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The UK Advertising Standards Authority (ASA) has ruled that two UK retail bank adverts which claimed the financial institution’s green credentials were ‘misleading’ and ‘omit important information’. The billboards, which showed how HSBC was planting trees and going to net zero, were displayed at bus stops in Bristol and London in October 2021 just before the COP26 climate change summit. The ASA received 45 complaints, including from campaign group Adfree Cities. The ASA determined that the two advertisements should no longer be used and that HSBC should ensure that future marketing communications making environmental claims were “sufficiently qualified and did not omit material information about its contribution to carbon dioxide emissions. carbon and greenhouse gases”. This is the first example of action by the ASA against a bank for “greenwashing”. Notably, it doesn’t appear that anything depicted in the ads is fake. On the contrary, ASA’s action seems to have been based on the fact that HSBC finances, among many companies and industries, fossil fuel companies.
HSBC responded to the announcement saying “the financial industry has a responsibility to communicate its role in the low carbon transition to raise awareness and engage customers” and that it “will consider how best to do this as we deliver on our net zero commitments goal.”
Taking the temperature: The ASA’s decision is somewhat surprising. Nothing in the advertisement itself was allegedly false. And the fact that HSBC, like its peers, has not gone out of business with the fossil fuel segment of the energy industry is well known. Many participants on all sides of the green transition discussion recognize that the transition to a green economy is not possible without the power provided by coal, oil and gas. HSBC also said it will “phase out” its funding of the fossil fuel industry and will provide further details of the plan by the end of this year. Nevertheless, the ASA’s action is a necessary reminder to participants in the financial services and other sectors that significant regulatory attention is paid to green claims, and that such claims must be based on a solid factual.
(This article originally appeared in “Cadwalader Climate”, a new bi-weekly ESG market newsletter.)
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