Stuart Kirk has resigned from his role as global head of responsible investments at HSBC.
Kirk, who held the role from 2021 to 2022, took to LinkedIn to announce the resignation, in which he detailed his reason for leaving.
He said: “Ironically given my job title, I have concluded that the bank’s behaviour towards me since my speech at a Financial Times conference in May has made my position, well, unsustainable. Funny old world. Over a 27-year unblemished record in finance, journalism and consulting, I have only ever tried to do the best for my clients and readers, knowing that doing so helps my employer too.”
In the controversial speech, which was given at the Financial Times’ Moral Money Europe Summit in May, Kirk challenged the current understanding of the financial markets’ attitude toward the “climate catastrophe”. He claimed that “the constant reminder that we are doomed, and the constant reminder that within decades, it’s all over, is getting a little out of hand”.
As part of his speech, Kirk gave a presentation in which he showed the audience a graph from Bloomberg data, indicating that from 2011 to present day, as the warnings surrounding climate change increased, the risk asset prices increased in value. In response to this, Kirk questioned: “Why are prices going up with our own demise?”
Kirk claimed it was either because climate risk is negligible, climate risk is already considered in the price, or because all investors are wrong.
Kirk went on to say: “The first argument the industry makes is that climate change is going to risk future growth. The common argument is that it is going to hit GDP in the year 2100. It is a long way away. [At that point] they reckon it is going to lop off at 2.5 per cent. Their worst case models lops off 5 per cent. What they fail to tell everybody, of course, is that between now and 2100, economies are going to grow a lot. But the world is going to be 1000 per cent richer. If you lop 2 to 5 per cent off that in 2100, who cares? You will never notice.”
“That wealth is going to be important, because adaptation is going to be a key reason why it won’t just be the financial implications that are going to be de minimis, but the actual lifestyle implications will be de minimis as well.”
He went on to say: “Human beings have been fantastic at adapting to change and adapting to climate emergencies, and we will continue to do so [...] the financial industry spends way too much on mitigation financing, and not enough on adaptation financing.”
Kirk concluded the presentation by saying: “Humans are spectacularly good at managing change.” He highlighted the long-run return of the S&P 500 from the year 1930 to the present day. The graph showed that despite a world war, an oil crisis, financial crises and the COVID-19 pandemic, the long-run return still went “up and up”. Kirk added that it will “continue to rise at 6.5 per cent, for as long as toast is toast, and climate change won’t change that either.”
Explaining further on LinkedIn why he had resigned from HSBC, Kirk added: “Investing is hard. So is saving our planet. Opinions on both differ. But humanity’s best chance of success is an 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.
“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.”
In the statement, Kirk also detailed his new project which he said will “deliver what is arguably the greatest sustainable investment idea ever conceived. A whole new asset class.”
He added: “To be announced later this year, the first project will underline the central argument in my speech: that human ingenuity can and will overcome the challenges ahead, while at the same time offering huge investment opportunities.”
“Meanwhile, I will continue to prod with a sharp stick the nonsense, hypocrisy, sloppy logic and group-thinking inside the mainstream bubble of sustainable finance. Follow me on LinkedIn if you want to learn the right way to think about ESG – and let me tell you, most of what’s out there is bonkers.”
