Halifax, previously known as Halifax Bank of Scotland (HBOS), is a division of Bank of Scotland and a subsidiary of Lloyds Banking Group (hereafter referred to as “Lloyds”). As such, its policies and practices mirror that of Lloyds.
Lloyds has extensive coverage of Environmental, Social, and Governance (ESG) goals on its website, which indicates an incredibly strong dedication to the environment and sustainability. This serves as a stark but welcome contrast to many other financial institutions, whose attitudes towards sustainability involves simply dedicating a page or two on their websites to the matter.
Although Lloyds exemplifies above-average performance in addressing ESG issues, it and its subsidiaries still have room for improvement before they become top leaders in ESG. Not to mention, Halifax and Lloyds as a whole have bad reputations for engaging in highly unethical practices, which are worth taking into account when assessing how sustainable they are.
A telltale sign of how well an institution is faring in terms of sustainability is its ESG score. Halifax scored very highly in this regard, having received a near-perfect score of 96 from CSRHub. Halifax’s funds received decent ratings as well. According to Yahoo Finance, its European Fund G received an above-average portfolio sustainability score and its Smaller Companies Fund F received an average portfolio sustainability score. Evidently, these scores are not perfect, thereby leaving room for Halifax to do better, but its performance is already quite impressive.
Furthermore, Halifax offers financial incentives for clients to invest in energy-efficient living. For instance, Halifax has a green mortgage cashback scheme that offers £250 cashback to homebuyers purchasing homes with an Energy Performance Certificate (EPC) rating of A or B. Additionally, the Halifax Green Living Reward provides up to £1,000 cashback for home energy improvements. Clients can receive £500 cashback for incorporating one or more of the following improvements in their homes: insulation, low carbon heating system, improved windows and doors, heating controls, solar panels and solar battery storage. Alternatively, clients can receive £1,000 for installing a ground or air source heat pump. Applicants of the Green Living Reward are simultaneously eligible for a similar Boiler Upgrade Scheme (BUS), which offers £5,000-£6,000 to property owners in England and Wales to replace boilers with low carbon heating systems (air source heat pump, biomass boiler, or ground source heat pump). Halifax even notes on its website that in the case that applicants for the Green Living Reward encounter delays that are beyond their control, they can fill out an online form to notify Halifax about this so that they can still receive the reward. This act of flexibility and understanding shows that Halifax truly wants its patrons to engage in sustainable living and is willing to help them work through obstacles that may prevent them from doing so.
Nonetheless, before becoming a part of Lloyds, Halifax possessed £483.4 million worth of shares in UK arms companies. Its involvement with this industry suggests that Halifax holds some questionable investments, which is a major point of concern.
Halifax has a net-zero carbon operation pilot branch in the town of Brighouse. The establishment of this branch, along with two others for other Lloyds subsidiaries, is part of Lloyds’ goal to reach net-zero operations emissions by 2030. These branches specialize in minimizing direct carbon emissions (Scope 1 and 2 emissions). To do this, they installed LED lighting, which lasts longer and consumes 80% less energy than traditional fluorescent light bulbs; the amount of energy saved is enough to power an average UK household for two years. They also upgraded their heating systems by replacing gas boilers with low carbon heat pumps and reduced refrigerant gas leakage levels from cooling systems to nearly zero by using heat recovery technology and leak sensors. Admirably, 100% of electricity comes from renewable sources. Aside from mitigating direct emissions, they installed electric vehicle charging stations for employees and clients, water-efficient faucets and toilets, advanced insulation systems, new windows and glazing, and low carbon paint in order to reduce indirect emissions by encouraging more sustainable practices from employees and customers.
Notably, the Department for Business and Industrial Strategy (BEIS), a governmental department of the United Kingdom, bestowed upon Halifax the Green Home Finance Innovation Fund, which funds loans for environmentally-friendly home improvements. On its website, it acknowledges that the COVID-19 pandemic has led to many people working from home, making it more crucial for homeowners to be aware of and improve their homes’ energy efficiency.
Halifax also partnered with Energy Saving Trust to develop a Green Living Hub, which features articles about sustainable living as well as a Home Energy Saving Tool that helps homeowners find simple solutions to increase energy efficiency and lower energy bills.
As mentioned before, Halifax’s mission reflects that of Lloyds’. Lloyds is committed to creating a more sustainable future by supporting the transition to a low carbon economy. It lists ambitious goals for cutting down its carbon emissions: Lloyds is aiming to reach net-zero in the carbon emissions it finances by 2050 or sooner (with a benchmark of reducing them over 50% by 2030), while aiming to reach net-zero emissions in its own operations by 2030. While this all may appear too good to be true, to the point of seeming like greenwashing, there is evidence that Lloyds is actually taking steps towards its sustainability goals. To highlight, in its 2021 Climate Report, it shows that its emissions levels have indeed been decreasing from 2019 to 2021.
Yet, in the midst of this outstanding attention to climate change, the glaring question of how ethical Lloyds and its subsidiaries are must be addressed. In the early 2000s, Halifax was involved in one of the biggest banking frauds in the UK. Halifax employees were convicted for charges such as fraud, bribery, money laundering, participating in a corruption scheme involving £245 million and extensive financial damage to many businesses and individuals, and more. Also, in 2003, an investigation conducted by The Money Programme found that Halifax was involved in mortgage fraud. Halifax is also believed to be involved in tax havens, since its parent group Lloyds has been linked to numerous tax haven subsidiaries — not to mention, Halifax is not very transparent about its dealings with tax havens.
Overall, Halifax’s moral code is deeply flawed, which casts a shameful pallor on its shining devotion to sustainability.