U.K. advertising watchdog, the Advertising Standards Authority, is in the midst of deciding whether or not to caution HSBC over “misleading” adverts. The campaigns in question allude to climate action by the major financial institution while omitting key data about its own emissions. If an official warning is issued, it will be the first time a major bank has been called out for incomplete environmental claims.
At the centre of the ASA’s concern are two bus stop posters, showcased in Bristol and London in October last year. Both received complaints about misinformation. A draft regarding the ASA’s decision has been seen by Financial News and confirms that HSBC could be instructed to not withhold “significant information about its contribution to carbon dioxide and greenhouse gas emissions”.
Why greenwashing is a huge problem
The term “greenwashing” covers a plethora of activities that all share one common goal: making an individual or organisation appear more environmentally motivated than they are in practice. The fashion industry has come under intense scrutiny in recent years, owing to the enormous greenhouse gas emissions contribution that it makes. Now, wider institutions and markets are being highlighted as serial perpetrators as well.
A recent study has revealed that 68 percent of U.S. CEOs know that the companies they lead are guilty of greenwashing. A further 66 percent pondered the authenticity of organisation-wide sustainability efforts.
As new apps, social platforms and media publishing spreads the message about greenwashing and how to spot it, brands are finding themselves being usurped by genuinely sustainable alternatives.
HSBC is by far not the only bank customers can choose from and the ASA has a history of following through with its threats. Both BMW and Shell have had adverts reviewed and banned for being misleading.
The adverts causing consternation
The first HSBC coming under scrutiny reads: “Climate change doesn’t do borders. Neither do rising sea levels. That’s why HSBC is aiming to provide up to $1tn in financing and investment globally to help our clients transition to net zero.”
The second follows the same tack, stating: “Climate change doesn’t do borders. So in the UK, we’re helping to plant 2 million trees, which will lock in 1.25 million tonnes of carbon over their lifetime.”
Concerns have been raised about greenwashing by omission owing to the fact that HSBC continues to invest massively in fossil fuels. Adblock Bristol made a complaint drawing attention to this issue, highlighting that HSBC directly funds “the leading cause of climate breakdown”.
Initial conclusions from the ASA state that how environmentally astute and active companies are represents a significant interest to the average consumer. With this in mind, claims of climate action could be deemed as swaying customers to work with HSBC by opening bank accounts or taking out loans. If the pretences are false, the public will have been misled.
“We considered that consumers would not expect that HSBC, in making unqualified claims about its environmentally beneficial work, would also be simultaneously involved in the financing of businesses which made significant contributions to carbon dioxide and other greenhouse gas emissions, and therefore directly conflicted with the aims of a transition to net zero,” the report states.
Particularly noted was that HSBC revealed through its annual report that it intends to keep funding coal mining until at least 2040. If the bank intends to phase out financing after that, the ASA has deemed the move as slower than it needs to be.
HSBC argues its case
HSBC commented that its advertising claims should be taken in an isolated context and that consumers would not regard them as a wider declaration of green credentials. During the COP26 summit, held in November last year, HSBC was one of multiple banks, investors, and insurers to commit to cutting emissions. The move was part of the United Nations’ Glasgow Financial Alliance for Net Zero and likely a reaction to shareholder requests.
In January last year, HSBC was faced with a shareholder vote to reduce fossil fuel interests. At the time, it was one of the biggest financiers of the sector globally. Previously, the bank had pledged to commit to numerous climate-saving initiatives, while never promising to stop funding coal.
Lead photo by Kit Suman at Unsplash.