The latest: The UK Advertising Standards Authority (ASA), has accused HSBCIt has been greenwashed its reputation for environmental consciousness.
More here: Two HSBC ads were placed at bus stops in London and Bristol in October 2021 by the ASA.
- One advertisement stated that the bank would finance clients’ transition to net zero greenhouse gas emissions with $1 trillion.
- The bank also pledged to plant 2 million trees to capture 1.25 million tons carbon in the second ad.
These claims can be misleading and could lead to consumers opening accounts or purchasing other products, according to the ASA warning.
- The bank currently finances businesses that produce up to 35.8 millions tons of carbon dioxide annually.
- The bank also plans on financing thermal coal mining through 2040.
HSBC stated in defense of the ads that it plans to transition towards net-zero emission by 2030.
- To assist customers in their transition, we offer financing from $750 billion up to $1 trillion.
- The process of financing fossil fuels should be halted.
The bigger pictureConsumers and shareholders are increasingly pressing banks to make sustainability a top priority. Three major banks have been accused of greenwashing by HSBCWells Fargo, Bank of America, CitibankDefeatedClimate resolutions were presented at annual shareholder meetings. About 11% to 13% were supportive of the resolutions. These shareholders hope for more support of the resolutions and expect to see even more support next year.
Despite the fact that banks are moving towards net zero-financed emission pledges from banks, many banks have not yet figured out how to balance a shift towards sustainability and sustaining their profitability.
- Some major BanksThey have been vague about their climate goals.
- Bloomberg BanksAre finding fossil fuels more profitable that green debt, earning $16.6 million in fees between 2016 and 2020, as opposed to $7.4 miliarde from the latter.
Why is this important?As the regulatory landscape starts to shape, FIs will need to be more aggressive in this area.
- The Office of the Comptroller of the CurrencyThe US’s OCC is developing climate-related preparedness guidelines.
- The Federal ReserveStress tests that incorporate environmental factors are being developed for banks and credit unions.
- The Green Technical Advisory GroupThe UK has created a framework that allows advertisers to market sustainability credentials for their companies.
- Regulators in the UK are working to finalize a series of environmentally sustainable economic activities through The Sustainable Finance Disclosure Regulation.
- The Investment AssociationUK firms will be warned if they fail to disclose any financing that could have an adverse effect on the environment.
Banks need to be aware of their brand’s reputation with customers. A new generation of Gen Z and millennial investors will be able to access great wealth through a new set if beliefs and causes.
- The ChangeOver in financial assets, 2020-2030 $68 trillionBoomers to millennials and GenZ.
- Kearney’s survey reveals that nearly half of 18- to 24-year-olds are not in their 20s. Double the likelihood Switch to banksBased on their ESG credentials, they are more qualified than those 55 years and older.
- Roughly A third of millennials are unemployedHarris Poll shows that ESG investment tools are more popular than just 2% among baby boomers.