HSBC advertising banned for misleading consumers about green credentials

The UK advertising regulator has banned a number of ads from HSBC for being misleading in relation to their green credentials by failing to mention the bank’s funding of fossil fuel projects and links to deforestation.

The ruling sets a precedent for the financial sector and marks the first time the regulator has blocked a bank’s ads on greenwashing grounds.

The Advertising Standards Authority said on Wednesday that HSBC could no longer run the series promoting the lender’s tree-planting and plans to achieve net-zero greenhouse gas emissions.

Consumers would not necessarily understand that HSBC, which “made unqualified claims about its environmentally friendly work,” “would be involved in financing companies that made significant contributions to carbon dioxide and other greenhouse gas emissions,” the ASA said.

It concluded that the ads “omitted essential information and were therefore misleading”.

Similar ads for Barclays and Standard Chartered were also reported by the campaign group Adfree Cities, which led the HSBC complaint. However, these cases have been closed.

In response to the ban, HSBC UK said the financial sector has a “responsibility to communicate its role in the transition to a low-carbon economy” and the bank will “consider how best to do this”.

The HSBC lawsuit follows a judgment against Tesco in June over advertising its plant-based food range. This revealed that the supermarket chain had not backed its advertising with “any evidence regarding the full life cycle of products in the Plant Chef range”.

Concerns about greenwashing have risen on the agenda of politicians and regulators this year after a flurry of sustainability promises, promises and publicity from companies worldwide.

In May, German police raided asset manager DWS as part of an investigation into possible greenwashing.

In July, Britain’s Competition and Markets Authority announced it was launching investigations into the sustainability claims of three fashion brands, while in October the Canadian Competition Bureau said it was investigating whether the Royal Bank of Canada was misleading consumers about its commitment to climate protection have. Leading Canadian banks, including RBC, have more than doubled their funding for highly polluting tar sands oil production to $16.8 billion in 2021.

The ASA said any future advertisements by HSBC containing environmental claims must be “appropriately qualified” and “omit no material information” about their contribution to greenhouse gas emissions.

HSBC provided more than $100 billion Financing fossil fuels between 2016 and 2021, according to the annual report of a coalition of campaign groups organized by the Rainforest Action Network.

The bank is a signatory to the Net Zero Banking Alliance, one of the subgroups of the Global Financial Alliance for Net Zero, committed to decarbonizing its portfolios. Gfanz has come under increased scrutiny since some US lenders recently suggested leaving the group amid concerns about the legal risks involved.

Hortense Bioy, global director of sustainability research at Morningstar, said Gfanz is going through an “existential crisis” and members “feel governments aren’t doing enough.”

The promise of the Net Zero Banking Alliance conditions that lenders “make this commitment with the expectation that governments will honor their own commitments to ensure that the goals of the Paris Agreement are met [on climate targets] are fulfilled”.

Andrew Terry, a partner at law firm Harbottle & Lewis, said the ASA ruling is “one of the first decisions to examine marketing in the financial sector in detail and highlights the challenges we face in getting those decisions right.” .

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