Climate Skeptic Banker Becomes Latest ‘Cancel Culture’ Victim

By Emel Akan
Emel Akan
Emel Akan
reporter
Emel Akan writes about business and economics. Previously she worked in the financial sector as an investment banker at JPMorgan. She graduated with a master’s degree in business administration from Georgetown University.
July 11, 2022 Updated: July 14, 2022

News Analysis

Cancel culture is growing more prevalent in the financial industry, with a prominent HSBC executive being its latest victim.

Stuart Kirk, a top executive at HSBC Holdings announced on July 7 that he had resigned from his position after facing backlash from climate groups. Kirk, who was the global head of responsible investments at the bank’s asset management business, had been suspended after criticizing central banks and regulators for overstating the financial risks of climate change.

At a Financial Times conference in May, the British banker said central bankers are inflating the financial risks of climate crisis in an effort to “out-hyperbole the next guy.”

During a presentation titled “Why investors need not worry about climate risk,” Kirk remarked that in his 25-year career, “some nut job” was always telling him about the end of the world.

“But what bothers me about this one is the amount of work these people make me do, the amount of regulation coming down the pipes” to deal with the financial risks of climate change, he told during the conference.

The bank promptly suspended his job after his presentation sparked backlash from climate activists.

“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,” Kirk wrote on social media platform LinkedIn, announcing his resignation.

“Investing is hard. So is saving our planet. Opinions on both differ,” he continued. “But humanity’s best chance of success is 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.”

Kirk’s resignation came as banks and fund managers are under increasing pressure to promote the transition to renewable energy and stop funding the fossil fuel sector.

The top central banks in the world, including the Federal Reserve, are scrambling to implement models to analyze the financial risks presented by the alleged climate crisis. Because authorities say the financial system is exposed to this risk, they want institutions to undertake climate stress tests. Additionally, they want to “mobilize” more money for green and low-carbon investments.

These pressures, however, have sparked an industry-wide debate over whether climate change really poses a risk to the financial system. Researchers at the New York Fed found that severe weather conditions such as wildfires, hurricanes, floods, and droughts over the last 25 years had almost no effect on banks’ performance.

Honesty and Courage

From an investing standpoint, Kirk disagrees with the premise that climate change will create winners and losers in the financial markets. He believes that renewable stocks will not always outperform coal stocks since a variety of factors will shift the dynamic.

During his presentation in May, he also argued that valuations of many companies with stranded assets, including those in the technology sector, do not take into consideration anything that happens beyond 20 years.

For example, the typical loan duration at a large bank like HSBC is six years, he explained.

“What happens to the planet in year seven is actually irrelevant to our loan book,” he said.

According to Kirk, the finance industry faces numerous threats that are more alarming than climate change.

People on social media responded to his speech, with some applauding him for his honesty and courage and others criticizing his “outrageous” presentation debunking climate science.

In his resignation announcement, Kirk said that he’s embarking on a new project with “a crack group of like-minded individuals” to deliver “the greatest sustainable investment idea.”

“Meanwhile, I will continue to prod with a sharp stick the nonsense, hypocrisy, sloppy logic and group-think inside the mainstream bubble of sustainable finance,” he wrote.

Violation of US Law?

Cancel culture, in recent years, has taken center stage in public discourse in education, politics, media, culture, and business. Some large banks have also adopted the practice by canceling the credit cards and bank accounts of people and businesses in the United States, with the fossil fuel and firearms industries being major targets of late.

HSBC declined to comment about Kirk’s decision.

Prior to his speech at the conference, the presentation’s theme and content were reportedly approved by the senior executives of HSBC, according to the Financial Times. However, these top officials later distanced themselves from Kirk, stating that his remarks didn’t reflect the views of the bank and its leadership.

“Our ambition is to be the leading bank supporting the global economy in the transition to net zero,” Noel Quinn, group chief executive at HSBC wrote on LinkedIn.

A Republican senator expressed alarm with HSBC’s conduct, questioning its legality.

Sen. Steve Daines (R-Mont.) sent a letter to Quinn in June, asking whether shareholders including asset manager BlackRock or any similar firm pressured the executives to suspend Kirk’s job.

“I am concerned that this episode may involve breaches of United States law,” Daines said in his letter.

Emel Akan
reporter
Emel Akan writes about business and economics. Previously she worked in the financial sector as an investment banker at JPMorgan. She graduated with a master’s degree in business administration from Georgetown University.