HSBC Reportedly Suspends Executive for Saying Climate Change is Not A Financial Risk

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HSBC Holdings Plc has reportedly suspended a senior executive who accused central bankers and other officials of exaggerating the financial risks of climate change. The senior executive who has been suspended is a leader in the HSBC's responsible investing team.

The senior HSBC executive, Stuart Kirk, who is based in London, is involved in a role, in HSBC, to consider the impact of investments on environmental, social and governance issues.

Last week, in a Financial Times' Moral Money Summit, Kirk said, "There's always some nut job telling me about the end of the world.". He gave a 15-minute presentation entitled "Why investors need not worry about climate risk", in the FT summit on Thursday. “Climate change is not a financial risk that we need to worry about,” Kirk Said.

Later in weekend, HSBC Group Chief Executive, Noel Quinn, said that an executive’s remarks playing down the risk of climate change are “inconsistent” with the bank’s strategy and don’t reflect views of senior management.

“Who cares if Miami is six meters underwater in 100 years, Amsterdam’s been six meters underwater for ages, and that’s a really nice place. We will cope with it.” 

In a LinkedIn post, Noel Quinn said, "I do not agree – at all – with the remarks made at last week’s FT 
Moral Money Summit. They are inconsistent with HSBC’s strategy and do not reflect the views of the senior leadership of HSBC or HSBC Asset Management. Our ambition is to be the leading bank supporting the global economy in the transition to net zero."

Stuart Kirk was suspended pending an investigation into a speech he made at an event last week, according to the Financial Times, which first reported the story.

According to a 2019 report by IMF, Climate change affects the financial system through two main channels — The first involves physical risks, arising from damage to property, infrastructure, and land. The second, transition risk, results from changes in climate policy, technology, and consumer and market sentiment during the adjustment to a lower-carbon economy.

Exposures can vary significantly from country to country. Lower- and middle-income economies are typically more vulnerable to physical risks.

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