Europe’s Largest Bank Suspected Of Greenwashing
A group of investors worth $2.4 trillion suspect HSBC of greenwashing as it continues to fund coal projects despite pledging to go carbon neutral.
Amundi, Sarasin & Partners and Man Group are just some of the major investors who are dismayed by HSBC’s progress in tacking climate change. They and 15 other institutions have supported a resolution that will force the bank to outline how it will reduce it’s funding of fossil fuel assets.
Individual shareholders, including several prominent millionaires, say they too have been disenchanted with HSBC’s progress. “I was disappointed to learn that HSBC still plays such a prominent role in the financing of the coal industry,” says Gabriel Vogt, a customer of HSBC and one of 117 individual filers of the resolution.
Worse, analysis by ShareAction, an campaign group which organised the resolution, found the bank pumped an additional $1.8 billion into fossil fuel companies in the four months leading up its carbon neutral announcement.
That makes it Europe’s second largest financier of fossil fuels, says the Rainforest Action Network (RAN). And, despite pledging to go carbon neutral in October, it has yet to published a strategy on exactly how it will achieve that.
That invites accusations of greenwashing says Colin Baines, investor engagement manager at Friends Provident Foundation, a charity and another filer of the resolution. Greenwashing is where a company indicates it’s products are more environmentally sound than they actually are.
“Net zero ambitions by top fossil fuel financiers are simply not credible if they fail to be backed up by fossil fuel phase out plans, says Jeanne Martin, a senior campaigner at ShareAction. “The danger lies where these ambitions are very long term and they’re not underpinned by credible transition plans.”
But HSBC does not have to comply with the resolution. Fossil fuels are still big business for banks, particularly those, like HSBC, with business in Asia which is now the largest consumer of coal.
The coal power station in Haimen, China.
AFP via Getty Images
There is also nothing to say a bank cannot be carbon neutral and invest in coal, just so long as it puts money into other areas to compensate. HSBC has said it will provide sustainable financing to customers and has reduced the carbon footprint of it’s own operations.
Greenwashing Europe’s Financial Services
Recent history is encouraging, however. Last year ShareAction organised the first ever climate resolution backed by institutional investors at a major European bank, Barclays. As a result, Barclays became the first mainstream bank to commit to net zero by 2050.
One-by-one, shareholders are calling out companies on their carbon footprints. And it is not just banks: Norway’s sovereign wealth fund has said it will divest of all coal projects, despite making it’s money from oil. Anglo American, a mining company that ironically mines coal, has pledged to be carbon neutral by 2040.
Driving these commitments are conscious investors, who are quick to call out greenwashers amid their portfolio. Why make ethical choices in your lifestyle if your investments counteract them?
“It is frustrating that whilst I try to make sustainable choices in other areas of my life, my bank is enabling such dangerous activity,” says Vogt.
HSBC did not respond to a request to comment before this article was published.
Published at Mon, 11 Jan 2021 00:00:00 +0000