For fossil fuel firms, greenwashing is just good business

Greenwashing — the marketing spin that tries to convince us that products and services are “green” or “sustainable” — is running rampant in Canada. But attempts to protect Canadian consumers through amendments to the federal Competition Act have sparked outrage from the fossil fuel industry and its friends in Ottawa.

Last month, under the excuse of “multitasking,” senator Pamela Wallin, chair of the Senate banking committee, asked the Competition Bureau to respond to concerns from the Pathways Alliance that new greenwashing provisions proposed to be added to the Competition Act by Bill C-59 "would create a chilling effect and prevent companies from making statements about their environmental performance or their plans."

At the time, the committee was not studying Bill C-59 and Competition Bureau witnesses were testifying on an entirely different matter. The Senate banking committee has not been tasked with studying Bill C-59 at all, as the bill has been referred to the Senate committee on national finance. The concerns from the Pathways Alliance were in a private letter that is not part of the public record, as it was not submitted using the official Senate submission portal.

You’ll likely recognize the Pathways Alliance from their TV, radio, bus, and billboard ads about reaching net-zero emissions in the oilsands. Pathways is a coalition of the largest, most profitable oil companies in Canada.

Their ads are part of an intense campaign to get taxpayer dollars to cover their proposed carbon capture and sequestration (CCS) project in the oilsands. But Pathways Alliance is currently under investigation by the Competition Bureau for false and misleading advertising, while a recent peer-reviewed study found that the coalition engages in several types of greenwashing: "We identify instances of selective disclosure and omission, misalignment of claim and action, displacement of responsibility, non-credible claims, specious comparisons, nonstandard accounting, and inadequate reporting."

Not the most credible voice on greenwashing legislation, you might say.

Then came the absurd claim by the Alberta Minister of Environment that the amendments amount to a “gag order.” And what exactly were these guardians of free speech so concerned about? Bill C-59 proposes to require companies that make claims about the environmental or climate impact of their products to back them up. Basically, don’t lie to Canadians.

That even such moderate efforts to protect consumers face such howls of outrage highlights the disproportionate influence of Canada’s fossil fuel industry on our democracy and how it undermines federal efforts to align business with climate and environmental goals.

It’s no surprise that companies promoting “net-zero fossil fuel production” — an oxymoron if there ever was one — might be worried about stronger laws against false and misleading environmental claims.

Reality checks

The U.S. Senate’s budget committee and House oversight committee recently concluded the fossil fuel sector’s “massive public-facing campaigns portray CCS as a viable and available solution to increasing greenhouse gas emissions, but the companies acknowledge internally that they are not planning to deploy the technology at the scale needed to solve the warming crisis.” The committee also noted that “[t]he industry’s true goal is to prolong, perhaps indefinitely, the unabated use of fossil fuels.”

A 2022 study by Harvard University researchers identified some form of greenwashing in 72 per cent of social media posts by oil and gas companies. Those findings are echoed by the European Commission and Australian authorities to the combined effect that a majority of environmental claims reviewed are concerning.

These proposed amendments to the Competition Act are an effort to address a systemic and important issue: without evidence-based claims, consumers cannot exercise an informed choice as to the real impact of the consumption for which they often pay a premium.

A lack of clear rules breeds deception and cynicism from consumers, with both contributing to further delaying and obstructing the more efficient and just transition towards resilient, healthier communities and economies.

Lax rules on greenwashing benefit polluters to the detriment of companies genuinely investing in greening their operations. In the global race to zero, Canada can’t afford to waste time driving down a dead end to false solutions.

Finding a solution

Any “chilling effect” on companies — when they purposely keep quiet about their sustainability targets for fear of saying the wrong thing — can be avoided with clear guidance from the Competition Bureau, which has already committed to deliver this, just like the U.S. Federal Trade Commission’s green guides and the UK Competition and Markets Authority’s Green Claims Code. Or, even better, comprehensive legislation could set out detailed criteria to help companies distinguish between what is truly aligned with a climate-safe economy and what is not.

The Climate-Aligned Finance Act (CAFA), which has been languishing before the same Senate banking committee, is such a proposal. CAFA would require federally regulated financial institutions, private companies and Crown corporations to make yearly disclosures of their plans, targets and progress on climate commitments.

Importantly, it defines the criteria for what a climate commitment actually means — including requirements to avoid lock-in of new fossil fuel supply, preserve and restore natural carbon sinks and reduce emissions in a way that respects the dwindling carbon budget, while respecting Indigenous rights and environmental and social goals.

Former Bank of Canada and Bank of England governor Mark Carney, testifying on CAFA, “welcome(d) the legislation’s proposed requirements that firms develop and disclose net-zero targets and transition plans.” adding the U.K., U.S., EU, Japan, Hong Kong, Singapore and Switzerland are already implementing transition requirements.

Or in the words of Ellen Quigley, senior research associate in climate risk and sustainable finance at the Centre for the Study of Existential Risk, who testified before the House of Commons environment committee, without such detailed criteria, “transition plans are not worth the paper they are written on.”

Bill C-59 only requires companies to back up green claims they choose to make. CAFA would go further in leveling the playing field by requiring companies to disclose both the negative and positive climate impacts associated with their business, not just their one-sided marketing claims. This is the missing piece that would protect Canadian consumers from being duped by phony green claims and future-proof the economy.

Both bills are before the Senate, which faces dangerous distractions from Canada’s biggest polluters — the fossil fuel industry. As we head into wildfire season, let’s remember that truth and transparency are essential for real action on climate change.

Let’s pass Bill C-59 and CAFA without delay.

Karine Péloffy, MSc. B.C.L. L.L.B, is a lawyer and project lead for sustainable finance with Ecojustice. Leah Temper, PhD, is director of health and economic policy for the Canadian Association of Physicians for the Environment.