HSBC exec suspended after comments about climate change | Hacker News Reader

HSBC exec suspended after comments about climate change

fnlondon.com

41 pointsbelter82 comments

I feel like they deliberately cut off the headline. He said:

"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. We will cope with it."

And that sounds a lot more reasonable to me. He's not dismissing Miami as unimportant, but instead he is expressing his optimism in technical solutions for an environmental issue.

Edit: It's in the video at 6:54 https://youtu.be/bfNamRmje-s?t=414

"Human beings have been fantastic at adapting to change, adapting to climate emergencies, and we will continue to do so. 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. We will cope with it."

Wow, yeah, that totally flips around the context, shame on the clickbait.

That is somehow even worse

Are you really, really sure?: https://youtu.be/bfNamRmje-s?t=100

Yup, edited my replay with the link to him saying it in the video.

I watched that section for a few minutes and saw nothing remarkable in anything he said. Are you really sure you aren't the kind of person he's criticizing? A summary of his comments would be:

1. Claims are over the top. There have been so many wrong claims of apocalypse that it's now really hard to get people's attention. "Most of you barely looked up from your phones at the prospect of non-survival - it's become so hyperbolic that nobody really knows how to get anyone's attention at all". He compares to the claims of gold bugs and about Y2K.

2. Climate activists generate far too much banking work given the time frames and nearer term problems. "We've got the China problem, a housing crisis looming, interest rates climbing, an inflation crisis, and I'm being told time and time again to spend time looking at something that's going to happen twenty or thirty years hence. The proportionality is out of whack".

3. At the moment, markets agree with him more or less. The more often the phrase "climate catastrophe" is mentioned in the press, the more valuable risk-associated assets become.

In other words he feels like bankers have nearer term job related problems to be thinking about like the cost of living crisis, the lockdown induced recessions, and not claims the world is ending which, historically, have proven to be inaccurate as a general class.

If you feel like these views justify firing or suspending people then you're the sort of person he's criticizing.

Edit: Here's a summary of the rest of his arguments.

1. People claiming the world is going to end need to either present arguments for why the market is mispricing everything despite millions of participants, or, why there's going to be a massive boom if climate risk is 'solved'. But currently they don't do that, they're implicitly arguing that the market is seriously mispriced, without actually stating so directly.

2. IPCC figures for actual impact of climate change are surprisingly low, on the order of 5% by 2100. However even if you accept those figures, by 2100 the economy may easily be 1000% larger, so a 5% difference would not be noticeable. Also GDP growth is perhaps over-rated in terms of importance: growth has completely stopped in the recent past and it was OK.

3. People often make misleading claims about extreme weather increasing, without noting that weather related deaths and costs have all been trending downwards significantly. Thus not only dry financial/economic metrics seem impacted in only low ways, but also 'lifestyle' metrics. Humans have been pretty fantastic at adaptation and there's no reason to assume this will change.

4. "I don't doubt the science at all". California's fire budget is only 1% of their state budget, or .1% of their GDP. If economic growth continues as expected, even with more fires, that is solvable through adaption.

5. We spend way too much on mitigation financing and not enough on adaptation financing.

6. There's a difference between volumes and prices (this seems like a technical financial argument), e.g. revenues can fall without profits/prices changing because there's an indirect relationship. There will be winners and losers whose share prices go up and down, during green transitions there's going to be both and it's possible to build portfolios around both. E.g. at the moment coal indexes are outperforming renewables, but it's been different in the past and things will swing back and forth.

7. "Even if climate risk isn't negligible it's too far in the future to matter for most companies". This is again a technical point related to the priorities of bankers. He says company valuations don't really go beyond 20 years. Avg loan length is 6 years. Even if you assume the "Sharons and the Mark Carneys" of the world are totally right about everything and the world ends in fire and destruction in 30 years (not sure who Sharon is but seems to be a prior presenter), then from the perspective of a banker it doesn't matter because it's still too far in the future to actually be important for day to day financial activities.

8. He criticizes central banks for spending far too much time on climate risk instead of things they're meant to be thinking about like inflation and asset prices.

9. One climate risk that markets may not be pricing is the possibility of a giant unexpected carbon tax. Many claims by central banks about climate risk being high, are in reality when you check the fine print of the models, actually modelling implausible economic growth dynamics and massive interest rate shocks, which they then present as "climate risk" to make headlines. This isn't reported and he feels central banks are manipulating models in order to make headlines.

10. If we'd tried to model climate risk in the 1920s with today's knowledge of climate science, they'd have got it totally wrong as they'd never have predicted deindustrialization, the impact of greener technology etc.

11. Conclusion, summary of argument: humans are extremely good at managing change. We need to be less doom-mongering and re-focus / re-gain perspective on what investment bankers should be focused on. We need to not be caught out by opportunities like Tesla, and there's lots of investment opportunities in the green transition.

Overall his talk is not even debating or doubting climatological sciences or predictions at any point. It is mostly about what bankers should be doing with their time.

I don't think he would've been suspended if he would've just critized climate change alarmism.

But when he dismisses the risk altogether by saying that Miami will cope with it? That's simply a deliberate misrepresentation of the facts and you're not allowed to do that when talking to investors.

> by saying that Miami will cope with it? That's simply a deliberate misrepresentation of the facts

Are you suggesting that Miami can not cope with the pending climate crisis that will see it cease to exist and be underwater by 2025 [1]

I am willing to wager that Miami will continue to exist on 1st January 2026.

[1] https://miami.cbslocal.com/2015/10/14/predictions-put-south-...

I am not suggesting that, 2025 was never mentioned. The question posed by the HSBC exec is about whether Miami will still exist 100 years into the future. In the case of unmitigated climate change that seems unlikely.

You and lots of commentators seem to miss the important point that when Miami is 6 meters under water half of the 7.7 billion persons in the planet have to move from where they live. New York and San Francisco will be mostly gone.

But hey, who cares right? We always will have Paris and the The Hamptons...

Who is predicting 6 meters of sea level rise?

And a lot of San Francisco is elevated above 30 ft above sea level.

You seem to be one of those people he’s talking about.

I must have been completely distracted by all these Climate Change challenges. Fortunately we have HSBC (!!) and its head of responsible investing, from all people, to bring us back to Earth...Who would have though... \s

"Climate Change ‘Biggest Threat Modern Humans Have Ever Faced’"

https://www.un.org/press/en/2021/sc14445.doc.htm

The ontological fallacy of expecting a light at the end of the tunnel, well, that's what the banker sells, same as a shrink.

See, the banker, he encourages your capacity for illusion. Then he tells you it's a fucking virtue.

Always a buck to be had doing that, and it's such a desperate sense of entitlement, isn't it?

I haven't missed any points, I've simply written what he is arguing. He is arguing that New York will not, in fact, be gone in 30 years, because it will have adapted just like Miami and Amsterdam. So too will other places.

Regardless, the premises of both your and his argument are weak. The idea that Miami will be six meters underwater in 30 years is not based on actual observations about sea level rises (which are utterly tiny and very stable), but are based on computational models that are programmed to assume massive and very fast feedback loops that end with the poles melting all at once.

We all learned a lot about how much academia cares about model reliability during COVID (they don't care, at all). Although the HSBC exec doesn't directly challenge climate models (only central bank risk models and the priorities assigned to them), models of all kinds have long histories of being wrong. Climatologists tend to respond to this by actually editing the historical record to make it appear as if they were correct retroactively, which is completely unscientific. This sort of behavior might be why the markets don't seem to acknowledge climate risk existing, which is a part of the guy's point.

Can you point to the "Climatologists tend to respond to this by actually editing the historical record" ?

Do you mean this is not factual:

https://climate.nasa.gov/news/2943/study-confirms-climate-mo...

EDIT: this paper and twitter thread is even better https://twitter.com/hausfath/status/1202271427807678464

Climatologists like to claim their models are or were accurate, but such claims have no real meaning because they change the temperature databases to make them right retroactively. It's hard to believe I know, I struggled to accept this at first, but they do it and they do it aggressively. It seems to have started around the year 2000 but the practice might date to earlier.

To wit: what they label as "observations" are not actually thermometer readings as they may at first appear, but rather data points after a complicated adjustment process. The averaging process then adds many more sources of modeled adjustment, so they keep changing the methodologies of both the individual weather station readings and also the composite averages post-hoc. About half of all warming visible in the (current) temperature record for the 20th century actually derives from administrative adjustments made after 2008.

You therefore cannot actually say how hot a particular year was, as far as climatologists are concerned. The past is not fixed. To make a claim about how hot it was in city X on date Y you must also reference dataset version Z.

This has a lot of strange effects. For example we often read about record setting temperatures. These records can be "unbroken" [1]:

"NOAA noted in a Friday press release that the previous record was set in July 2016, and tied in 2019 and 2020. But as Bill Frezza, a sharp-eyed reader of Retraction Watch noticed, the agency’s website tells a different story. This press release, dated Aug. 15, 2019, and still live on noaa.gov, proclaims July 2019 to be the hottest month on record for the planet."

Temperature datasets are like software (actually they are software). Some do occasional releases that make big changes. Others are actually continuously 'deployed'. As they explain:

"NOAAGlobalTempv5 is a reconstructed dataset, meaning that the entire period of record is recalculated each month with new data. Based on those new calculations, the new historical data can bring about updates to previously reported values."

For many years climatologists debated the nature and causes of the "pause" in global warming that started around the turn of the millennium. Many papers were published on this e.g. by the UK Met Office [2], many newspaper articles were written [3] etc. Temperatures had stopped going up and nobody knew why. No problem. The pause and all the many barrels of ink spilled on it, was simply written out of history. It was all just a big data mistake, they concluded.[4] Actually the pause never happened at all, and they proceeded to edit it out of the temperature databases.

They started removing the pause around 2015. By their own telling they can't even accurately measure trends in temperatures in past 20 years, but, for sure, they know what will happen in 80 years. It's not rational to treat a community that behaves in such a way as if they cannot make mistakes. They have repeatedly done so in the past, by their own admission!

[1] https://retractionwatch.com/2021/08/16/will-the-real-hottest...

[2] https://www.metoffice.gov.uk/binaries/content/assets/metoffi...

[3] https://www.bbc.com/news/science-environment-24173504

[4] https://nature.com/articles/nature.2015.17700

Oh, that's what you meant. I don't really see the problem with that, [1] explains that the biggest bias that needs to be corrected is change of time of measurement. The actual measurements are just one of the inputs of a model (that can also produce temperature estimates for the places where the measurements took place at e.g. 12:00). I thought someone was rewriting the observations!

[1] https://arstechnica.com/science/2016/01/thorough-not-thoroug...

TOB is one of many justifications for making changes, and only applies in the first decades of the 20th century, yet they also have been adjusting temperatures recorded last year. And yes, they are rewriting the observations. The raw data sometimes isn't even available to the public, so the adjusted temperatures are what we get. It's those adjusted temperatures that get input into the models (that predict the future).

Regardless, there is a serious problem here. It doesn't actually matter if you agree with the rationales for editing the data or not - even if you are 100% on side climatology, the fact remains that they have radically changed their opinions about how the climate was changing in the past, and have done so multiple times (the long period of cooling that triggered the global cooling claims in the 60s and 70s is now no longer visible in the historical data either).

The existence of these changes are simply documented facts. By implication, despite studying climate for many decades they still don't have the ability to accurately measure current temperatures. Again this is not really controversial or up for debate, it's their own telling of the situation. To predict the future you have to be able to at least accurately measure the present.

Apart from being quite callous, the further problem with his thinking is raising sea levels when the soil is clay is very problematic but possible to build walls to keep the water out. However when the soil is a porous swamp like in Miami there is literally no way to build dykes if the water flows upwards through the earth.

It was not callous. It was an humorous way to illustrate his point (which was neither about Miami nor Amsterdam specifically) by using a claim that has been widely circulated (i.e. that Miami will be lost to rising sea levels).

One person's joke is another persons insult I guess. I am certainly not agreeing with the idea of someone being sacked for this, that's clearly insane.

Nobody cares that Miami was mentioned. The quote is taken out of context for sensationalist purposes and while people argue on that they don't discuss the real points and content of his speech in typical bikeshedding fashion.

For instance, one key claim he made is that models by central banks on negative impacts of climate change on economy are using unrealistically negative hypotheses. That's what people should be discussing but of course most people, me included, lack the expertise to meaningfully do it.

Amsterdam also sits on porous (in theory) sand. Compacted sand lets only little water through though and that is pumped out. Bigger problem with his argument is that Amsterdam is lot more like London or Philadelphia than Miami - it's not really at the sea. There was an inlet Zuiderzee that was dammed, just like river Thames or Delaware river could be (expensive but probably doable). Miami is surrounded by sea

> when the soil is clay is very problematic

There's quite a few countries that converted marshes in actual land.

Wikipedia gives the altitude of Amsterdam as "−2 m". I'm not sure what that means, exactly. Is it a typical road surface that's at two metres below mean sea level? Can anyone explain where mean sea level is in a typical Amsterdam street scene like this one (https://commons.wikimedia.org/wiki/File:Red-light_district_o...)?

See the Casino City on the Right? The sea level is lapping at that sign.

Well then clearly Amsterdam is unimportant to him, because by the time Miami is six metres under water not even the Dutch can save Amsterdam anymore.

Besides, rising sea levels is just one of effects of climate change. Saying it's okay to do nothing because Miami may be able to cope with the rising sea levels is completely unreasonable.

Either this person is deliberately misrepresenting the consequences of climate change to investors or he's incompetent. Either way that's rightful grounds to suspend him.

Isn’t New Orleans 3-4 m below sea level in some parts?

Do we expect sea levels to rise 1-2m?

> because by the time Miami is six metres under water

It won't happen suddenly in one day.

Yeah we are “just” going to build flood defenses for every single major city in the world just like Amsterdam. Easy peasy.

> flood defenses for every single major city in the world just like Amsterdam.

For your information sea levels won't go up everywhere around the world in the same way.

Was the issue his dismissiveness of Miami specifically, or his broader fatalist approach to environmental catastrophe — his ignore-Cassandra-like attitude?

That’s equally unreasonable. Is HSBC investing in climate resilience? Obviously not. He’s just making a nonsense excuse. He doesn’t care about Miami or technical solutions, he’s just a selfish man

I can’t wait to hear what he thinks of the 90% of people who will be affected by climate change not living in developed first world countries.

Probably still “Who cares?”

This looks a bit like "financial autism" to me. The thing is the guy is right in a very strict sense - assuming risk premia typically associated with real estate it almost doesn't matter what happens in 100 years. There was even some research proving that the impact of future floodings is indeed correctly priced into the real estate market in the US. You can do that by connecting risk premia, prices, elevations over sea and climate change models.

And I am calling it "autism" because so obviously you cannot say that to the general public, which will not care about your academic calculations :)

It seems he was giving a presentation to investors who will most likely focus on the financial aspects, just like him. So to me, it seems the main issue is that his talk is being discussed out of context by the mainstream press, who were never the intended target audience.

General question to the audience here.

If this poster here had just said “financially retarded” that would be unacceptable, right? So in that same vein then, saying someone is performing an autistic act is generally insensitive and unacceptable, right?

I think it's a bit different because I'm sure the number of autistic people on this site vastly outnumber the amount of people anyone would call retarded.

Therefore it's a bit of a self deprecating humor embedded in the GP comment. Reminiscent of WSB calling themselves apes and retards.

it would be acceptable to describe situations in the market as 'schizophrenic' or 'bipolar' or 'crippling' so as an autist, i don't see this usage as particularly offensive.

There is a pretty significant distinction between "retarded" and "autistic", in that the former (as commonly used) is pretty much purely derogative, but the latter here clearly means something like "technically correct but not suitably communicated" - a much more nuanced attribute.

Yes, we could probably get by without using medical conditions to illustrate points we make. But that doesn't mean every such use is damaging.

If you look at his presentation, it's far from academic.

It's clear that he has been sucked into "opinionated emoting and complaining attitude. He forgot that he is not a Youtuber. He is presenting his company, not his personality.

He could have explained his arguments factually and accurately without any complaints. It the attitude part that gets you fired.

The proof of the pudding, is the excellence in financial risk management demonstrated so far by his organization \s...: https://www.corp-research.org/HSBC

This is probably the least offensive thing this particular bank has done. Leaks suggested it is basically a criminal organization in the heart of Britain and operating internationally.

> head of responsible investing

I cannot imagine the inside jokes for that position.

As a Netflix series would be toned down as too outrageous :-)

"History of HSBC controversies": https://en.wikipedia.org/wiki/HSBC#Controversies

He did not say anything irresponsible, quite the opposite. I suggest you watch his speech, which was actually very interesting.

His quote about Miami is truncated in order to completely misrepresent it. As another commenter mentions, he actually said ""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. We will cope with it."

Remember that this was a speech on climate risk aimed at investment bankers. He did not deny or dismiss climate change, but expressed his opinion that the risk (mainly to the economy and financial markets) is much lower than usually claimed.

> his opinion that the risk is much lower than usually claimed

Like the storied automotive industry bean-counter that decides the lawsuits from fatalities will be cheaper than spending money on a more expensive part that is without some particular flaw.

Otherwise I am not sure why the CEO of his company suspended him.

And how do you cope with the numerous species which will die, the coral reefs which are largely already dead, and the scorching heat waves causing a feedback loop to spin temperatures even higher?

There's not one thing, and it's not easy to predict actually what will happen with this epic experiment.

Please describe the impact of dead coral reefs.

I mean we cut down most of the trees on the East Coast at one point and the impact was?

(And last I heard it was sunscreen killing them, not global warming).

The coral reefs are not "largely already dead". They are actually in rude health with coverage being quite high lately:

https://www.netzerowatch.com/peter-ridd-record-coral-cover-o...

We probably did not watch the same speech. Spent as head of responsible investing, minutes complaining about the amount of work his team has to do while addressing climate change concerns. Made it worst by providing the example of Y2K and how come the world did not end and the elevators did not stop...

They did not stop because of Y2K mitigation work...

I think that the head of responsible investing at a major bank is fully within his job's description by stating his opinion that climate risk is very low compared to all the other risks to investing and the economy and that he therefore thinks that his team spends too much time on the topic because of the hyperbole surrounding it (his words).

They didn't stop because Y2K was mitigated successfully, which is his overall point if I understood the talk correctly. At the time many people made claims that the world would end - they believed the problem wouldn't be mitigated and planes would fall out of the sky, etc.

Climate change is not just about sea-change, and this exec over-simplifies the issue here too. In addition to sea-change we can expect parts of the world become uninhabitable, there there will be further food scarcity. As a result there will expect displacement and more countries competing for limited resources.

The mass exodus of people already creates political and economic issues which we are already seeing today.

When I read about this exec, I am reminded of this New Yorker cartoon:

https://i0.wp.com/www.derekchristensen.com/wp-content/upload...

There's a cartoon that shows dinosaurs looking at the sky, at an incoming comet. One of them asks "Is it priced in?"

This describes our situation quite well.

the rest: "... Amsterdam has been six metres underwater for ages, and that’s a really nice place. We will cope with it."

I think he's making a pretty decent point, but "who cares" is probably the worst way to start that sentence if you don't want to get fired.

Only a decent point if you don't care about Amsterdam. I would very much appreciate if Amsterdam wasn't under water in 100 years.

It's already below sea level and only mildly damp, I don't imagine it will be under water in 100 years. The point is about human adaptation and ability to find technological solutions, not about whether you care about the specific cities.

Why rely on human ingenuity in 100 years to cope with the effects, when we can use the same inginuity right now to prevent it?

Because maybe we can't! Many scientists think we are already too late to stop fairly major climate change. So the sane solution is surely to do both.

Nothing that the guy was quoted saying in OP says that we shouldn't do anything proactive about climate change.

Can't resist note the comment was made by the head of Responsible Investing :-)

You're probably better off watching the actual speech itself and seeing what you agree/disagree with: https://www.youtube.com/watch?v=bfNamRmje-s

You can start with this gold nugget: https://youtu.be/bfNamRmje-s?t=100

Don't look up

It goes away by the Spring...

Using the S&P500/MSCI World Index in these charts seems very disingenuous - they aren't supporting his argument, they just give off the sense of credibility if you aren't paying attention.

He's going (A) "here's a chart" >> (B) "and this is my argument". But B doesn't follow from A at all, it just creates the impression of being evidence-based.

So basically he argues that climate change is not a financial risk that we need to worry about. Economies will continue to grow, and that adaptation will be key to mitigating the effects of climate change. He also argues that the market is already pricing in climate risk, and that the debate about climate change is distracting from more pressing financial risks.

Wow this is way worse than what I could have imagined, the rhetoric of these people is going from "climate change is false" to "I don't give a shit, I'm rich and I will survive"

Occasionally they are honest...

I hold the same option, apart from that I'm not rich... But I don't really care either...

The fentanyl of blackpills. When there is a Nuremburg for climate disasters, this man will be sitting in the dock.

I think it's best of people just watch his speech because it is highly misrepresented:

https://www.youtube.com/watch?v=bfNamRmje-s

Bear in mind that this was part of a series of speeches on investment climate risk for an audience of investment bankers.

He does not deny climate change at all but takes an optimistic view on our abilities to adapt and states his opinion that risks are much lower than claimed (again that means risks to the economy and markets). Nothing irresponsible not outrageous, just an on-topic, supported, opinion.

I found his speech very interesting.

Stuart Kirk was suspended for the speech he gave. This was not an impromptu speech. I would be surprised if no one in the company reviewed it before it was given.

Either this was a big miscalculation by the company, or HSBC wanted an excuse to fire Mr. Kirk. Either way, it was very tone deaf.

Sadly I think the firing will have a negative impact climate action from society. When this story escapes financial news and into the mainstream media, the narrative will be that woke activists cancel executive for wrong think, and partisan passions will boil over.

The Realpolitik of this is that it was likely some important clients/investors/VIP got too offended by it

(preferably someone that invests in carbon-heavy industries for extra irony)

"We will all be six feet under by then, so who cares?"

I think the wealthy are convinced that in fact they'll be standing on our shoulders, but I digress.

These are the consequences Worldwide when Miami is six meters under water...more or less.

https://coastal.climatecentral.org/map/6/-75.8798/27.975/?th...

I dont want to be that guy - but really is that all?

Did you browse a little bit? Half of Florida is gone. That is a migration of 10 million people just for one US State.

Yes I did - I zoomed out and looked all over the world.

6M is a dramatic increase in sea level I would have expected huge areas of land mass to be gone globally and that source suggests a fraction of a percentage point of land mass lost globally.

This is sadly a common sentiment https://www.theguardian.com/australia-news/2015/sep/11/peter...

The only problem that I have is that this guy was fired and now will for sure go into politcs, whereas his skills and his ability to question everything are needed in Africa , South East Asia etc.

He is right there is plenty of money to be made and developing countries could use Westerners who are sick of this climate paranoia.

Westerners bringing their skills to developing countries + local governemnt which has no qualms about reporting bogus CO2 emissions numbers = the hypergrowth that developing countries deserved for centuries.

You don't need to argue there, risking your job...it's the governemnt policy to under-report CO2.

As the West castrates itself, demographically, financially and energy-wise... finally Africa will rise.

Let's go look at the actual data. Here's the Florida measurement station that has the highest rate of sea level rise that I could find: https://tidesandcurrents.noaa.gov/sltrends/sltrends_station....

> The relative sea level trend is 5.95 millimeters/year with a 95% confidence interval of +/- 0.89 mm/yr based on monthly mean sea level data from 1990 to 2021 which is equivalent to a change of 1.95 feet in 100 years.

The press doesn't like to talk about actual measurements, because doing so destroys their scary stories.

Burn the heretic!

In every age science is threatened by heresy, and heresy is bound up in false doctrine. It is the desire of all heretics to minimize the importance of doctrine. When doctrine is minimized, heresy can exercise itself without restraint.

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