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Greenwashing in Finance — [Sir Edward Leigh in the Chair]
14 December 2021
Lead MP
Kevin Hollinrake
Thirsk and Malton
Con
Responding Minister
John Glen
Tags
EconomyClimateEnergyStandards & Ethics
Word Count: 3319
Other Contributors: 1
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 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:
Lead Contributor
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.
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
Government Response
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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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.