Billionaire Michael Hintze sat in the front row at an invitation-only lecture of the Global Warming Policy Foundation, the main U.K. think tank that’s pushing back against policies to fight climate change.
The London hedge fund manager was listening to former Australian Prime Minister Tony Abbott lament how Western societies had turned global warming into a religion while forgetting their roots in “the scriptures about man created in the image and likeness of god and charged with subduing the earth.” The title of the October 2017 speech: “Daring to Doubt.”
Two years later, Hintze’s $19 billion firm CQS signed up to the world’s largest voluntary set of sustainable investment principles. The firm also pledges to be “aware” of environmental, social and governance factors -- known as ESG -- in its investing decisions and to run its business in a sustainable way. And it’s offering customized ESG portfolios.
“The role and duty of a senior investment officer and portfolio manager is to understand and analyze all sides of any debate,” Hintze, 66, said in an emailed statement. “Successful investing depends on understanding complex issues from multiple perspectives.”
A spokesman for the firm, Michael Rummel, didn’t respond to repeated questions about whether Hintze is a financial supporter of the Global Warming Policy Foundation. Benny Peiser, who co-founded the GWPF with Nigel Lawson, the Chancellor of the Exchequer under Margaret Thatcher, declined to comment on its donors. The Guardian reported in 2012 that Hintze helped fund the group, citing an email exchange it had seen.
‘Red Flag’
Hintze’s move puts a spotlight on the business of sustainable investing, one of the fastest-growing areas in money management. Firms are racing to offer such strategies as climate change and social issues increasingly shape investment decisions, including at the large pension plans and endowments that are key clients of hedge funds.
With trillions of dollars held in sustainable investments, even managers who may be skeptical of the science behind climate change find it hard to ignore the impact of such sums of money on asset prices -- and the business prospects they offer.
“This would be a red flag in my due diligence process,” said Priya Parrish, a managing partner at Chicago-based Impact Engine, which invests in ESG funds. “It would lead me to question their alignment and integrity to ESG objectives.”
At stake is a giant pool of money that’s only getting bigger. While definitions vary, one estimate puts the amount in responsible investments at $30.7 trillion at the start of 2018, an increase of 34% over two years.