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The international bank has received a scolding from the Advertising Standards Authority (ASA) over complaints it is misleading consumers about its environmental, social, and governance (ESG) credentials.

HSBC has been dealt another blow to its green credentials after the UK’s advertising regulator a slew of adverts related to climate change and warned that future campaigns must indicate HSBC’s own role in the climate crisis.

The ASA’s action followed 45 complaints, including from the campaign group Adfree Cities, which challenged whether the advertisements in question were misleading, because they omitted significant information about multinational bank’s contribution to carbon dioxide and greenhouse gas emissions.

The complaints were in regard to posters that appeared on high streets and bus stops in the lead-up to the Cop26 climate change conference in Glasgow last October.

The adverts in question promoted the fact that the bank invested $1tn in climate-friendly initiatives, such as tree-planting and helping clients hit climate targets.

“This is a significant moment in the fight to prevent banks from greenwashing their image. HSBC can no longer ply us with ads pretending they are green while continuing to bankroll climate breakdown in the background,” said Robbie Gillett, director of Adfree Cities, who led the complaint.

HSBC and other banks such as Barclays and Standard Chartered must stop funding fossil fuels instead of attempting to buy public favour with deceptive marketing campaigns, before these reputational risks turn into legal ones, he said.

In its assessment, the ASA states that HSBC’s adverts were misleading to consumers, making “unqualified claims about its environmentally beneficial work” while also being simultaneously involved in the financing of businesses which “made significant contributions to carbon dioxide and other greenhouse gas emissions and would continue to do so for many years into the future.”

For example, in HSBC’s annual report, the institution makes the point again about its ESG investing, but further points out that its current financed emissions – emissions related to the customers it financed – stood at the equivalent of around 65.3m tonnes of carbon dioxide per year for oil and gas alone based on the information available at the time the report had been prepared.

“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 gases,” the ASA said.

Moreover, the watchdog concluded that it did not think consumers would know that was the case.

“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.”

Commenting on the case, Steven Cox of Monocle Solutions was sympathetic to HSBC. “While there are legitimate greenwashing cases in the banking, and wider financial environment, the HSBC case is different.”

“ASA is applying a standard on a company-wide level, where in reality, it cannot be as black and white as that,” he said. “Do I believe HSBC is looking to become greener with the way that they operate? Absolutely. Do I believe that HSBC is still investing in projects or equity that are not considered as green? Absolutely.”

The two are not mutually exclusive, he argued. “As a result, I do not think HSBC was intentionally misleading, they are looking to go green, whether for moral or operational purposes in this case is irrelevant.”

“ASA would need to, in this case, specify how companies can advertise in this space without having to disclose all of the so-called demons in their closet, perhaps a fine print at the bottom would satisfy ASA?”

However, others were not as sympathetic.

"Having understood all of these environmental issues that could possibly hamper our world environment, they have created an imaginary superhero who would save the world from all of these environmental problems, and now their followers expect the brand to be the hero who saves the day," said Somasaravanan Ganesan, founder of marketing consultancy Digivalue.

This is one kind of social acceptance demand, he continued. "Taking advantage of this demand, companies advertise from the position of becoming that superhero."

"Later when ASA comes into play, they find out that the superhero wasn't actually performing his job of saving the world but had been bragging about it. That’s greenwashing," he said.

HSBC has had its fair share of ESG-related bad press this year, particularly after former responsible investing chief, Stuart Kirk, had to resign after suggesting that central bankers and regulators are exaggerating risk from climate change.

Kirk’s presentation said that: “Unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong.”

Later on, he quipped, “who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages and that's a really nice place."

Kirk his resignation as a case of cancel culture in his LinkedIn post following the incident.

ASA Takes Action Against BNPL Firm

As well as taking action against HSBC, the ASA has also adverts from the buy now, pay later (BNPL) firm, Clearpay, due to three Instagram posts that the company published.

The advert in question included a meme showing two images of the character Seong Gi-hun from the TV show Squid Game.

In the first image he was smiling, with text above stating “sticking to my monthly budget”. In the second image he looks stunned with the text saying “ASOS offering 20% off site wide”.

Moreover, the advert in question included the caption, “*turns off push notifications*”, and text at the bottom of the image and in the caption, including the hashtags, referencing Clearpay.

“We considered that consumers would understand the ad as making light of consumers who were unable to exercise self-control over their spending when a sale at a particular retailer was on. We further considered that consumers would understand the scenario depicted in the ad was linked to the use of Clearpay.”

“By making light of not sticking to a monthly budget, we considered the ad encouraged consumers to use a form of credit with delayed payment to pay for non-essential purchases in situations where they did not have the budget to do so.”

As the advert encouraged people to spend more than they could afford, the ASA has concluded that it was socially irresponsible.