HSBC has questions to answer after ‘responsible investment’ chief’s climate rant

CEO Noel Quinn has distanced himself from the comments, but the incident has invited scrutiny of the bank’s stated commitment to net zero, writes James Moore

Extinction Rebellion activists protest outside HSBC’s AGM in London (Extinction Rebellion)

Seems climate denialism is a tougher nut to crack than we might have hoped.

HSBC has reportedly suspended a senior banker who had accused central bankers and policymakers of overstating the financial risks of climate change. They were, Stuart Kirk opined, guilty of trying to “out-hyperbole the next guy”.

“There was always some nut job telling me about the end of the world,” Kirk explained at a Financial Times “Moral Money” event last week. He also referred to climate warnings – which have been backed by, you know, science – as “shrill”.

There was reportedly a slide that said: “Unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong.”

Oof.

Kirk’s use of the term “shrill” in that context does rather suggest a lack of self-awareness. He also made himself look quite the “nut job” with his presentation, because he is the global head of responsible investment.

As such, it was a Ratner-esque moment in which Kirk skilfully undermined his own product (it’s remarkable how common that is in business). People who are keen on responsible investment tend to be well aware of the problems we face through rapid, irreversible climate change. They take them seriously. They are keen on seeing the problem tackled. They do not see climate warnings as “shrill” or refer to them as “hyperbole”. They do not describe their purveyors as “nut jobs”.

Climate campaigners immediately urged investors and pension funds to ask questions of HSBC Asset Management. And so they should.

The bank’s shareholders might also want to ask questions of the institution itself. Lately, HSBC has been making an awful lot of noise about “becoming a net-zero bank”. There’s a page on its website devoted to what it is doing, with a picture of one of its buildings surrounded by solar panels. An earlier version of the same page featured trees.

What’s next? Animals or children? One or the other of those has to be good for whoever’s in charge of greenwashing this week, because isn’t that what this is about? Or at the very least, the superficial commitment of this bank to its lofty goals?

The FT has reported that the speech was cleared internally, and of course it was. Senior bankers, even those with fancy global titles like Kirk’s, aren’t in the habit of attending conferences and making speeches without first getting them cleared by those further up the chain of command.

In fact, the title of this one was publicised in advance of the event. So either someone was asleep at the wheel, or they decided that what Kirk was going to say was uncontroversial enough to pass muster.

Want to get on in banking? Or in corporate life in general? The first rule of thumb is to obey “London Rules” – with apologies to the spy writer Mick Herron – which means cover your a***.

That holds sway in the City of London just as Herron’s first-rate books say it does in the intelligence services.

Kirk’s comments were stupid. Very, very stupid. On a level with some of the anti-vax stuff, which comes from a similar, science-denying place. Trashing scientific fact is always stupid.

But Kirk at least obeyed London rules. His lawyers will be pleased, should he have cause to call on them.

Funnily enough, he may actually have done us a favour. No, really. His words rather help to expose the skin-deep acceptance of reality that persists in some of the world’s biggest financial institutions.

BlackRock, another money manager, has also been busy backsliding of late, having warned that it plans to support fewer climate resolutions during this year’s AGM season. It only likes them when they’re sufficiently “well written”, for which read “light-touch and limp”.

Corporate greenwashing is, meanwhile, depressingly easy to find.

This will not do if there is to be a habitable planet for our children to live on. This will not do for investors who don’t want their returns hammered by the rapid climate change we are starting to witness the beginnings of – and this year has already seen more episodes of super-heat in various parts of the world.

HSBC executives have, naturally, been furiously back-pedalling in the wake of the comments.

“I do not agree – at all – with the remarks made at last week’s FT Moral Money summit. They are inconsistent with HSBC’s strategy and do not reflect the views of the senior leadership of HSBC or HSBC Asset Management,” CEO Noel Quinn wrote on LinkedIn. “Our ambition is to be the leading bank supporting the global economy in the transition to net zero.”

Fine words, but his statement doesn’t deal with how the presentation came to be cleared and delivered in the first place. Mr Quinn and HSBC need to do better than that, not least because their responsible investment division probably has a lot of unhappy clients right now. This little snafu isn’t just bad for the planet. It’s bad for business.