HSBC has been found to have misled consumers about the environmental credentials of its investment activity in a landmark ruling by the UK’s Advertising Standards Authority (ASA). The ruling means that businesses, particularly those in the financial sector, must be careful not to omit information that could be considered material to claims made.

The finding relates to two posters run on bus stops in the cities of London and Bristol in October 2021. Under the heading “Climate change doesn’t do borders” the posters carried claims that the bank was “aiming to provide up to $1 trillion in financing and investment globally to help our clients transition to net zero” and that, in the UK, it was “helping to plant 2 million trees which will lock in 1.25 million tonnes of carbon over their lifetime”.

Significant information

The campaign prompted 45 complaints challenging the claims on the basis that they “omitted significant information about HSBC’s contribution to carbon dioxide and greenhouse gas emissions”. Complainants said HSBC was continuing to finance the expansion plans of major gas and oil companies despite the International Energy Agency’s call to stop all new fossil fuel projects of global warming is to be kept under 1.5C.  

HSBC said its financing of such projects was not in conflict with the aims of net zero transition, and pointed to the IEA’s own modelling that the world would still need fossil fuel production by 2050 even under decarbonization plans. It said it engaged with portfolio companies to reduce emissions, and had its own plan to achieve net zero financed emissions by 2050.

Clear basis

But the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing requires the basis of environmental claims to be clear and says that unqualified claims could mislead “if they omit significant information”.

In its ruling, the ASA said it did not believe “that consumers would understand the intricacies of transitioning to net zero, and would not expect that HSBC, in making unqualified claims about its environmentally-beneficial work, would also be simultaneously 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 into the future.”

Global brands

HSBC is the latest brand to fall foul of an ASA ruling on greenwashing, with ads by Shell, Hyundai and Innocent Drinks among those picked up by the watchdog’s Environment and Climate Change project. Barclays and Standard Chartered are also facing filed complaints about ads that appeared on Facebook this year.

Following the ruling, HSBC issued a statement saying: “The financial sector has a responsibility to communicate its role in the low carbon transition to raise public awareness and engage its customers, so we will consider how best to do this as we deliver our ambitious net zero commitments.”