Dhe well-known fund manager Chris Hohn wants to increase the pressure on banks to stop granting loans to companies in the oil, gas and coal industries. Hohn, the founder of the hedge fund The Children’s Investment (TCI), made several suggestions in letters to several central banks and financial supervisory authorities. The key is that banks should be forced to provide higher capital requirements for loans for “fossil fuel” projects. This would make it less attractive and more expensive to provide such loans. He is also calling for stricter transparency regulations for carbon-based investments. “Investments in new fossil fuels must stop immediately,” writes Hohn in the letter.
The British billionaire, who made a fortune with aggressive deals, has been a radical climate fighter for some time. He even donated £ 200,000 to the controversial Extinction Rebellion movement, which has caused a stir with roadblocks. Hohn became known in Germany years ago with a campaign against Deutsche Börse. In 2019, TCI was the most profitable hedge fund with a profit of over $ 8 billion, and Hohn paid himself a $ 480 million dividend. Mockery is not just a profit hunter, but donates large sums to projects for children and environmental protection.
His fund manages nearly $ 40 billion, so his word carries weight in the investment industry. Last year, scorn threatened major banks HSBC, Barclays and Standard Chartered with lawsuits if they didn’t stop lending to coal mining companies.
Wrong strategy according to Gates
The former head of the Bank of England, the Canadian Mark Carney, who subsequently became UN commissioner for climate change and finance, has also spoken out with an initiative. The Glasgow Financial Alliance for Net Zero (GFANZ) is calling for financial regulation reforms to achieve the goal of net zero emissions. A number of pension funds like that of the Church of England committed themselves in the spring to restructuring and “divesting” their portfolios so that they are carbon-free by 2050 at the latest.
Not everyone in the City of London shares Mockery’s views. Fund manager Crispin Odey recently said large institutional investors missed “fantastic returns” because they steer clear of oil stocks. Odey’s Europa fund, which has almost doubled in value this year, invests in oil companies.
Microsoft founder and major donor Bill Gates has been critical of the success of the “Divest” movement in the past. Gates said this movement had “zero impact” on emissions and the climate. The idea of ”starving” fossil fuel industries by withdrawing capital does not work. Only initiatives that invest in technical innovations to reduce emissions and adapt to climate change would have a chance of success.