Rather than spending our precious newsletter repeating our anti-ESG argument or defending Kirk we would instead like to focus on his core argument.

The fact of the matter is that there is precious little evidence that financial markets do care about climate risk.

This is.... weird? And perhaps troubling but definitely strange.

Why?

Well the issue is, if climate change is such an existential risk and the consequences are not only so severe but also so obvious and so existential then why do markets shrug?

The clear counter argument is that something like:

Noooo! Financial markets are often short sighted, look at the great financial crisis and they can stay irrationally oblivious to the truth until they are forced to a reckoning and then

Now, it is important to state that this could be true.

But the issue is that in the case of the 2008 Crisis nearly everyone was not just blind to the danger - they were also unaware.

People didn't understand the risks that collaterized debt obligations and subprime mortgages and shadow banking system posed to the US, let alone the global economy. That was what was so terrifying about it all and why, when the end came, the consequences were so severe.

That can hardly be the case for climate change. With the exception of some particularly cynical or callous politicians, everyone knows about climate change. Small children know about climate change - whether they want to or not. Our society is so fixated on the risks that there are mental health conditions related to the existential dread that some people feel over this issue.

Unlike with the US banking system in the early 2000s we now make a big, big show of running "climate stress tests" on banks and spend endless time at conferences tendentiously debating and pretending to care about climate risks.

But as Kirk made clear, the more we talk and talk and talk, the less we actually do. And it is on that point that it is very difficult to disagree. In fact, he cunningly makes the point that the more apocalyptic we talk, the higher prices seem to go.

This is very true. When companies announce an ambitious new climate goal to tremendous applause the financial markets most often do.....nothing.

And the implication of this tranquility is clear: markets might have implicitly (or explicitly) decided that, actually, all this talk is the best signal of less real action and so short term is good even if long term it (may) be disastrous.

In many ways the entire ESG complex has been constructed as a very fancy distraction from actually doing what most sensible people suggest is necessary for grappling with this problem or the tradeoffs involved.

And these tradeoffs will be very real! And possibly very painful. We are getting our first dose right now in the form of finding out the consequences of discouraging further fossil fuel investment means for household budgets in rich and poor countries alike.

And there are better solutions than ESG. Including ones that the markets would be forced to respect, overnight.

As Kirk himself says in his speech: bring in a "whopping big carbon tax" and very quickly markets will take notice and behavior will begin to change.

The disingenuous of ESG isn't just not getting anywhere on the climate either. Far more dangerously is the fact that it is allowing real opponents to mobilize and make equally dangerous arguments.

• And make no mistake, a pushback is brewing and it is precisely the intellectual poverty and pathetic signaling exercise that is giving the anti-ESG movement such momentum.

​The campaign to tar ESG as "woke capitalism" is gaining traction partially because of the weaknesses inherent in ESG, not the lack of virtue in the overarching goal.

People know that intuitively that there is something off. Increasingly they know it explicitly as well because of people like Stuart Kirk.

The danger is that the anti-ESG campaign becomes remotely as successful as ESG has been.

The answer to one foolish extreme is not another foolish extreme. We have to change course and do it quickly or the image of combating climate change will be forever tarred not just politically but morally and socio-economically as well.

You can see it in the Florida Governor's campaign against Disney. You can see it in the pushback from institutional and retail investors against the likes of Blackrock and other passive investors forcing the principles of "stakeholder capitalism" down investors throats and you can see it in the increasing anger at the ballot box in democracies, developed and developing.

And so bravo, Stuart Kirk. You called the bluff of the whole ESG complex while standing on stage of a conference on "Moral Money" in London where you presented in front of the great and the good who are doing too little and saying too much.

But we have to hope it isn't too late. We need a better approach and framework and quickly. Our window for dealing with climate change is closing as is the window for having public trust in efforts to do so. There is a lot of focus on the latter but do not underestimate the latter.

"Time is running out" doesn't just mean what you think it means.

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