Industry Updates

ETF Wrap: Kirk leaves parting shot at ‘virtue signalling’ asset management industry

In another big week for ESG, Stuart Kirk again made headlines by announcing his resignation from HSBC Asset Management

Theo Andrew

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Stuart Kirk pulled no punches announcing his resignation as global head of responsible investments at HSBC Asset Management on Thursday, citing “cancel culture” and “virtue signalling” within the asset management industry.

Kirk said the UK giant’s behaviour towards him made his position “unsustainable” following his now infamous presentation at the FT Moral Money event on 19 May, following which he was labelled a “climate denier” and placed on suspension, pending investigation.

But Kirk finally pulled the lynchpin on his position, vowing to “prod with a sharp stick the nonsense, hypocrisy, sloppy logic and group-think inside the mainstream bubble of sustainable finance”.

“If companies believe in diversity and speaking up, they need to walk the talk. A cancel culture destroys wealth and progress,” he said.

There is no place for virtue signalling in finance. Likewise, as a writer, researcher and investor, I know that words or trading shares can only achieve so much. True impact comes from the combination of real-world action and innovative solutions.”

The whole event has seemly done nothing more than to convince Kirk that ESG investing must change.

Announcing his next venture, with no hint of modesty, Kirk said he has formed a “crack team of like-minded individuals” to create the “greatest sustainable investment idea ever created”.

Kirk surely knows how to seize the moment having been the talk of the finance industry over the past couple of months.

While detail was lacking, Kirk did state it would be centred on the underlying central argument in his speech: “that human ingenuity can and will overcome the challenges ahead, while at the same time offering huge investment opportunities”.

Kirk’s resignation wasn’t the only story to thrust the topic of ESG into the headlines this week.

The European Parliament voted to include gas and nuclear in the European Union Taxonomy of sustainable activities in a controversial move.

The issue exposed deep fault lines between countries in how to fight climate change, with the Russian invasion of Ukraine and the subsequent falling of gas supplies weighing heavy on the decision.

The decision paves the way for increased investment into gas and nuclear infrastructure and asset managers will be hoping the ruling increases investment into ETFs such as the Sprott Uranium Miners UCITS ETF (URNM) and the Global X Uranium UCITS ETF (URNU) which both listed earlier this year.

Currently, both ETFs are only classified as Article 6 under the Sustainable Finance and Disclosure Regulation (SFDR) and it is not yet known if this will change following the vote.

European regulators also weighed in on ESG investing, after the European Securities and Markets Authority (ESMA) called for regulation of ESG data providers.

ESMA said it is seeing “growing momentum” among global regulatory bodies to address issues such as the insufficient granularity of data, lack of transparency around methodology and conflicts of interest.

It also noted the market was split between a small number of very large non-EU entities and a large number of significantly smaller entities in the EU, with a large number of these clustered in three member states.

ETF Wrap is a weekly digest of the top stories on ETF Stream

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