Canada’s eco-shaming rules apply to everyone, not just the oil sands

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A group formed by six of Canada’s largest oil sands companies that is working to reduce greenhouse gas emissions in the coming decades surprised many people last week by removing all of its content from its website after the government passed Bill C-59, which, among other things, others regulate what some call “greenwashing”.

The Pathways Alliance aims to reduce oil sands emissions by 22 million tonnes per year by 2030 and achieve net zero emissions by 2050 through technologies such as carbon capture and storage and nuclear power. One of the company’s goals is to build a large carbon capture and storage project in the Cold Lake region of northeastern Alberta.

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The oil and gas sector is the largest single source of emissions in Canada, accounting for about 28 per cent of the country’s total emissions in 2021, according to government data.

Here’s why the group decided to remove the content and why the change to Canada’s Competition Act affects more than just the oil sands.

What is greenwashing?

The act of greenwashing occurs when companies provide false information about how environmentally friendly their products are or when they deceive the public by making unsubstantiated claims about the steps they are taking to protect the environment or reduce greenhouse gas emissions.

In 2015, Canada and 194 other countries signed the Paris Agreement, under which the world aims to limit the increase in average global temperature to below 2°C. To this end, Canada aims to reduce its carbon dioxide emissions by 30 percent below 2005 levels by 2030.

To achieve this goal, Canada would need to reduce its dependence on greenhouse gas emissions in certain carbon-intensive sectors, such as transportation and oil and gas. Therefore, the federal government wants to make sure that companies are actually taking steps towards achieving this goal and not just participating in deceptive marketing practices.

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Why did Pathways respond?

Pathways decided to remove all content from its website following the adoption of the draft law amending the Competition Act.

The bill adds two environmentally related paragraphs to the section of the Competition Act that deals with deceptive marketing practices. The supplements indicate that the environmental protection methods promoted by entrepreneurs must be based on proven methods and be consistent with “internationally recognized methodology”.

Pathways Alliance, which includes Canadian Natural Resources Ltd., Cenovus Energy Inc., ConocoPhillips Canada, Imperial Oil Ltd., Meg Energy Corp. and Suncor Energy Inc., has a problem with the apparent vagueness of additives.

“Creating a public disclosure standard that is so vague as to be meaningless and based on an undefined ‘internationally recognized methodology’ opens the door to frivolous litigation,” the association said in a June 20 statement. “This poses a serious threat to freedom of communication.”

She stated that the decision to remove the content was not due to a lack of belief in what it was promoting, but because of the “significant uncertainty and risk” it poses to all Canadian businesses, regardless of sector. He added that the legislation would also “silence” Canadian companies.

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The federal government disagreed with the alliance and said the adoption of the bill was “good news” for the market.

Environment Secretary Steven Guilbeault said he hasn’t seen oil and gas companies follow through on their commitments to “put shovels in the ground for projects” that will lower emissions.

“It’s simple: consumers deserve to know the truth about the oil and gas sector’s record profits,” he said in a statement.

How are other industries reacting?

As with Pathways, the Canadian Association of Petroleum Producers (CAPP), which represents almost three-quarters of Canada’s annual oil and natural gas production, has also limited the amount of information on its website and digital platforms until further guidance is issued by the Competition Bureau .

“These amendments were proposed without consultation or clarity on the guidelines or standards that must be met to achieve compliance,” Thursday’s statement said.

It said the changes were designed to ensure that complainants “assume no risk or liability” and that the burden rested solely with companies to justify their public comments.

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These changes empower private entities to force companies to appear before the Competition Tribunal to defend themselves, a change from the current practice where only the bureau enforces misleading advertising rules, he said. This opens the floodgates for “resource-draining complaints.”

Canada’s largest mining association expressed a similar sentiment in a letter sent late last month to Deputy Prime Minister Chrystia Freeland and Industry Minister François-Philippe Champagne.

The vagueness of the proposed amendment could force companies to “present very conservatively” their environmental efforts, which could hurt their ability to secure investment, said Pierre Gratton, chief executive of the Canadian Mining Association.

He said the legal review showed that the lack of clarity around “internationally recognized methodology” was of serious concern.

“It is unclear how a bureau or tribunal would apply this standard, and the ambiguity may lead to ongoing uncertainty and compliance risk,” he said.

The Canadian Banking Association, which represents the country’s largest banks, said it was still reviewing the changes.

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“Banks in Canada are implementing climate action plans and reporting on their actions,” Maggie Cheung, the group’s media relations manager, said last week. “This includes working with customers… helping them advance their sustainability goals and seize energy transition opportunities, as well as finance new and existing green projects.”

The Canadian Chamber of Commerce, which represents about 200,000 businesses, expects the changes will limit companies’ ability to contribute to the country’s climate goals. A statement issued last week said the recent changes had created a sense of uncertainty for companies.

Alberta vs. Ottawa

Alberta Premier Danielle Smith said her government is “actively exploring the use of every legal option” to protect its energy sector from “draconian” legislation.

“Alberta is a world leader in complex efforts to reduce emissions from our energy industry,” she said in a statement Thursday. “We need a transparent partner in Ottawa that is willing to work with us and not demonize one of Canada’s largest employers and industries.”

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According to CBC, Prime Minister Justin Trudeau said it was important for “people to build their positions and decisions based on facts.”

“Now freedom of speech, the freedom of people to share their points of view, is extremely important. This is one of the foundations of a free and open democracy,” he said on Thursday. “But we need to make sure that people debate, discuss and base their worldview on things that are grounded in truth and reality.”

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