The sudden exit of top executive Lydie Hudson leaves a fledgling sustainability push in disarray.
Just last month, Lydie Hudson was on stage (pictured below) next to Prince Charles, who presented her with a «seal» for Credit Suisse as part of sustainable markets initiative he backs, while industry luminaries like Bank of America’s Brian Moynihan and Santander boss Ana Botín looked on.
(Image: LinkedIn)
Last week, Hudson was out at the Swiss bank, and a dedicated sustainability push overseen by her shut down after just 17 months. The plan stood apart from many of Credit Suisse’s major banking peers, all of whom talk up sustainability but none have added it to top management.
Barely Up And Running
Its sustainability, research, and investment solutions function united roughly 260 analysts in securities research; and more than 800 economists, products specialists and others in investment solutions and products; and a team for sustainability strategy, advisory, and finance led by former investment banker Marisa Drew (pictured below), according to an investor presentation by Hudson and then-risk chief Lara Warner last December.
The so-called SRI, which Hudson had barely got up and running, will cease to exist from next year. The Swiss bank wanted to lift «sustainable» financing to as much as 300 billion Swiss francs ($325 billion) by 2030.
The Zurich-based bank emphasizes that the sustainability agenda remains a key one, especially at its private bank. Its wealth management merger, as well as the arrival of new chief Francesco De Ferrari, complicates all these plans.
Hallmark Of Bank's Board
«The agenda will remain important, but it will be a lot quieter around this,» a person familiar with the reorganization said. The end of the SRI job Hudson was given last July has the hallmark of Credit Suisse’s board, this person noted.
This view indicates that Iris Bohnet, a Harvard professor who had chaired the sustainability committee, is losing some heft on Credit Suisse's newly-enlarged board under Chairman António Horta-Osório.
For one, Hudson was a close associate of former risk chief Warner, who resigned in April following the double-hit of more than $5 billion in losses on Archegos, shortly after Credit Suisse’s $10.1 billion line of Greensill supply chain funds imploded. Hudson has little to do with either, but removing her may be a signal of removing the last vestiges of a previous regime.
Hudson's «Indelible Mark»
For another, Hudson was a bright spot in CEO Thomas Gottstein’s tenure last year. The Swiss executive praised Hudson, whom he said had left an «indelible mark» on Credit Suisse in her 14 years there.
As for the organization Hudson built up around the so-called SRI (sustainability, research, and investment solutions) function, this is to disappear as quickly as it appeared. This means investment solutions and products into the wealth arm to be run by De Ferrari, while research heads for the investment bank.
The move – which means investment chief Michael Strobaek has direct access to SRI resources – makes far more sense and avoids replication, bank insiders note. It isn’t clear where chief sustainability officer Drew will land (a Credit Suisse spokesman didn't comment).
Where Will Chips Fall?
De Ferrari, who starts in ten days, will decide where some of the chips fall. It will be up to the Italian and Swiss banker, who has advocated for sustainability (and digitization), to decide where the organizational boundaries are.
For example, private banker Emma Crystal was tasked last year with overseeing sustainable client solutions in a large part of Credit Suisse’s European business, after Hudson won the SRI job. Crystal, who also oversees the wealth business itself for the same region, is losing part of her job in the shuffle.
Quietly Fizzling Upon Exit
Credit Suisse doesn’t seem to know yet whether it needs a group head of sustainability as a figurehead and to reconcile all its disparate activities in this area. UBS did so last year, in entrusting Michael Baldinger with a meatier job. The Swiss wealth manager also has Huw van Steenis, a City figure and former Bank of England adviser who is a senior adviser to CEO Ralph Hamers.
Credit Suisse didn’t detail the SRI organization that is being folded into its divisions. Hudson didn’t respond to a request for comment. What began as a bold push by Credit Suisse 17 months ago to force sustainability onto finance’s agenda is quietly fizzling with Hudson’s departure.
