HSBC’s green shotgun fails at a bad time

Stuart Kirk, head of responsible investing at HSBC Asset Management, believes financial professionals need not worry about climate risk. CEO Noel Quinn is conflicted about climate change, like all bank bosses. The elders of the West have joined an alliance that forces them to set demanding decarbonization goals. The bad thing is that they must give up the lucrative business of fossil fuels.

The energy crisis and the war offer banks cover to go slow on green goals. Still, it’s wise to publicly maintain that you genuinely care about global warming. Kirk, to put it mildly, complicates matters.

It’s not because everything he said in a lecture is intellectually incoherent. He says that prices remain high, despite warnings about the catastrophe, because investors understand that the worst effects of warming appear later than, for example, the average duration of the HSBC loan portfolio, which is six years. . That is likely to be the case, and he also explains why Big Oil is still worth something. It is also valid to argue that adaptation to warming needs more attention.

But the thesis was not about why investors don’t panic, but that they should panic less, if at all. His arguments are reminiscent of lukewarm academics like Bjorn Lomborg. Dismissing Mark Carney, former Bank of England governor, as an alarmist, and expressing ambivalence about the possibility of Miami being six meters under water, makes for a saucy presentation. But presumably it will raise the eyebrows of HSBC’s emerging customers who are in the line of fire.

Quinn has publicly distanced himself and Kirk has been suspended, according to the FT. Impartial observers can be forgiven for assuming that financial executives’ climate concerns are only skin deep. Talks about slowing decarbonization targets will now be more difficult.