Kyle BassPhotographer: David Paul Morris/Bloomberg
LONDON: One of the most contentious investing strategies on Wall Street might be a lot less beleaguered right now if its defenders had shown a bit more moderation from the get-go, says Kyle Bass.
The hedge fund veteran and founder of Hayman Capital Management said the backlash that’s been building against environmental, social and governance (ESG) investing in recent years is largely due to climate activists’ demands that fossil fuels be abandoned here and now.
As a proposition, that was never tenable or even responsible, he said.
“There were all of these idiots that were just saying, if anyone is doing hydrocarbons, we’re going to blackball them from doing business or from receiving capital,” Bass said in an interview.
“And so Texas lashed back and said, if you’re going to blackball someone that’s producing hydrocarbons, we’re not going to do business with you either.”
It’s a line of argument that gets to the heart of an increasingly entrenched standoff between much of Wall Street and the climate movement. A recent case in point is the months-long campaign outside the Manhattan headquarters of Citigroup Inc, which has seen tense encounters between bankers and protesters.
Protest organisers have galvanised enthusiasm using slogans like “Hot People Hate Wall Street” and “Eat the Rich.” So far, dialogue has been limited and neither side has made any concessions of note.
Bass, who has spoken up in favour of agendas on various sides of the US political debate spanning tariffs on China to abortion rights, is the latest in a list of increasingly vocal financial professionals to characterise such climate activism as naive.
Others to have made similar points include KKR & Co co-founder Henry Kravis, as well as the chief executives of JPMorgan Chase & Co and Goldman Sachs Group Inc, Jamie Dimon and David Solomon. —Bloomberg
