Financial and advertising regulators are facing calls to launch a probe into greenwashing by the UK’s five biggest high street banks
Financial and advertising watchdogs are being urged to probe into allegations of greenwashing by the UK’s top five high street banks.
The call for an investigation was made to the Financial Conduct Authority (FCA), Competition and Markets Authority (CMA), and the Advertising Standards Authority (ASA) on Friday, coinciding with the introduction of a new anti-greenwashing regulation. The Make My Money Matter campaign, which pushes for eco-friendly pension investments, has requested that the regulators scrutinise the sustainability claims and marketing efforts of Barclays, HSBC, Santander, Natwest, and Lloyds.
This move aligns with the FCA’s latest rule demanding financial firms provide retail investors with “fair, clean and not misleading” details about the environmental objectives of their investment products and services. Make My Money Matter is pressing for an examination into the “mismatch” between the banks’ climate pledges and their actual funding practices.
The campaign highlighted recent studies revealing “significant inconsistencies” in how banks’ statements match up to the Paris Climate Agreement’s aim to cap global warming at 1.5C above pre-industrial levels, versus their investment policies.
Furthermore, the letter urges the authorities to delve into the visibility of banks’ green claims compared to the obscured nature of their non-eco-friendly operations. “We believe that these two points create a situation where major bank brands may be understood by the public to be more sustainable than they are thus representing potential greenwash in the UK banking sector, given that most UK consumers have a relationship with these banks,” the letter stated.
The campaign suggested that wider branding should be included in the greenwashing review as the perception of a bank created by an “unduly positive brand image” could influence whether customers choose its products and services. “If they were aware of the companies, or activity, that the bank finances then they may in fact decide that the bank is not for them,” the campaigners pointed out.
They further proposed that banks should be obliged to publish a list of clients they finance as well as significant loans made. Tony Burdon, chief executive of Make My Money Matter, commented: “Our five largest high street banks all financed companies involved in fossil fuel expansion in 2023, the hottest year on record.”
“But we believe that their climate and sustainability statements create a situation where the public believes them to be more sustainable than they actually are. We look forward to hearing whether the regulators agree and what next steps they may take.”
The FCA’s new anti-greenwashing rule is the first to be implemented from a broader package of FCA measures aimed at combating greenwashing, initially announced in November. Companies have been given a six-month grace period to gear up for the new regulation, which ties in with the CMA and ASA’s ongoing guidance against greenwashing.
An ASA spokesperson confirmed: “We can confirm receipt of the complaint which we will carefully assess to establish whether there are any grounds for further action.”
Meanwhile, an FCA representative stated: “We’ll consider the letter we’ve received carefully and reply in due course.” The PA news agency has reached out to the CMA, Barclays, HSBC, Lloyds, Santander, and NatWest seeking their comments.
