Calm heads make a welcome return to ESG debate
In May 2022, HSBC’s head of responsible investing, Stuart Kirk, took to the stage at a City conference and did something extraordinary; he criticised the financial services industry’s obsession with climate change.
With a degree of candour that would ultimately cost him his job, Kirk said “I feel like it’s getting a little bit out of hand, the constant reminder that we are doomed,” adding “Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages and that’s a really nice place.”
He took particular aim at the number of people employed in his industry to focus on climate change, and the amount of regulation that comes with it. At the time, HSBC said Kirk’s views “do not reflect the views of HSBC Asset Management nor HSBC Group in any way.”
Kirk’s full speech was occasionally bombastic but it was also insightful, thought-provoking and, it seems, ahead of its time. Earlier this week the chair of investment giant Aberdeen, Sir Douglas Flint, told another City conference that his industry has been guilty of making “ridiculously extravagant claims” about “saving the world.”
He went on to say that this enthusiastic embrace of E and S in ESG “became a marketing thing.” For others, it was more than a marketing gimmick with some investors actually adopting a mindset that “we’re not really about investing money, we’re just jolly good people and we’re saving the world.”
Flint – a former chair of HSBC – said Aberdeen now takes a “much more rational” approach to environment issues by focusing on “the companies that are making the most effective steps towards transition in the portfolios we manage.” This is in effect one of the things Kirk argued for in his colourful intervention three years ago; that money should focus on genuine impact in areas such as mitigation and transition.
Flint’s candour comes at a time when money is moving away from ESG investing as an end in itself; as much as £6.2bn was withdrawn from sustainable funds in the first quarter of 2025, according to data from Morningstar.
Aberdeen has also been on a journey, last week ending its funding arrangement of a host of progressive causes and campaigns. In The Guardian, Polly Toynbee was outraged at this ‘darkening of business attitudes’ but in the City – indeed, in the real world – refocusing a business on what it’s actually meant to do seems like an entirely sensible move.