'I asked my employer, BrewDog, to bank on a better future and leave HSBC. Here's why.'
After the recent backlash against Brewdog's toxic culture by 100 ex-employees, we speak to one who felt similarly confused by their climate claims.
Earlier this year, I wrote to my carbon negative employer - BrewDog - expressing my concern about their choice of banking partner.
As an employee at a company claiming to be consistently reducing their carbon footprint (see how here), I felt it was necessary to question why they choose to bank with HSBC - an organisation profiting from fossil fuel projects at the expense of the health and existence of our natural world.
Here’s a snippet of my submission:
“According to the Rainforest Action Network, HSBC are second to Barclays as the largest financiers of fossil fuels in Europe. Between 2015 and 2019 alone, they poured £67 billion into fossil fuels (EDIE).
Despite their commitment to be net zero by 2050 in 2017, HSBC continues to back global fossil fuel projects (notably coal) that increase atmospheric carbon dioxide levels. Even in the run up to their climate commitment announcement, at least four deals were completed with companies involved in the construction of fossil fuel infrastructure including coal, tar sands and gas (analysis by ShareAction). In its mission statement, HSBC said it ‘aims to lead the transition to a sustainable future by aligning our financed emissions to net zero by 2050 and own operations to net zero by 2030’. However, this statement lacks clarity and credibility. There is no specific reference to a transitional timeline in which their support for companies with coal, and oil and gas extraction will decrease (ShareAction).”
Since the submission of my letter, HSBC have thankfully re-evaluated their priorities: they announced in March that they would stop financing international fossil fuel projects by 2040 (2030 in OECD countries). Furthermore, they promised to publish a new coal policy and their strategy for climate change by the end of 2021 [Bank On Our Future]. Although these steps are significant, there are still questions to be asked about HSBC’s execution of their commitment. Bank On Our Future have already brought some questions to light in a recent article:
“Will HSBC immediately cease providing new finance to coal companies that are actually expanding their coal businesses, or will it still create new agreements ahead of the deadlines?”
“Will HSBC exclude companies at any point on the coal supply chain, not just power plants or mining?”
However, why partner with a bank that is only now - after significant pressure and years of scientific evidence criticising their impact - mobilising a conservative action plan to mitigate their contribution to climate change? Their commitment and effort remains insufficient for what is required to curb rising global temperatures and carbon dioxide levels. Worryingly, their commitment might be void before the end of the decade according to new analysis which suggests that industrialized countries must have met net zero before 2030, 10 years before HSBC’s target. Coming up short? We think so. Change needs to come now and, unfortunately, simply meeting targets is no longer enough.
Many businesses are striving for carbon neutrality or Net Zero, yet are choosing to bank with large financial institutions like HSBC, Barclays and RBS. In doing so, any money that business makes, which is stored in the bank, can be invested on your behalf in destructive projects which directly contradict and damage any carbon negative or emissions reducing initiatives that may be in place.
Many fashion brands in particular are creating financing arrangements which directly reward ESG performance. For example, Joules recently announced a financing arrangement with Barclays which rewards their ESG performance. Whilst incentives are needed, what your company’s money does when it isn’t paid in dividends, salaries, bonuses (or other company costs) is equally as important.
So, what can be done?
Change can start with you. If you work for a company, with or without public climate commitments in place, we ask you to check in with who your company is banking with and critically evaluate the environmental and social implications of their financial projects.
In 2015, as part of their ‘Keep it in the ground’ campaign, the Guardian published steps and information encouraging readers to put pressure on their fund managers to decarbonise their investment portfolio. It gave readers the tools to create meaningful change on a personal level.
This past year alone has seen a similar shift in focus towards the social and environmental impact of our pensions, with the National Employment Savings Trust (NEST) - the UK’s largest pension fund with 9 million members - announcing it would be divesting from fossil fuels, and shifting £5.5 billion into “climate aware strategies”. If the same attention could be applied to who the brands we love bank with, similar impact can be achieved. Customers and employees should rightfully expect climate strategies to be adopted at the core of the business. Companies should avoid the business risk of greenwashing by complying with this.
In my letter, I put forward several banking partner suggestions but highlighted one in particular: Triodos.
“From my research, Triodos are the most ethically conscious bank with over 35 years of experience investing in cultural, environmental, and social projects. Their focus is to support organisations that benefit people and the planet. Transparency is at the heart of Triodos’ values; with their full list of beneficiaries published for all to view. In 2017, 38% of loans went to environmental projects which avoided 962 kilometers of carbon dioxide emissions entering the atmosphere (Ethical Consumer). Later in 2019, Triodos backed 73 clean energy deals worth a total of $630 million across Europe - including onshore and offshore wind, solar, hydro, and energy efficiency projects (Clean Energy Pipeline Global League Table).
Triodos’ focus on organic farming, renewable energy, ecological development, organic food, sustainable production, fair trade, and education aligns with our ethics and morals. Their experience of financing ethical projects is second to none and importantly, they pride themselves on transparency.”
In 2020 alone, Triodos revealed it had co-financed 561 sustainable energy projects with a total energy output of 5,100 MW - enough to electrify 4.5 million households worldwide. Backing was given to food and social housing projects, enabling 33 million meals to be distributed as well as providing residence for 59,000 people. Triodos’ commitment to ethical investing will help secure the health and future of our environment and communities - necessities that fossil fuel financing is threatening.
In their response to my letter, BrewDog cited that they would be working with HSBC on a sustainability project for their supply chain whilst also reviewing their banking options from a sustainability perspective. It’s a positive start and shows that an individual can have a positive influence on the direction and impact of the organisation. However, with large claims and PR stunts all too common, we need to be critical of such promises. Recent events at BrewDog, involving an open-letter about toxic company culture from 100 ex-employees, are an example of the opportunity for learning and development that businesses and brands have when employees speak up - as long as they listen.
We have to continue holding the organisations we work for, or buy from, to account for the impact they have, and in doing so create meaningful change in protecting the health and future of the planet.
You can make a difference by taking a small but significant step by opening discussions with your employer. Read my full letter to BrewDog here.
Follow up with:
‘Big banks’ trillion-dollar finance for fossil fuels ‘shocking’, says report’ (Guardian)
Inspired? Find out if your bank or energy provider is funding fossil fuels using switchit.money.