The UK’s advertising watchdog has banned a series of HSBC’s advertisements for being misleading about its green credentials by not mentioning the bank’s financing of fossil fuel projects and links to deforestation.
The ruling sets a precedent for the financial sector, marking the first time the regulator has barred ads by a bank on greenwashing grounds.
The Advertising Standards Authority (ASA) said on Wednesday that HSBC could no longer run the series that promoted the lender’s planting of trees and its plans to reach net zero greenhouse gas emissions.
Consumers would not necessarily understand that HSBC, which made “unqualified claims about its environmentally beneficial work”, would be “involved in the financing of businesses which made significant contributions to carbon dioxide and other greenhouse gas emissions”, the ASA said.
It said the ads “omitted material information and were therefore misleading”.
Similar ads for Barclays and Standard Chartered were also reported by campaign group Adfree Cities, which led the HSBC complaint. However, those cases were closed.
In response to the ban, HSBC UK said the financial sector had a “responsibility to communicate its role in the low-carbon transition” and the bank would “consider how best to do this”.
The HSBC action follows a ruling against Tesco in June over ads for its range of foods based on plant protein. That ruling found that the supermarket chain had failed to back up its promotion with “any evidence in relation to the full life cycle of any products in the Plant Chef range”.
Concerns about greenwashing have risen up the agenda for politicians and regulators this year, following a flurry of sustainability pledges, promises and advertisements by companies globally.
In May, German police raided asset manager DWS as part of an investigation into potential greenwashing.
In July, the UK’s Competition and Markets Authority said it had launched investigations into the sustainability claims of three fashion brands, while the Canadian Competition Bureau said in October that it was investigating whether Royal Bank of Canada had misled consumers about its commitment to climate action. Leading Canadian banks, including RBC, more than doubled their financing of the highly polluting extraction of oil from tar sands to $16.8 billion (€17.1 billion) in 2021.
The ASA said any future ads by HSBC that included environmental claims had to be “adequately qualified” and “not omit material information” about its contribution to greenhouse gas emissions.
HSBC provided more than $100 billion in fossil fuel financing between 2016 and 2021, according to the annual report produced by a coalition of campaign groups organised by the Rainforest Action Network.
The bank is among the signatories of the Net-Zero Banking Alliance, one of the subgroups in the Glasgow Financial Alliance for Net Zero (Gfanz) that commits members to decarbonising their portfolios. Gfanz has come under increased scrutiny as some US lenders recently suggested they may quit the group, as members worried about the legal risks involved.
– Copyright The Financial Times Limited 2022
