City A.M. understands that a preliminary, unpublished decision by the advertising regulator rules that a number of HSBC’s climate-focused ads are misleading, and that the watchdog demands that future marketing must not omit significant information about its contribution to rising emissions.
The ASA’s draft recommendations, seen by this paper, focus on two of HSBC’s ads, which make statements about planting trees and transitioning to net zero but fail to mention HSBC’s substantial funding of fossil fuels.
The recommendation still needs to go to the ASA Council to make a final decision, and could still be overturned.
If the recommendation is upheld, it would be the first time the regulator has ruled against a bank for misrepresenting its green credentials, reflecting public concern over greenwashing and growing attention towards the role of banks funding fossil fuels that cause the climate crisis.
The regulator deems that consumers seeing these ads, which coincided with the COP26 climate conference last Autumn, would expect HSBC to be making “a positive overall environmental contribution as a company.”
They would not expect HSBC to be simultaneously involved in financing fossil fuel businesses whose activities conflict with the aims of a transition to net zero, says the regulator.
Last year, HSBC funded fossil fuels to the tune of £14.3bn, making it the world’s 13th largest funder of the sector, according to Rainforest Action Network.
The ASA’s assessment states that HSBC’s current plans to phase out financing for polluting industries like coal was slow in the context of international net zero targets, and would be seen by customers to be “an excessive period of time before meaningful action was taken which would delay reductions in greenhouse gas emissions”.
A spokesperson for the ASA told City A.M. this morning: “The ASA do not comment on ongoing investigations. We will publish our findings in due course.”
A spokesperson for HSBC said: “We have an ambitious plan to support a global transition to net zero and are acting now to reduce our financed emissions. This includes a $750bn-$1tn by 2030 financing ambition to help our customers transition, and also an explicit commitment to a 1.5°C- aligned phase down of fossil fuel financing.”
Discussing the matter with Kate Gee, counsel at commercial disputes law firm Signature Litigation, she told City A.M. that “greenwashing does more harm than good. In reality, when companies exaggerate or greenwash their social or environmental responsibility, they actively slow progress towards global climate change.
Gee added: “Greenwashing adverts confuse customers and mask the true impact of a company on the planet. “
“The misleading HSBC adverts gave the appearance of the bank as part of the solution to the climate change problem, rather than – as one of the world’s biggest financiers of fossil fuels – part of the problem itself,” she continued.
Gee called it “encouraging to see the ASA calling out this behaviour and I expect this scrutiny to continue.”
Meanwhile, Emilie Rowe, Head of Financial Services and ESG lead at Aspectus Group, pointed out that “the most important thing organisations can do is measure and improve their ESG performance.
“The next most important thing they can do is communicate clearly and honestly about that performance and their future plans,” she told City A.M. this morning.
“ What these greenwashing accusations towards HSBC by the ASA demonstrate is that your messaging and communications has to be sincere and not stray into the territory of overclaiming.”
“In my experience, this is more likely to be a case of overenthusiasm than subterfuge – however it lays bare the significance of a clearly thought out communications strategy around ESG,” Rowe concluded.