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HSBC finds itself in hot water over climate change claims

Published on 22 December 2022

What does the ASA’s recent ruling on two HSBC adverts tell us about its approach to claims of greenwashing?

The question

What does the ASA’s recent ruling on two HSBC adverts tell us about its approach to claims of greenwashing?

The key takeaway

The ASA has ruled that HSBC must withdraw two posters that make claims as to its commitment to combatting climate change, on the grounds that the average consumer would be misled into believing that it intended to make, and was making, a positive environmental contribution overall as an organisation. 

The background

In October 2021, in the run-up to the COP26 conference, HSBC put out two poster campaigns on bus stops in Bristol and London. 

One (Ad 1) stated “Climate change doesn’t do borders. Neither do rising sea levels. That’s why HSBC is aiming to provide up to $1 trillion in financing and investment globally to help our clients transition to net zero”.

The other (Ad 2) stated “Climate changes doesn’t do borders. So in the UK, we’re helping to plant 2 million trees which will lock in 1.25 million tonnes of carbon over their lifetime”.

The ASA received 45 complaints that the posters were misleading on the grounds that they omitted significant information about HSBC’s contribution to greenhouse gas emissions. Some of these complaints were from a pressure group, “Adfree Cities”, whose aim is to remove outdoor corporate advertising from UK cities.

The development

The ASA found that the posters breached the CAP Code, specifically the rules stating that ads should not be misleading and that the basis of environmental claims must be clear. 

The ASA considered that the average consumer would understand Ad 1 to mean that HSBC was committed to a business model that supported its customers with transitioning to net zero, and Ad 2 to mean that it was undertaking an environmentally beneficial activity. It also considered that the average consumer would interpret both ads as meaning that HSBC was making, and intended to make, a positive overall environmental contribution as an organisation.

However, the ASA held that the average consumer would not understand from the ads that HSBC still finances numerous businesses that contribute significant amounts of greenhouse gas emissions, and that it intended to continue to do so in some regions until 2040. By omitting this, the ads painted the bank’s environmental credentials in a falsely positive light. Even though the posters were released in the run up to COP26, which had received widespread media coverage, this would not have sufficiently increased public knowledge of the specifics of the process for moving to net zero such that they would not be misled.

Why is this important?

This ruling represents the first instance of the ASA ordering the withdrawal of advertising in the financial sector on the grounds of greenwashing. It is a sector that is now receiving far more scrutiny in respect of its green claims. The FCA has also recently proposed a package of new measures to tackle greenwashing but further details have yet to be released.

Any practical tips?

What might have seemed to be solely a risk for certain sectors (eg fashion) is now proving to be one that affects every type of public-facing activity, with sector regulators looking to issue their own rules to tackle greenwashing. Every business needs to carefully consider any advertising that may be construed as a green claim and how it fits in with the business’ overall environmental impact. 

This is especially pertinent for businesses operating in the tech sector with the energy impact of large tech companies and data centres coming under increasing scrutiny. Any broad and unqualified statements about environmental credentials in advertising are liable to be used as a basis for a successful complaint to the ASA. 

Winter 2022