Bond Vigilante Calls Out ‘Dead Fish’ Credit Investors on Climate

Ulf Erlandsson isn’t your typical climate campaigner: He prefers the trading desk to the picket line.

He pushed Amundi SA, Europe's largest asset manager, into divesting bonds in an Indian bank that was financing a coal mine, shamed HSBC Holdings Plc for failing to hold that same bank to account, and pressured a Japanese lender to announce it would stop funding coal power.

Erlandsson sees his particular brand of activism, shaped by almost two decades working in the debt markets, as a new form of bond vigilantism. He now spends his time pushing fixed-income investors and bankers to face up to the risks posed by climate change and their role in underwriting a warmer planet. He wants them to use their financial heft to increase the cost of capital for polluters and pressure companies to reinvent themselves for a low-carbon future.

After setting up a nonprofit last year backed by Rockefeller money, the former credit derivatives strategist at Barclays Plc and bond fund manager has become an outspoken critic of the financial establishment, lambasting companies including his former employer Barclays for failing to do enough to fight global warming.

His unconventional methods involve a combination of public shaming, typically on social media, and back-door diplomacy. Using contacts built up over years of buying and selling bonds, he cajoles and persuades investors or lenders to exit planet-warming positions. And he’s not bashful in enlisting lawyers, other nonprofits or journalists in his campaigns. He knows people see him as a troublemaker.

“I have a low threshold for generating trouble when I see something that I think is wrong,” said Stockholm-based Erlandsson. “There’s a saying here that goes ‘only dead fish flow with the stream.’ I’m definitely not one of the dead fish.”

Late last year, Erlandsson, 45, learned that India’s largest bank, State Bank of India, planned to lend about $650 million to help Adani Enterprises Ltd. fund a controversial coal mine in northern Australia. As an early investor in green bonds — debt raised to fund specific environmentally-friendly projects — Erlandsson recalled that the Indian bank had sold such notes back in 2018. He also knew that one of the most high-profile funds investing in green bonds, Amundi’s Planet Emerging Green One fund, held the bonds.