EXCLUSIVE HSBC customers quiz bank on climate, one to review pledge – sources


HONG KONG/LONDON, May 27 (Reuters) – HSBC (HSBA.L) is facing customer demands over its commitment to tackling climate change after a senior banker downplayed the risks, sources told Reuters , with at least one major institutional investor reconsidering whether to employ the bank for a sustainability role, according to one of the people.

The investor, who manages more than $100 billion, plans to seek advice from consultants on whether HSBC Asset Management should help manage its sustainability funds following the controversial comments, the person said. having direct knowledge of the matter.

Bank staff have also sought reassurance on their policies amid concerns about how HSBC will be perceived by customers, two other sources said. The sources declined to be named as they were not authorized to speak to the media. A spokesperson for HSBC declined to comment.

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Earlier this month, Stuart Kirk, global head of responsible investing at HSBC Asset Management, told a conference in London that “climate change is not a financial risk we need to worry about”, comments that prompted the bank to suspend him and conduct an internal investigation. Read more

Kirk declined to comment when contacted by Reuters.

Kirk’s presentation was criticized by activists who pressured the bank and its peers in the financial services industry to play a bigger role in the fight against climate change. Read more

It also prompted The Pensions Regulator in the UK to warn that any pension scheme failing to take into account the impacts of climate change was “ignoring a major risk to pension savings”.

HSBC is one of the main providers of investment services for these plans.

HSBC chief executive Noel Quinn said Kirk’s comments were “inconsistent with HSBC’s strategy and did not reflect the views of senior management”. Nicolas Moreau, who heads the asset management division, also distanced himself from Kirk’s remarks.

HSBC Asset Management has received a number of inquiries from institutional clients regarding Kirk’s comments, one of the sources said.

Some of the institutions said they felt compelled to seek more clarity and understand HSBC’s official position, the source added.

The possibility for HSBC Asset Management, a division that oversees some $640 billion, to lose business comes as the company invests in the unit as part of a wider campaign to boost fee income. Over the past year, HSBC has bought businesses in Singapore and India as it seeks to expand in Asia in particular.

The unease also spread to the bank’s internal meetings. Concerned employees posed questions to senior management at a recent town hall meeting, two of the sources said.

Still, several industry pundits have defended Kirk, saying he sparked legitimate debate and that there should be room for dissenting voices in finance.

The impact of climate risk on portfolios may indeed be exaggerated, as Kirk argued, Tariq Fancy, former head of sustainable investing at BlackRock Inc., told Financial News in an interview on Monday.

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Additional reporting by Simon Jessop in London; Editing by Elisa Martinuzzi and Carmel Crimmins

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