In relation to climate change issues, two recent initiatives on the part of the Deutsche Bank Group give grounds for concern.
(1) In September, the Bank’s ‘Climate Change Advisors’ issued a document entitled Climate Change: Addressing the Major Skeptic Arguments: it was authored by three climate scientists at Columbia University. In an editorial introduction, the Bank’s Global Head of Climate Change Investment Research describes it as “a balanced, detailed and expert assessment of the scientific case for climate change that will help investors navigate these extremely complex issues”.
The document’s claims to accuracy as a navigational guide were promptly put in question by Ross McKitrick, one of the ‘skeptics’ supposedly disposed of within it. McKitrick’s paper, entitled Response to Misinformation from Deutsche Bank, is dated 12 September. It identifies and spells out an array of errors and misrepresentations.
In response, the authors of the document have now put out a new text which supersedes the original. In this new version they have added a three-page Response to McKitrick where they admit to a few ‘mischaracterizations’ and offer amended versions of three sentences that they acknowledge to have been misleading. However, the original wording of these faulty sentences remains unchanged and unfootnoted in an unaltered main text: McKitrick has described this behaviour as ‘unsporting’, while others might characterise it as unprofessional.
In a second piece, dated 8 November, McKitrick has responded to the revised report. In this paper he extends and reinforces his critique. Viewed together, his twin presentations appear as unanswerable. As a guide to investors, or indeed for any other purpose, the document is worthless.
It would be interesting to know whether the Deutsche Bank officials who sponsored and approved this deeply flawed initiative took the precaution of submitting a draft for expert review to persons not already firmly convinced that the ‘skeptics’ have been refuted.
Looking at the list, it would seem that no such person is to be found among the eminent individuals who make up the Deutsche Bank’s Climate Advisory Board: all appear as people who are (to quote a nice phrase from Clive Crook) ‘precommitted to the urgency of the climate cause’. A more representative Board, spanning a wider range of opinions. might have taken more trouble to ensure that any published work issued under its auspices would measure up to professional standards.
(2) In the recent Californian elections, voters were invited to accept or reject Proposition 23, which would have placed strict constraints on the state government’s plans to introduce further curbs on CO2 emissions. A few days before the vote, a Financial Times report noted that:
‘Sixty-eight big investors, managing $415bn in assets, have united to urge Californians to vote against efforts to roll back the state’s carbon legislation … Signatories include … Deutsche Bank Climate Advisers …’
If this report is correct, it would seem that its Climate Advisory Board took a strong position on the Bank’s behalf on a controversial political matter.
As its website confirms, Deutsche Bank is fully is committed to Corporate Social Responsibility. How far its current handling of climate change issues can be judged to be responsible is open to debate.
Professor David Henderson is the Chairman of the GWPF’s Academic Advisory Council. His latest publication on climate change issues has just appeared in the quarterly Newsletter of the Royal Economic Society.