A Green Purge
Banker canceled for talking climate sense
LAST Thursday, something extraordinary happened: A senior HSBC banker, Stuart Kirk, told the world that climate change, though real, is not something financial markets need worry about. “Unsubstantiated, shrill, apocalyptic warnings are ALWAYS wrong,” one of Kirk’s presentation slides read.
The reaction was instantaneous. Christiana Figueres, former head of the United Nations climate secretariat, denounced Kirk’s remarks as “abhorrently outrageous,” words that might well describe Russian President Vladimir Putin’s invasion of Ukraine — but a banker’s presentation analyzing climate financial risk for what it is?
Four hundred years ago, people were burnt at the stake for believing the wrong things about religion. Today, they get fired for questioning the climate-change catechism.
Figueres demanded HSBC immediately cleanse itself of Kirk’s remarks and fire the climate heretic. “I do not agree — at all — with the remarks made at last week’s FT Moral Money Summit,” bank chief executive Noel Quinn duly declared, avoiding any mention of Kirk by name. “I am determined that our team won’t be distracted by last week’s comments.” On Monday, it emerged HSBC had suspended Kirk.
Kirk’s problem is that he is telling the truth, one contrary to the central tenet of environmental, social and governance (ESG) investing — which holds that it is the duty of finance and business to save the world from a planetary catastrophe. In his presentation, Kirk complained about his team being buried in an avalanche of climate-risk reporting.
Article 2 of the 2015 Paris climate agreement has the objective of “making finance flows consistent with a pathway towards low” emissions. As a result, central banks and financial regulators are using every regulatory weapon in their armories to suppress investment in fossil fuels and direct capital flows toward renewables like wind and solar.
Their weapon of choice is the spurious but plausible-sounding notion of climate-related financial risk. In reality, modern economies are remarkably resilient against extreme weather. “How Bad Are Weather Disasters for Banks?” a November 2021 paper by Federal Reserve Bank of New York staff asked. The answer: “Not very.” Federal Emergency Management Agency-level disasters over the last quarter-century had insignificant or small impact on banks’ performance.
In a rational world, this finding would be welcomed. But that would be to miss the point. It is not the reality of climate resiliency that matters but the use of climate risk to push financing flows in the direction of net zero. “There’s a lot to like about climate stress tests,” Federal Reserve chair Jay Powell exclaimed at a Green Swan conference of central bankers and regulators last year.
As Stuart Kirk has discovered, telling the truth is much more dangerous than playing it safe by recycling routine falsehoods about climate risk and existential threats. Distorted, alarmist climate reporting is the norm — and getting worse. Three months ago, the Associated Press announced it was for hire with an $8 million, three-year deal with billionaire climate activists, including the Rockefeller Foundation, to fund 20 climate journalists.
This month, Reuters ran a story headlined “Tuvalu, sinking in the Pacific, fears becoming a superpower ‘pawn’” with a note saying, “Sponsored by Ontario Teachers’ Pension Plan.” The ESG-oriented plan, a top institutional investor, declares, “We invest to shape a better future for the teachers we serve, the businesses we back and the world we live in.” In fact, Tuvalu is not sinking. Quite the reverse. A study using aerial photographs and satellite imagery found that between 1971 and 2014, Tuvalu had grown by 2.9%.
The need to hype climate alarm to drive investment flows to net zero comes at a bigger cost than Stuart Kirk’s job. Painfully high oil and natural-gas prices are hurting consumers and businesses and pushing up the cost of food. Normally, high prices would trigger more investment and more output that would help bring prices down. Not this time. Wall Street — with the full support of the Fed and bank regulators — is stomping down on investment in oil and gas. That’s not just hurting the little guy. It’s hurting the Biden administration and the Democrats.
Two months ago, Energy Secretary Jennifer Granholm begged oil executives to invest. “I hope your investors are saying these words to you as well: In this moment of crisis, we need more supply,” Granholm told them. “Right now, we need oil and gas production to rise to meet current demand.”
It could well be that woke bankers on Wall Street — backed to the hilt by purveyors of scary climate scenarios in the Fed, financial regulators and the media — help sink Democrats’ election hopes in the November midterms.
Rupert Darwall is a senior fellow of the RealClearFoundation and author of “Green Tyranny.”