPM.

    I used to have to pre-qualify law firms in the markets across the US so we’d have someone to hire when needed. The woke firms would show me glossy brochures about their diversity-hiring practices and their socially-enlightened policies and their pro-bono work shutting down bad people, and I’d know that they were simply going to charge me extra so that I could use my corporation’s money to assuage my own moral insecurities.

  • Nicholas (Unlicensed Joker) Gray

    I usually chuckle at some of the titles here in in NSW, Australia, like The Serious Fraud Squad. Is there a light-hearted Fraud Squad? And Criminal Justice? Is there an Honest Justice Department? Still it’s not just the public sector. We did have a Real Estate company called Integrity, but all you noticed about their billboards were ‘Integrity- for sale’! Had to admire their honesty!

  • Even before this, it was my impression that the HSBC wanted to be the PCest-of-them-all bank. I grant it is in contention for that title, but does anyone know a high street UK bank that is clear-headed enough to intend not to win that contest? (For clarity, that is not merely a rhetorical question. I wouldn’t have thought HSBC was trying hard if I had seen every single other bank trying every bit as hard.)

    The Samizdata Quote of the Day above this one shows someone trying to provide financial services that put customers, not wokeness, first, but that’s not a high street bank.

  • Stonyground

    I can understand the need to keep the climate catastrophe narrative alive. After so much time trillions worth of public and private money have been invested on the premise that it is true. But the fiction can’t be maintained for ever.

  • James Hargrave

    Remember those old adverts for the Royal Hong Kong Police – ‘the best police that money can buy’! An Honest Justice Department would be welcome in Vic as well as NSW.

  • Frank S

    Over at Watts Up With That, there is an essay hoping that Mr Kirk has dealt a fatal blow to the ‘Climate Investment Industry’: https://wattsupwiththat.com/2022/05/29/did-hsbc-stuart-kirk-just-kill-the-climate-investment-industry/
    That would be a good thing if he has done so.