Lessons of HSBC banker's viral presentation and his subsequent suspension
ESG may once have been a reasonable and laudable objective, but it has long since become a cult and a scam reminiscent of the indulgences doled out by Mother Church in Medieval times - see Chaucer's "The Pardoner's Tale". It is something not just worthy of criticism, but scorn, ridicule, and derision. In that sense, I think Kirk's delivery was spot on - the idea that his presentation would, and should, trigger any sort of self-doubt amongst the dogmatic is nonsense - they are by definition impervious and closed to other perspectives. The audience he most effectively engaged was the public, by laughing at bankers and ESG fans on their home turf. Bravo!
It should be interesting to have someone explain the difference in effects between 'climate change' and weather... Other than at the political level.
"I don't for one moment deny the facts of climate change."
The enhanced greenhouse effect is a poorly evidenced hypothesis, and the models built on its assumptions perform poorly too. In the 20 years since it was declared that "the science is settled", the data from CERES, The Earthshine Project and the ISCCP have all shown the warming from 1980 was in fact caused by a reduction in cloud cover, not an increase in airborne CO2. The mainstream climate community tries to explain this away by claiming (with little evidence) that the reduction in cloud is a feedback to warming caused by CO2, but careful examination of the direction of causality in the data refutes that too. Cloud is reduced first, the surface warms ~3-7 months later. See the pinned post at my blog tallbloke's talkshop for an open peer review of the sensitivities of the climate system to various forcings, which includes the relevant derivations and data.
It should be noted that ESG as utilised by fund managers is, in effect, a ponzi scheme. Do these fund managers canvas their individual investors, as distinct from other fund managers, to support their ESG views? No, they don't thereby forcing their own views on others.
ESG, decarbonisation and net zero are, without a doubt, the mega-themes of global financial markets this decade. Until they’re not. Bubbles can only be observed through the rear-view mirror.
This is a well-written account of someone who was courageous enough to say what needed saying to those who needed to hear it. It's too bad that Kirk may be looking for new career opportunities as a "reward" for his courage, and that those to whom he addressed his presentation likely had their ears stopped (or wouldn't admit it if Kirk's presentation resonated with them).
A paraphrase of Sun Tzu comes to mind: Fight the battles you can win. This one was lost before Kirk got to the podium. There are exceptions, of course: Thermopylae, and it's more recent analogue The Alamo.
I sincerely (!!) hope that Kirk finds a satisfying and fulfilling career alternative. That would be some vindication, at least.
I'd also say Jerry Maguire is not an appropriate comparable fictional character but instead Mark Baum, the fictional Steve Eisman from Big Short who was ridiculed by the arrogant folks at the big banks on the wrong side of history...
I just hope Western governments and financial institutions get over their "transition" fixation before we are all speaking Mandarin.
Doesn't strike me that he said anything that Warren Buffett hasn't been saying for years. But, Buffett is an uber rich uber celebrity. He can only be worshiped. He can't be cancelled. It really stinks when you have to have $100,000,000,000 in your pocket to be able to tell it like you see it.
Thank god for someone willing to point out the madness. Ever since I read IMF projections for global GDP growth out to 2100 in a paper from 2019, I've been asking the same thing. How do we square the "existential climate crisis" story with the IMF predictions that it will barely be a rounding error on our increase in affluence?
It would be one thing if the Chicken Littles were the lunatic fringe of environmental activism. But no. They are the world's mass media, the Secretary General of the United Nations, Hollywood glitterati, the Pope, heads of government. Every one of them is peddling mass hysteria. And let me make the obligatory disclaimer that, like Prof. Pielke and HSBC's Stuart Kirk, I don't for one moment deny the facts of climate change. But I am terrified by the potential for malinvestment and especially the total undermining of our energy infrastructure without which -- for an absolute certainty -- far more people will die than under any IPCC climate scenario.
"This was perhaps the greatest failure of his talk — the delivery not only eclipsed the content, but it has also made it much harder to raise these issues in the future."
...this seems dangerously close to a call for civility. As many have correctly pointed out calls for civility are always BS. Engaging in classic Oxford debate form is exactly what's needed. Had he taken the civil route he would have been ignored...and summarily fired, anyways. Good on him for shaking things up...
While I have no issue with E, S or G as important parts of any business and it’s associated impact on the community, the ESG movement is really just another layer of compliance costs which is designed to enrich management consultants. The ability to give “ESG scores” is just going to be another type of financialized, virtue signaling, government mandated garbage, just like the invention of Renewable Energy Credits were a boon for Enron. Hence the anger from the CEO of HSBC as I’m sure he wants his firm in on the game.
The positive side though, is that reasonable people might just be able to make decent returns by betting on companies with lower ESG scores, since that means they actually produce things of physical value. Especially now that it is becoming clearer what the downstream effects of this type of capital starvation has done to the fossil industries.
There are two main items on the "things we think but do not say" when it comes to climate change.
First, as Mr Kirk pointed out, the direct effects of climate change will not overly impact the global north. In fact there may be some benefits for some areas and we can afford to adapt to the rest.
Second, the thing the global north actually worries about, is the billions of people in the global south upping sticks and heading north. It's the real reason we give so much in foreign aid, so they stay in their own countries. But if climate change makes those countries uninhabitable, then we're in trouble.
Dr. Pielke, I'm concerned that the weight of your commentary is on the visuals rather than the substance of Mr. Kirk's presentation. It seems you are trying to straddle the issue to avoid personal criticism The fact that our financial institutions are lying to us about climate risk should be bruited far and wide, not personal recriminations towards the messenger. Additionally, I liked the humor and down-to-earth presentation by Mr. Kirk..
A really fine deconstruct, Roger.
Doesn't bother me that he used this venue to inject some common sense into the ESG industry. They're putting pensions and 401Ks at risk with this nonsense and investing OUR money into their chosen companies. From what I've read elsewhere, the presentation was vetted by HSBC beforehand and given the thumb's up by the powers that be. Maybe they realized that ESG needed a good shock to the system and threw Kirk to the wolves to do it. The biggest take-away was the chilling effect this will have on future execs trying to bring sanity into the climate debate.