HSBC reacts to greenwashing accusations

HSBC is to stop financing new oil and gas fields, following criticism of its recent investments in this area which appeared to be at odds with its net-zero pledge. 

Why it matters

For campaigners, HSBC’s announcement marks what one called “a new minimum level of ambition” for the banking sector. The pressure is now growing on other financial institutions to follow suit. Earlier this year Lloyds Bank took a similar step, although it’s much smaller and has less exposure to the fossil fuel sector. 

Context

In 2020, HSBC said it would invest and loan up to $1trn in green projects as part of a net-zero pledge. But it was subsequently revealed to have invested as much as $8.7bn in new oil and gas fields during 2021 – a development that led to its sustainability credentials being questioned. 

Nor did it help that the Advertising Standards Authority banned a couple of OOH ads the bank ran ahead of COP 26 for making misleading claims about how it was tackling climate change. 

In making its judgement, the regulator noted that “customers... would not expect that HSBC, in making unqualified claims about its environmentally beneficial work, would also be simultaneously involved in the financing of businesses which made significant contributions to carbon dioxide and other greenhouse gas emissions”. 

At the time, Jake Dubbins and Harriet Kingaby of The Conscious Advertising Network made the point that the ruling meant “greenwashing no longer means isolating a misleading claim, it means placing a claim in the context of the wider business”.

HSBC says 

The bank said it came to its decision after taking advice from international energy experts. But it will continue to keep existing investments in oil and gas fields as it “recognises that fossil fuels, especially natural gas, have a role to play in the transition, even though that role will continue to diminish”.

Sourced from BBC, Reuters, WARC