Essay by Eric Worrall
Did Stuart Kirk’s presentation remove the legal protection of false ignorance from financial advisors who sell questionable green investments?
Imagine if hypothesized in the early days of the frenzy that led to the GFC/Subprime Mortgage crash, a senior banker announced very publicly that everyone who invested in mortgages subprime will eventually lose money, have explained in detail what the problem is, and have concluded that based on their carefully reasoned argument, the investments have no real value. Then, in 2008, when all the spinning panels were down, everyone who bought the subprime mortgage products could have sued to get their money back. Subprime bankers will publicize allegations from authorized customers that they have cheated, that they know some of their customers will lose money, before they even sell financial products. that high-risk subprime.
Stuart Kirk’s broad attack on the green investment industry may only do this for the green investment industry. His attack may have stripped financial advisors selling questionable green investments of their legal cover.
Why HSBC’s response to Kirk’s climate speech hurts responsible investing
In an attempt to manage the PR failure from an explosive presentation on climate change by head of responsible investment Stuart Kirk, HSBC’s blunt response could do a lot of damage. for public discussion rather than his own comments.
Via Daniel Flatt
May 26, 2022 updated May 27, 2022 9:56 am
- After Stuart Kirk, head of responsible investment at HSBC Global Asset Management, suggested that climate risks were overestimated, his comments were quickly criticized by top HSBC executives. refused and he was suspended.
- Many are skeptical of assertions by HSBC Group CEO Noel Quinn and others on the leadership team about the group’s stance on climate risks and its commitment to net zero.
- Some groups of institutional investors do not wish to comment on Capital supervision situation, but Kirk raised several important points that merit further discussion.
What’s the difference 16 minutes? Presentations about climate change makes. The now famous speech by Stuart Kirk, head of responsible investing at HSBC Global Asset Management, last week on why investors should worry about today more than things they do for a period of 20 years can be remembered for a similar length of time.
What is less likely to stay in memory is the response of the finance team. It should, however, because it is an equally brazen act of self-defence that will have a broader effect on how financial institutions address public discussions about climate change.
Without skimping through the finer details – as has been widely done – we would emphasize one thing: Kirk has made it clear that he believes climate change is real, but it is not a risk. worrying finances.
The result was an outcry from the public. Many investors and climate experts – and others – have expressed their horror on social media with what they feel is a false view. Furthermore, the company’s current and future customers are considered likely Thus, enhancing their due diligence on asset managers’ climate strategies.
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Read more: https://capitalmonitor.ai/opinion/hsbc-response-to-kirks-climate-speech/
If you haven’t seen Stuart Kirk’s presentation, I highly recommend you do – it probably won’t be there forever.
If Stuart Kirk’s devastating accusations are true, his words could, in my opinion, be interpreted as suggesting inputs for financial models that predict demand for investment products The climates currently being sold are heavily manipulated to produce predetermined results. Stuart appears to claim that he is being “pressured” to add unrealistic assumptions to climate financial models, to “move the needle” about the economic harm predicted from climate change.
If the fact is that there is no real need for green investments and that fact is hidden because, as Stuart seems to suggest, banking and financial models are being heavily manipulated to create a false impression of need – Stuart actually let the cat out of the bag.
Stuart’s presentation is meant to have public domain evidence on the issues. Financial advisors can no longer claim to be surprised, like everyone else, if the value of the green investment products they are selling collapses.
Anyone who loses money on green investments is likely to face a strong case, if they try to sue their financial advisor to get their money back. All they need to do is point to Stuart’s presentation, and argue that anyone with expert knowledge of the climate investment industry should know that there is a problem at the time of the investment product. sold. At the very least, Stuart’s presentation promotes “increased due diligence” – more detailed monitoring of the assumptions that are being incorporated into projections of the future value of climate investments.
Note that I’m not an investment advisor or an attorney, so please don’t quote me on your case – but I think there’s a real possibility that when people look back at the history of green investing, Stuart Kirk can be quietly recognized as the hero who saved us from the worst of the upcoming green GFC, the banker who put the pebble on the blue train tracks before it reached its full potential when the background The global economy burst the investment bubble.
Stuart, you are my hero mate.
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