There has been a lot of noise in the wealth industry this week, particularly within the sustainability space. Comments made by Stuart Kirk, HSBC Asset Management’s head of responsible investing, have been scrutinised by all sides in huge amounts of depth. Whichever side of the debate individuals fall on, the vast majority have been keen to get their viewpoint across.
The question is: what does this actually achieve?
Polarised debates rarely lead to any party changing their minds. Instead, people tend to become more entrenched in their views and even radicalised in some cases. This can leave those in the middle disillusioned and some will inevitably disengage.
In fact, Invesco highlighted polarisation as one of its key themes for 2022, citing it as one of the biggest global challenges.
Sustainable finance and impact investing is a nuanced issue and we should not pretend it is simple. Polarising the debate gives the impression that it is either ‘good’ or ‘bad’.
This is simply not the case. There are plenty of grey areas within ESG and sustainable investments. Greenwashing is still rife in the industry and there are still plenty of debates about what actually constitutes a sustainable investment.
Many clients may want to split their investments, dedicating a proportion of their portfolio to ESG and the remainder to more traditional investments.
Polarising the debate risks discouraging these individuals. If it becomes an ‘all or nothing’ choice, the is a very real possibility that many will opt for nothing.
Sustainability is an emotive topic. People have strong opinions on the topic and naturally want to share them and encourage others to see their way of thinking.
Healthy debate and conversation should always be encouraged. Social media helps facilitate this conversation and can spread it far beyond a personal network.
This presents an opportunity but also comes with a responsibility. The noise can be loud and confusing for clients and intermediaries alike. We should all think about the purpose of a comment before posting. Is this to add value and help others? Or is it simply self-promotion or indulgence?
It is important to have a consistent message across firms and its employees. That seems to be part of the reason Stuart Kirk’s comments have caused such a stir. HSBC chief executive Noel Quinn denounced the comments himself.
Of course, individuals will have their own opinions and will differ in their views. This is natural and should be encouraged.
But, firms with a strong culture and sense of belonging will still be able to convey a clear message throughout this. Those that can cut above the noise and focus on what is important will likely be successful when it comes to attracting and retaining clients.
