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June 2022
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ESG policy held hostage by partisan politics

  • Asia
  • Global

Who cares if Miami is six metres underwater in 100 years?” Not Ron DeSantis, some may quip, judging by the Florida governor’s previous attacks on global warming rhetoric. But such comments – this one came from Stuart Kirk, head of responsible investment at HSBC Asset Management – appear especially insensitive and destructive in the light of initiatives like the US Securities and Exchange Commission’s bid to implement its new proposals on climate-related reporting. Kirk may have boasted that HSBC looks no further than the six-year length of its typical loan book, but other fiduciaries, presumably including Florida pension funds, don’t have the luxury of that short-termism.

There have been more than enough warning signs already about the depth and sincerity of the commitment of global companies and investors to fighting climate change and promoting sustainability. With a regulatory initiative under way that some commentators hail as a potential pivotal moment in the struggle against global warming, Kirk’s remarks seem exceptionally poorly timed, as well as in poor taste. 

Unfortunately, they’re also all too representative of a slew of opinion in business and political circles. Climate accountability campaigner Christine Arena reportedly highlighted Kirk’s remarks as similar to feedback she’s received from the oil and gas sector. “These are the values they’ve espoused all along. What’s changed is that now they feel empowered to say the quiet part out loud.”

You have to wonder why – until you look at the tone of political comment on climate change in the US right now. Conservative publications like the New York Post are already running headlines warning of the new liberal campaign to push US companies to “adopt woke agendas”. And Republican representatives appear to be quite ready to curry favour with the culture war fanatics at the expense of traditional ties with big business. Such positions are even being aired in opinion columns in The Hill. 

The push to make ESG policy a matter for legislation enacted through Congress is, alas, likely to fall foul of the stark divisions within the US legislature – and that push in itself indicates one dimension of the problem. The movement within the US to make every issue hostage to partisan divisive politics is as alarming a signal for the future of ESG regulation as it is for every other issue in that country. The principle of letting the science speak is practically a dead letter when so much of the country has abandoned science on reproduction and many other issues. It’s just as well for the planet that many other economies have already stepped ahead.