The Advertising Standards Authority (ASA) of the United Kingdom determined on Wednesday that HSBC's advertisements showcasing the bank's climate-focused measures were deceptive because they omitted information about the bank's continued financing of emissions-intensive industries and enterprises.
HSBC was ordered to cease displaying the advertising and to provide context regarding its contribution to CO2 and greenhouse gas (GHG) emissions in future marketing communications including environmental claims.
The ruling referred to advertisements displayed at bus stops in London and Bristol in October 2021, in the lead-up to the COP26 climate conference, promoting HSBC's initiatives to provide up to $1 trillion in finance and investment to assist clients in transitioning to net zero and to assist in planting 2 million trees. According to the ASA, the advertising authority received multiple complaints alleging that the ads were deceptive because they omitted HSBC's contribution to CO2 and GHG emissions.
The decision comes at a time when financial institutions and other businesses are increasingly subject to regulatory scrutiny on greenwashing issues. The CEO of Deutsche Bank's investment arm DWS quit earlier this year after police raided the firm's Frankfurt offices as part of an inquiry into suspicions of greenwashing. Following an inquiry by the Netherlands Authority for Consumers and Markets (ACM) into its green claims, fashion giant H&M announced that it would remove sustainability-related labels from its items last month.
Adfree Cities, a group campaigning for "healthier cities free from the demands of corporate outdoor advertising," was one of the organisations that filed complaints. Adfree Cities stated in a social media post that "as of today, banks are on notice regarding greenwashing"
In 2020, HSBC published its climate finance goal, which was to help customers make the transition to a low-carbon economy by providing between $750 billion and $1 trillion in financing and investments by 2030. It also promised to align its financing activities with the goals of the Paris Agreement.
Sustainable investing groups such as ShareAction, which led a campaign urging HSBC, Europe's second-largest funder of fossil fuels, to disclose a strategy to minimize its exposure to fossil fuel assets, scrutinized the bank's climate ambitions. Subsequently, HSBC issued promises, backed by ShareAction, to phase out fossil fuel financing and evaluate clients' transition plans to determine whether to provide financing services. Additionally, the bank has unveiled financed emission reduction objectives for the carbon-intensive Oil & Gas and Power & Utilities industries and a pledge to phase out financing for coal-fired power and thermal coal mining.
According to the ASA, HSBC argued that the advertisements were not deceptive because they referenced specific bank initiatives, such as its goal to provide financing and investment to help its clients transition to net zero and its partnership with the National Trust to plant 2 million trees by 2025. HSBC emphasised that its Climate Strategy aligns with the Science Based Targets Initiative's (SBTi) blueprint for financial institutions to align finance with a net-zero pathway by 2050 and set interim 2030 targets. In addition, HSBC stated that their intention to phase out fossil fuel financing is congruent with recommended strategies such as those of the Glasgow Financial Alliance for Net Zero (GFANZ).
In the ASA's ruling, the regulator stated that despite HSBC's commitments, the ads would lead consumers to believe "that HSBC was making, and intended to make, a positive overall environmental contribution as a company," and that consumers would not anticipate that HSBC "would also be involved in the financing of businesses that made significant contributions to carbon dioxide and other greenhouse gas emissions and would continue to do so for many years." ASA noted that HSBC's sponsored emissions amount to more than 65 million tonnes of CO2 per year for oil and gas alone, and that the bank planned to continue financing thermal coal mining in some capacity for several years.