Article by Phil
As we’ve highlighted before there are increasing concerns about the lack of transparency in the global ESG (Environmental, Sustainable, Governance) Inheritance Tax Planning and investments market.
Regardless of the rights or wrongs of ESG badged products the way in which ESG Inheritance Tax Planning and investment credentials are measured is still unclear. Especially since there are now over 3,000 ESG funds in Europe alone. Action to address the issue is painfully slow.
But it seems that the Advertising Standards Agency (ASA) has taken a small but important first step.
It has upheld several complaints (19/10/22) made by the public against a series of adverts run by HSBC in the run up to the COP climate conference in Glasgow last year.
The Bank ran two adverts in particular. One which claimed that they had planted two million trees to unlock 1.25 million tonnes of carbon. The other claiming to have provided over $1 trillion in funding for firms to transition to net zero. The ASA did not find that the adverts weren’t accurate. The issue they were concerned about was the fact that the Bank did not at the same time disclose that they are the world’s 13th biggest funder of fossil fuels. This, the ASA found, amounted to an attempt by HSBC to “greenwash” their credentials.
In other words, trying to appear green when in fact they are not.
As a consequence, HSBC have been told to remove the adverts and not run them again.
It also sends a message to other high-profile firms to consider whether they are engaging in greenwashing. It’s a small step but one in the right direction. Interesting that it is the ASA rather than the FCA who have decided to take action. Although the FCA have now launched a consultation paper to look at ways to improve ESG advertising. Some of the proposed measures include:
- Restrictions on the use of the terms, sustainable, green and ESG. Unless certain criteria are met by the advertising firm.
- Standard disclosures to explain the terms used to consumers.
- Standard labels on products and clear explanations.
ESG Inheritance Tax Planning and investing is still important to the public however, but not as important as the cost-of-living crisis which is now the number one concern according to a survey by SEC Newgate.
In terms of ESG concerns, climate change has now fallen down the list of priorities behind protecting the environment. Almost half of people are still concerned about ESG matters, however. But only 10% claimed to be confident about what it meant and how to measure it.
The most important ESG matters to the public were the prevention of slave labour, corruption and tax evasion.
