Commons Sense

House of Commons · Westminster Hall

Greenwashing in Finance — [Sir Edward Leigh in the Chair]

14 December 2021 · 1 other contributor · 3,319 words

Opened by Kevin Hollinrake Con Thirsk and Malton

Responding minister: John Glen

ClimateScience & Technology

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Kevin Hollinrake raised concerns about greenwashing in finance — [sir edward leigh in the chair] in Westminster Hall. A government minister responded.

Key points

  • Kevin Hollinrake raises concerns about greenwashing in finance, where companies overstate their environmental efforts to attract investment.
  • Hollinrake asks the government to clarify responsibilities for standardizing measures to judge green investments, including timelines and scope.
  • The minister acknowledges the need for robust measures to prevent misleading environmental claims and protect the credibility of green finance markets.

Key requests to Government

Hollinrake asks for clarity on who will be responsible for standardizing and harmonizing measures for judging green investments. He inquires about timelines, scope (including scope 3 emissions), alignment with the 1.5°C target, and mandatory transition plans for smaller companies.

How the debate unfolded

MPs spoke in turn to share their views and ask questions. Here's what each person said.

Opened the debate

Kevin Hollinrake Con Thirsk and Malton

Kevin Hollinrake is concerned about the issue of greenwashing in finance, where companies exaggerate their environmental credentials to attract investment. He cites examples such as BP's claim of installing solar panels on service stations despite being heavily invested in oil and gas, McDonald's switch from plastic to non-recyclable paper straws, and Coca-Cola's misleading claims of being environmentally friendly. Hollinrake emphasizes the importance of independent verification to ensure that investments are genuinely green, especially given the risk of stranded assets due to rapid decarbonization.

Other contributors (1)
  • Daniel Poulter Con Central Suffolk and North Ipswich

    Asked the Minister whether companies will only have to report on direct impacts or if they must also acknowledge indirect impacts through their supply chains.

Government Response

John Glen

The Government have high ambition to transform the UK financial sector and align it with net zero. London was ranked as the leading hub globally for green finance, overtaking Amsterdam. The minister acknowledged the need for a robust approach to tackle misleading or unsubstantiated claims about environmental performance by businesses and funds, which can undermine trust in the market and misallocate capital intended for sustainable investments. He outlined several measures including sustainability disclosure requirements (SDR) aimed at ensuring that firms cannot claim things without backing them up, mainstreaming climate change into financial regulation, and transition plans making publication of such plans mandatory within 12 months to improve transparency around how headline commitments translate into action.

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