HSBC's climate change ads banned by UK ad watchdog for being misleading

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UK's Advertising Standards Authority (ASA) has banned a series of ads by HSBC for being misleading in its green credentials. The bank was also told to ensure that future marketing communications featuring environmental claims were "adequately qualified" and did not leave out material information about its contribution to carbon dioxide and greenhouse gas emissions.

In response, HSBC UK told MARKETING-INTERACTIVE: "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."

The ads appeared in the lead-up to the 2021 United Nations Climate Change Conference (COP26) and two posters were seen on bus stops in Bristol and London last October.

The first poster showcased an aerial image of waves crashing on a shore along with the text: "Climate change doesn’t do borders. Neither do rising sea levels. That’s why HSBC is aiming to provide up to US$1 trillion in financing and investment globally to help our clients transition to net zero."

The other ad showed an image of tree growth rings with text that said: "Climate changes doesn’t do borders. So in the UK, we’re helping to plant two million trees which will lock in 1.25 million tonnes of carbon over their lifetime".

ASA received 45 complaints, including from Adfree Cities, challenging whether both ads were misleading because they left out significant information about HSBC’s contribution to carbon dioxide and greenhouse gas emissions. Adfree Cities is a network of groups across the UK that are concerned about the impacts corporate advertising has on one's health and the environment. The network also raised similar complaints over ads by Barclays and Standard Chartered Bank, which were described to be major fossil fuel financiers.

With regards to HSBC this time, Adfree Cities also highlighted a third ad in its complaint which promoted the bank's action to reduce emissions across its operations with the words: "Our operations will be net zero globally by 2030."

In response, HSBC UK told ASA that its claim about offering financing to clients globally to help them transition to net zero has been around since 2020. In fact, it does intend to meet this goal through financing by 2030. Meanwhile, in the second ad about planting two million trees, HSBC had entered into a four-year partnership with the National Trust, worth about US$4.5 million, to create 2,000 hectares of carbon-rich woodland.

The bank added that the ads had appeared in the lead-up to COP26, which could have impacted how the average consumer understood the claims made. This was due to a period of heightened media and corporate engagement on climate change leading up to, and during, the conference, surrounded by debate about the role of banks in combating climate change.

Hence, HSBC said the ads did not mislead its total environmental impact and invited consumers to find out more about the initiatives through a call to action - “Search HSBC Sustainability”. In fact, consumers who searched for those terms on the Internet would find a link to a page on HSBC’s website where they could access a detailed summary of climate change initiatives which had been and would be, introduced by HSBC. Consumers could further access HSBC’s Climate Strategy on that same website.

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While ASA acknowledged that the media coverage around COP26 would have impacted how the ads were perceived since they were run around the same period, that did not mean that consumers would understand the intricacies of transitioning to net zero.

The UK advertising watchdog added that consumers would not expect the bank to be simultaneously involved in the financing of businesses and would continue to do so for many years into the future, while "making unqualified claims about its environmentally beneficial work".

Also, while HSBC's annual report said that the bank intended to invest US$750 billion and US$1 trillion in helping clients transition to net zero, it also indicated that the emissions related to the customers it financed are equivalent to around 65.3 million tonnes of carbon dioxide per year for oil and gas alone.

ASA understands that figure was likely to be higher once other carbon-intensive industries such as power and utilities, construction, transport, and coal mining had been analysed and included. The watchdog also understood from the annual report that HSBC plans to continue funding thermal coal mining and power production – a type of fuel that emitted high levels of carbon dioxide and other greenhouse gasses – to some degree until 2040.

Hence, ASA concluded that despite the initiatives highlighted in the ads, HSBC was continuing to significantly finance investments in businesses and industries that emitted notable levels of carbon dioxide and other greenhouse gasses.

"We did not consider consumers would know that was the case, and we, therefore, considered it was material information that was likely to affect consumers’ understanding of the ads’ overall message, and so should have been made clear in the ads," the watchdog said.

The ASA has still not published a final ruling over HSBC’s adverts. In the meantime, the regulator is refusing to investigate similar complaints over advertisements by major fossil fuel financiers Barclays and Standard Chartered Bank, since they “are currently formally investigating a different advertiser [HSBC] for similar issues”.

Mercedes-Benz was also previously called out by sustainability review platform Wherefrom for greenwashing in its ads. While no action was taken against Mercedes-Benz by a competition watchdog, the automotive brand distanced itself from the ads, explaining that they are not a global brand campaign. Instead, the images were localised social media content by Mercedes-Benz Mexico for Earth Day in April this year. It also continued to be posted during the first week of May as a follow-up.

Greenwashing is an issue that brands should take note of in their ESG journey. They also need to manage sceptical consumers who believe that brands are focusing on sustainability for commercial reasons. In fact, 59% of APAC respondents share this sentiment, Kantar's latest Sustainability Sector Index 2022 in APAC found. Meanwhile, a high number of Southeast Asian consumers have seen misleading information about companies' sustainable actions - Singapore (81%), Malaysia (85%), and Indonesia (81%).