My recent study explored this question. My co-researchers and I found that, for most retail investors – individual, non-professional investors – the presence of a green label mattered more than the actual environmental impact of the bond or the higher financial return of a non-green option.

This finding raises critical questions about how sustainable finance is marketed and whether green labels alone are enough to drive real environmental change.

Green bonds and retail investors

Green bonds are a financial tool designed to fund environmentally friendly projects. Institutional investors and governments have embraced them, but their adoption by everyday retail investors remains low.

The Canadian market was one of the first to provide access to retail-level green bonds, but demand for such bonds was always oversubscribed. Low interest rates made it difficult to balance investor returns with lending profits. This imbalance squeezed sustainable investment firms like CoPower, which ultimately led to its green bond model winding down.

With the urgent need to attract capital for climate financing, the role of retail investors is now a key topic of discussion. In 2021, these investors accounted for 52% of global assets under management in 2021 – a figure expected to jump to nearly 61% by 2030. This presents a massive opportunity to mobilize private capital toward sustainable finance.

However, before retail investors venture into the green bond market, the sustainable finance sector must address a key question: do people invest in green bonds because they believe in their environmental benefits or simply because of the “green” label?

And, more importantly, does the green label alone persuade retail investors to accept a “greenium” – choosing a lower-return green bond over a higher-return non-green bond – like professional investors do?

The ‘green-label effect’ is real

To determine this, my co-researchers and I conducted an experiment with more than 1,000 self-identified retail investors to see how different framing techniques – such as labels, environmental impact and reporting descriptions – shaped their willingness to invest in green bonds.

Our study identified a “green label effect.” Most retail investors relied on green labels as a shortcut to save time and avoid having to evaluate the environmental impact of a bond. Investors often relied on simplified decision cues like labels and financial returns to navigate complex financial information.

However, a small subset of environmentally conscious investors researched the validity of green bonds and aligned their investments with their values, even at the cost of lower returns. This highlights the need for green bonds that offer a competitive return, given that a majority still invest based on financial returns in addition to labelling. Labelling alone is not enough to drive mainstream retail investment in sustainable finance.

Our study also found that certain types of personal characteristics made people more likely to invest in labelled green bonds, even if those bonds had the lowest financial returns. Investors with a high-risk tolerance were more likely to invest in green bonds.

Additionally, previous investment experience played a role. Those who had moderately invested in stocks had none to high levels of experience investing in bonds.

The greenwashing challenge

Our findings highlight both the potential and pitfalls of sustainable finance. The popularity of green-labelled bonds suggests that retail investors are open to sustainable investment and would help to drive growth in this market considerably.

However, the fact that many choose labels without finding out whether the bond is actually green raises concerns about greenwashing. This practice occurs when companies exploit sustainability branding and use green labels on non-green bonds to avoid delivering environmental impact.

Vasundhara Saravade is a postdoctoral fellow at the Institute of the Environment, L’Université d’Ottawa/University of Ottawa.

This article was first published by The Conversation. It has been edited to conform with Corporate Knights style. Read the original article here.

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Call it the John Oliver effect. The last few years have seen a surge in satirical web series with their targets set squarely on bad actors in government and the fossil fuel sector. Foremost among them is Climate Town, a YouTube channel run by comedian Rollie Williams, whose long-form takedowns of oil and gas disinformation are deeply researched and addictively hilarious for his nearly 600,000 subscribers.

Williams may be the current reigning king of climate comedy, but his court of jesters is growing rapidly, thanks in part to private donors, non-profits and family foundations using their resources to support comics making jokes about climate change. In October, the Center for Media & Social Impact received US$1 million in new donor funding for its humour programs, including the Climate Comedy Cohort, a nine-month fellowship that puts together comedians with climate scientists.

It’s an auspicious pairing. The U.K.-based series Climate Science Translated garnered nine million views on X alone, by having well-known comedians function as interpreters for researchers. “Climate science is complicated, so we’re translating it into human,” the series claims. When University College London climate scientist Bill McGuire says that there are up to 1.4 trillion tons of methane that could be released from permafrost in Siberia, Welsh comedian Kiri Pritchard-McLean explains, “Evil gases literally exploding out of the ground in Siberia: I’m no David Attenborough, but that shit’s not right, is it?”

Adam McKay is another big name in the climate comedy space. The creator of Don’t Look Up and other blockbuster Hollywood comedies has received philanthropic funding to launch Yellow Dot Studios, a media non-profit that uses comedy, parody and striking visual edits “to raise awareness and mobilize action on the climate emergency.” His collaborators include the SNL alumnus Tim Robinson, the chaotic comedian behind I Think You Should Leave, and Rainn Wilson, who played Dwight in The Office.

But can climate change really be funny? You’d be forgiven for doubting. Here’s the peak of punchlines that you can find on the internet: “Why don’t people take climate change seriously? It’d be a lot cooler if they did.”

We can do without climate jokes, but climate humour is something we really do need, if only to make sense of the jargon, wonkery and greenwashing that permeates the space. “It’s easier to engage when you are laughing,” says Aaron Hagey-MacKay, a comedian and creator of The Goose Media in Canada. “There is some joy to doing comedy in this regard because it’s such a heavy and boring subject. What a boring apocalypse this is! It’s death by graphs.”

Hagey-MacKay creates sarcastic explainers on topics like Canada’s carbon tax, and he’s found plenty of traction online for his climate-focused satire. The Goose currently has more than 11,000 followers on TikTok, and last year he received funding from Montreal’s Trottier Family Foundation – by way of the Small Change Fund – to continue his work. “I won’t lie, it was a bit of a bet,” acknowledges Jean-Patrick Toussaint, senior director of Trottier’s climate program, which generally funds traditional climate action, such as clean energy development. But Toussaint says that with its Comedy for Climate project, the foundation wanted to support efforts to reach an audience the environmental sector as a whole has not traditionally tapped into.

Apart from The Goose, Trottier is funding Lil D’Bunk, a YouTube series that features child actors debunking greenwashing myths like “natural gas”; The Big Oil Alliance, an award-winning series by Artists for Real Climate Action that sends up climate commitments by fossil fuel industry associations; the Webby Award–winning Hot Globe show; and an upcoming series by Sean Devlin, the comedian who created Shit Harper Did, called The Weird Weather Report.

As John Oliver’s brand of blistering and surprisingly informative mockery demonstrates, satire can be a more effective tool for communication. “No one wants to hear about climate right now,” Hagey-MacKay admits. “With creeping fascism, war and affordability issues more top of mind, it’s not even registering.” He’s learned to couch his climate communications in more immediate concerns, he says, like the affordability crisis. “The good news is that climate touches everything, so you can always find a connection point.”

The post Can comedians save the climate movement from jargon and greenwash? appeared first on Corporate Knights.

The effort comes as transit agencies in Canada’s largest cities have either implemented or are considering similar restrictions on using public transit to advertise for Big Oil or related industries. Montreal’s transit agency, the Société de transport de Montréal, has indicated that it intends to ban misleading fossil fuel advertising. Toronto’s proposal would potentially remain open to ads that align with the city’s net-zero goals and don’t run afoul of new federal anti-greenwashing regulations.

In September, DeSmog reported that Toronto City Councillor Dianne Saxe had introduced a motion proposing to restrict false and misleading advertising from oil and gas lobby groups on public transit. The motion did not advocate for a full ban on all fossil fuel ads.

“Toronto’s decision to limit fossil fuel advertising is a landmark win for public health and climate action,” said Melissa Lem, a family physician and president of the Canadian Association of Physicians for the Environment (CAPE), in a statement. “As physicians, we’ve long recognized that fossil fuel pollution, like tobacco smoke, poses severe health risks to our communities – especially to children and other vulnerable populations.”

Pushing back against false claims by Big Oil

The new limits come on the heels of federal anti-greenwashing regulations that aim to stem the tide of misinformation produced by Canada’s fossil fuel sector and its lobbyists. They also follow a series of high-profile advertising campaigns launched by the oil and gas industry. 

Pathways Alliance, a consortia of Canadian oil sands producers, has been the most visible, with a comprehensive media blitz involving traditional print and broadcast advertising, advertorials, sponsorship and the use of public transit infrastructure – including buses and streetcars – that suggests they are taking an active role in reducing emissions. 

In fact, the Pathways Alliance is principally interested in developing a $16.5-billion carbon capture and sequestration project, as well as a 400-kilometre carbon dioxide pipeline to serve about 20 different tar sands production facilities.

Critics of the project, and carbon capture more broadly, argue that carbon capture overpromises and consistently under-delivers on its alleged environmental advantages. DeSmog previously reported that Pathways paid Google to redirect web searches on environmental and climate-change topics to its website, and further paid Google to redirect web searches specifically on the subject of greenwashing. When new anti-greenwashing regulations came into effect in Canada earlier this year, Pathways removed all content from its website.

Councillor Saxe specifically mentioned both Pathways Alliance and Canada Proud as two lobby groups the Toronto Transit Commission should cease advertising.

This bold move signals the end of unchecked fossil fuel advertising and positions Toronto at the forefront of a global shift.

—Melissa Lem, president of the Canadian Association of Physicians for the Environment

In reaction to the Pathways “Let’s clear the air” campaign, three Canadian environmental groups complained to the Competition Bureau in the spring of 2023, arguing that the campaign was misleading the public. The Competition Bureau, an independent Canadian law-enforcement agency tasked with protecting consumers and promoting competition, agreed to launch a still-ongoing investigation.

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In August 2023, DeSmog reported that Montreal’s bike share program, Bixi, had decided to pull ads for the Pathways Alliance. Pathways had also been advertising on Montreal bus shelters at the time, as well as using buses in Vancouver and streetcars in Toronto as mobile billboards. They featured slogans such as “Our net zero plan is in motion.”

In late 2023 and early 2024, ad campaigns by the Canadian Association of Petroleum Producers and Canada Proud (an allegedly grassroots pro-oil lobby group) were spotted on public buildings throughout the Canadian capital of Ottawa. Ads by these groups have promoted claims that Canadian oil and gas resources are either in high demand or will reduce global emissions.

These high-profile campaigns, in addition to the campaign by Pathways Alliance, led various environmental groups in Ottawa to propose similar bans on fossil fuel advertising. Ad Standards Canada later determined that some of those Ottawa ads by Canada Action, particularly those that argued that Canadian exports of liquefied natural gas would reduce emissions globally, were misleading and amounted to greenwashing.

Mounting a defence against greenwashing

Pressure to crack down on fossil-fuel-advocacy advertising and greenwashing has been ramping up steadily over the past year in Canada. In February, DeSmog reported that long-serving Member of Parliament Charlie Angus proposed a private member’s bill that would ban misleading fossil fuel advertising.

Angus’s proposal was in response to the aforementioned ad campaigns by Pathways and Canada Action. His proposal was further modelled on anti-tobacco-advertising legislation passed in Canada in the 1990s. That proposal wasn’t passed but resulted in fossil fuel advocates spreading misinformation about it. Angus’s office was subsequently inundated with death threats. 

In June, Bill C-59 – another government effort to crack down on greenwashing – became law. Though mischaracterized as a ban on fossil fuel advertising, the new regulations in fact require environmental claims to be backed up with evidence. This prompted tar sands producers and industry lobbyists to scrub content from their websites, including their own environmental goals. 

Oil advocates, including the former and current environment ministers of the Canadian province of Alberta, continue spreading misinformation that the anti-greenwashing laws are part of a broad conspiracy to silence the fossil fuel sector.

“This bold move signals the end of unchecked fossil fuel advertising and positions Toronto at the forefront of a global shift,” CAPE’s Lem said of the Montreal and Toronto developments. “Toronto is clearing the air of both pollution and misleading propaganda, setting a powerful precedent for cities nationwide and globally, moving us toward a healthier, more sustainable future for all people in Canada.”

This article was first published on DeSmog. It has been edited to conform with Corporate Knights style. Read the original story here. 

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Some of the concerns raised by opponents – which include the Government of Alberta and even a former commissioner of competition – are legitimate. Ironically, though, opponents have made several misleading comments about this measure, itself aimed precisely at combating misinformation.

One of opponents’ chief complaints is that requiring companies to substantiate their green claims using “internationally recognized methodology” introduces unreasonable uncertainty, potentially stifling green claims and cleantech investments.

As with any new law, case law and guidelines will gradually clarify the scope of the requirements. The Competition Bureau has already issued interim guidance and plans to issue more. It’s true that the bureau’s guidance, which is not legally binding, won’t provide total certainty. However, this is only an argument for the government to issue regulations laying out which substantiation methods companies should use, as in the European Union.

In the meantime, companies may look at the dozens of international standards that are already commonly used as the backbone of sustainability disclosures, such as those of the Greenhouse Gas Protocol and the Science Based Targets initiative. For technologies so cutting-edge that they lack dedicated standards, generic substantiation methodologies, such as ISO 14063:2020, should be considered, and companies should be transparent about any limitations of new tech.

In fact, rather than preventing honest businesses from making claims, these new rules will help them stand out. Consumers and investors are currently flooded with environmental claims – and they are learning not to trust any of them. By reducing the number of speculative and misleading claims, the provisions will allow true industry leaders to shine through.

Other jurisdictions, including the United States, the United Kingdom, France and Australia, also have substantiation requirements for environmental claims, with guidance available to help businesses comply. If foreign companies can meet their requirements, Canadian firms can too.

Some concerns have also been raised about the size of the maximum penalties under these rules, which can be up to 3% of a company’s annual worldwide gross revenue. However, maximum penalties, which are imposed only in the most egregious cases, are not representative of the risks raised by the amendments. In fact, the Competition Act prevents the Competition Tribunal from imposing penalties on firms that make sufficient efforts to comply with the law.

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Challenging the amendments on the basis of freedom of expression is unlikely to be successful. Their purpose is to increase the public’s access to truthful information about companies’ efforts to combat the climate and ecological crises of our time. In addition, the new requirements have a limited impact on companies’ freedom of expression, because they restrict only claims that are not backed by evidence. Moreover, past constitutional challenges of similar substantiation provisions indicate that they can withstand constitutional scrutiny.

The amendments are also unlikely to spark a wave of frivolous greenwashing suits by non-governmental organizations and environmental activists. Past experience under provincial deceptive-marketing laws shows this has not been an issue. In addition, the potentially high costs on NGOs if they lose a case will deter baseless lawsuits. Just last year, the Competition Bureau was required to pay $13 million in legal costs after its failed challenge of the Rogers/Shaw merger. Furthermore, the Competition Tribunal has the authority to dismiss cases that are not in the public interest, providing a safeguard against frivolous claims.

Finally, the amendments were not rushed through without public debate, as has been claimed. Greenwashing was widely discussed during a public consultation on the reform of the Competition Act undertaken in the winter of 2023. Greenwashing was also widely debated in committee in the House of Commons and the Senate, where several stakeholders including the Competition Bureau noted the importance of ensuring that claims about businesses and their activities – such as net-zero targets – be subject to the new substantiation requirements.

The ongoing scaremongering campaign is unwarranted and risks turning into a self-fulfilling prophecy, leading companies to overestimate the legal risks associated with the changes and effectively chill green claims. Yes, the amendments could be improved, but companies that do their homework and make good-faith efforts to ground their claims in scientific principles will be largely unaffected. In fact, they are likely to benefit from the end of cheap green talk.

Iris Fairley-Beam is an independent legal researcher. Julien O. Beaulieu is a lecturer in law at the University of Sherbrooke and a researcher with the Quebec Environmental Law Centre.

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Since the early 2000s, ESG integration has become a widely used strategy in the financial industry. If your mutual fund claims to use this strategy, it’s essentially telling you that fund managers consider company data on environmental, social and governance factors in their investment analysis and decisions. Most managers, however, use it to improve financial returns rather than achieve social or environmental objectives.

The strategy has come under increasing criticism in recent years as a marketing tool to attract ESG-focused investors. In a case that received a lot of attention, DWS agreed to pay $25 million to the U.S. Securities and Exchange Commission after it accused the German asset manager in 2022 of greenwashing by labelling its investments “ESG-integrated” while only a very small proportion of portfolio managers used ESG ratings.

The Canadian Investment Funds Standards Committee (CIFSC), a body of investment management and data providers that oversees national fund standards, decided to take action. As of August 31, the strategy is no longer considered an acceptable approach for any fund wishing to be officially recognized as a responsible investment fund.

The crux of the problem is that it’s not possible to distinguish an ESG-integration fund from a non-ESG mutual fund “because there is no guarantee of a defining feature, nor is there any promise that ESG information is being used at all,” CIFSC said in an industry release. “This would increase the potential of perceived greenwashing for investors who seek to find ESG objective funds.”

The new policy tells the mutual fund industry, in effect, that it’s okay to use ESG integration as an investment tool – just don’t call your fund a responsible investment fund because you use it.

“ESG integration is a process,” said Fundata Canada vice-president John Krisko, who also serves as CIFSC’s vice-chair, in a company blog. “A process does not have an objective, or a measurable endpoint.”

The CIFSC action is part of an overall effort by the responsible investment industry to turn the tide on greenwashing. A global set of common definitions has been established by global responsible investment networks. Researchers and asset managers are pulling back on their estimates of ESG assets as trillions of dollars in investments once considered to be “responsible” or “sustainable” are now judged to be of doubtful ESG validity.

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In March, the Canadian Securities Administrators (CSA), the network of provincial financial-industry regulators, issued a highly critical report on ESG fund disclosures, saying lack of transparency on ESG practices can lead to the perception of greenwashing.

Securities commission staff observed “a considerable increase” in funds claiming to consider ESG factors, without being clear on the extent of ESG decision-making. “To prevent greenwashing, the name and investment objectives of a fund should accurately reflect the extent to which the fund is focused on ESG,” CSA staff said.

The CSA called on the industry to bring clarity and consistency to disclosure and communications to avoid misleading investors on the nature of ESG funds they purchase.

CIFSC oversees classifications for Canadian mutual funds on matters such as asset classes (cash, fixed income, equity, for example) and how funds are sold (commission-based, fee-based advice, do-it-yourself and institutional). Since 2022, CIFSC has also maintained an RI fund list, providing a definitive easily accessible register of responsible investment funds for investment managers, advisors, investors and the public.

To make it to the list, ESG funds must employ one of the following strategies: ESG exclusions (screening out specific industries, sectors, regions or companies; i.e., oil and gas), ESG best-in-class investments that meet certain desirable criteria (i.e., human rights leaders), ESG thematic investing (sectoral themes; i.e., clean energy), ESG-related engagement and stewardship (using shareholder influence to effect change) and impact investing (investing to bring about certain outcomes; i.e., increase affordable housing). Prior to this summer, ESG integration was also on the list.

In August, after notification that ESG integration would be removed as a qualifying strategy, approximately 40 funds out of about 500 on the list asked CIFSC to remove the strategy from the flags for their fund. All but one of these funds remained on the list by flagging one or more of the other approved strategies, according to CIFSC chair Danielle LeClair.

While this might imply that most funds do not use ESG integration as a greenwashing tool, CSA staff pointed to a significant number of investment manager websites that suggest that all or most of their funds consider ESG factors. Yet staff found no disclosures of ESG specifics in fund prospectuses.

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

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The terms are contained in Bill C-59, which received royal assent last week and includes several changes relevant to companies doing business in Canada. Among them are amendments to the Competition Act that intend to address unsubstantiated environmental claims.

The bill prohibits a public “statement, warranty or guarantee of a product’s benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change” if the claims are not based on “an adequate and proper test.” It also demands that the claims be in accordance “with internationally recognized methodology.” In both cases, the onus is on the person making the claims to provide the relevant proof. In addition, consumers will now be able to take their complaints directly to the Competition Tribunal. Those found to be in violation could be slapped with penalties up to $15 million and 3% of a corporation’s annual worldwide gross revenues.

A coalition of environmental and health organizations celebrated the bill, describing it as “a potential watershed moment” in dealing with the “systemic problem” of making spurious environmental claims. “False green claims, or greenwashing, not only deceive consumers but also contribute to pollution and environmental degradation, with serious implications for human health,” said Leah Temper, with the Canadian Association of Physicians for the Environment (CAPE), an organization that has been pushing to ban fossil fuel advertising altogether in Canada. In addition, “it skews the competitive landscape, impairs sustainable consumption decisions, harms consumer trust and undermines companies’ incentives to invest in green innovation,” noted Tanya Jemec, a lawyer at Ecojustice.

While most of the attention has been focused on oil and gas companies, the regulations in Bill C-59 are not specific to any one industry, suggesting that new scrutiny could now be applied to popular terms such as “net-zero,” “carbon-neutral” and “sustainable.”

For the Pathways Alliance, a coalition of six of the largest oil and gas producers in the country – and currently under investigation by the Competition Bureau for its environmental claims – the new rules create “significant uncertainty” for companies trying to communicate how they are trying to improve their environmental performance. As a result, it erased all content from its website, social media and other public communications. Other oil and gas companies have removed information from their websites or added disclaimers.

“This is a direct consequence of the new legislation and is not related to our belief in the truth and accuracy of our environmental communications,” Pathways Alliance said on its website.

The province of Alberta also chimed in with outrage, issuing a statement calling the legislation “absurd authoritarian censorship” that will serve only “to stifle the many billions in investments in emissions reducing technologies” and block the ability of Canadians to “hear the truth about the energy industry.” It said it was considering mounting a constitutional challenge or the use of the Alberta Sovereignty within a United Canada Act to “protect free speech.” In the days leading up to the bill’s royal assent, the province shut down its controversial Canadian Energy Centre, also known as its “energy war room,” a publicly-funded provincial corporation that had been created to defend the energy sector.

Law firms such as BD&P raised concerns about “the uncertainty and ambiguity” of the wording in the bill, but some advocates point to the fact that details will be fleshed out in guidance expected to be issued by the Competition Bureau to help companies know when they’re crossing a line. Environmental organizations say the legislation itself is already proving effective.

“The fact that Pathways Alliance has taken such drastic action shows that they know they don’t have evidence to support the story they’re selling on carbon capture, and that its member companies’ business plans don’t align with a net-zero future,” Emilia Belliveau, energy transition program manager for Environmental Defence, said in a statement.

The Pathways Alliance is behind a massive venture to build a carbon capture and storage (CCS) project that it says would help its member companies cut greenhouse gas emissions by 32% from 2019 levels by 2030 – an unproven technology that climate advocates say will simply give Canadian fossil fuel companies licence to keep drilling. The project involves building a 400-kilometre pipeline that would transport carbon dioxide from oil-sands facilities in northern Alberta to an underground storage chamber. A recent report from U.K. think tank InfluenceMap notes how, through Pathways, companies are branding themselves as “climate conscious entities” that publicly promote technologies like carbon capture storage “as a cover to weaken and block climate policy.”

InfluenceMap research shows that while Pathways presents “optimistic messaging” related to CCS publicly, correspondence with policy-makers suggests “a notable lack of confidence in CCS technology to achieve climate goals.” The Pathways Alliance is already under investigation by the Competition Bureau for its “Let’s clear the air” advertising campaign, which Greenpeace has alleged makes false and misleading claims about reducing emissions and helping Canada achieve its climate targets.

Ecojustice, CAPE, Équiterre, and the Quebec Environmental Law Centre called on François-Philippe Champagne, the federal minister of innovation, science and industry, to explicitly prohibit vague and hard-to-prove terms such as “green,” “eco-friendly” and “climate-neutral” through new regulations under the Competition Act. And they urged the Competition Bureau to hold public consultations before releasing finalized guidelines that will identify the standards that businesses are expected to meet. The European Union, for example, prohibits generic environmental terms such as “eco-friendly” and “biodegradable” and insists companies include clear specifications in prominent language on the same packaging, label or website.

“While the passage of Bill C-59 is a significant step towards clamping down on rampant greenwashing in Canada, gaps remain that will make it challenging to hold companies to account,” said Jemec, with Ecojustice, in a statement. That includes the kind of proof that companies will have to give to the public about their claims. While the Competition Tribunal might compel companies subject to complaints to provide this information during litigation, it might not be disclosed publicly, Jemec said

“And more importantly, what is still missing is transparency outside of litigation in the places where consumers are being bombarded with green claims,” she says. “This means that consumers – as well as competitors and regulators – are unable to easily verify the credibility of a company’s green claims at the time that they have to make decisions based on those claims, e.g. the point of purchase.”

France requires companies making environmental claims to disclose information about their claims in a format that is easily accessible at the time of purchase, for example with a QR code.

“Businesses that want the benefits of making a green claim should be willing and able to provide supporting information to the public upfront,” she said, “not just when challenged.”

The post Canada’s new greenwashing ban rattles fossil fuel industry appeared first on Corporate Knights.

“Many governments restrict or prohibit advertising for products that harm human health, like tobacco,” Guterres said in a speech on Wednesday at the American Museum of Natural History in New York City. “I urge every country to ban advertising from fossil fuel companies. And I urge news media and tech companies to stop taking fossil fuel advertising.”

Guterres’s latest rallying cry came amid a somber forecast about the planet’s future. According to the UN’s World Meteorological Organization (WMO), there is an 80% chance that the average global temperature will exceed 1.5°C above pre-industrial levels for at least one of the next five years. The new forecast from the WMO suggests that the speed at which the planet is warming has accelerated since 2015, when there was a near zero chance of such an event occurring. Last year was the warmest year on record.

Guterres’s comments on Wednesday took aim at the fossil fuel industry, “the godfathers of climate chaos,” and echo efforts spearheaded by the Canadian Association of Physicians for the Environment (CAPE), which has been pushing for a tobacco-style ban on misleading fossil fuel advertising since 2022. The organization’s campaign is the basis of a private member’s bill presented by New Democrat MP Charlie Angus, which has received significant backlash from oil and gas proponents.

CAPE has been critical of the lengthy and opaque investigation processes of Ad Standards and the Competition Bureau, which have fielded various greenwashing complaints in recent years. In January, the Competition Bureau launched an investigation into complaints of “deceptive marketing practices” by Enbridge Gas. CAPE, Environmental Defence, and Ontario Clean Air Alliance and a group of residents allege that the company is using false and misleading representations by telling customers that gas is the most cost-effective way to heat their homes and suggesting that it is “clean energy” and “low carbon.” Natural gas is primarily made of methane, a potent heat-trapping greenhouse gas.

In a separate case last month, CAPE released the results of an interim decision by Ad Standards, a non-profit regulatory organization, that found an advertising campaign claiming that liquid natural gas (LNG) from British Columbia “will reduce global emissions” to be “misleading” and “distorted the true meaning” of scientific statements.

The decision by the organization’s Standards Council responded to various public complaints regarding bright-green ads by a group called Canada Action that have covered newspapers, transit shelters, buses and radio spots in British Columbia and Ontario.

“Council unanimously determined that the evidence provided by the advertiser was insufficient to support the absolute claim that BC LNG will reduce global emissions,” the interim decision states. Rather, it notes, the evidence submitted suggests LNG “could reduce emissions if only taking into consideration the off setting of transitioning from coal to gas.” It said that some members of the Council took issue with the bright-green background colour on the ads “that was used to emphasize an environmental benefit that liquefied natural gas does not truly have.”

Ad Standards reached the interim decision in January, but it was made public only after CAPE received the leaked results from an anonymous source.

“These ads are textbook cases of greenwashing, right down to the colour of the ads,” said Dr. Melissa Lem, a Vancouver family physician and the president of CAPE. “We felt compelled to make this decision public because people in Canada have the right to not be misled about LNG’s harmful impacts on the climate, the environment and our health.”

Ad Standards, in turn, criticized the release of the interim decision, saying that it was not final and that the advertiser had appealed it. As a result, Ad Standards said it “will not be able to report the results of that decision publicly, or to comment further.”

Canada Action describes itself as a “grassroots non-profit organization that supports Canada’s natural resource sector.” Its campaigns have included messages such as “Domestic oil doesn’t compromise human rights” and “The world needs more Canadian energy.” Public filings show that it spent more than $5 million on advertising between 2017 and 2022. It’s not clear where all of its funding comes from, although The Narwhal reported in 2020 that $100,000 came from ARC Resources, a West Coast oil and gas company.

In its defence before Ad Standards, Canada Action reported that “as a result of coal to gas switching, 500 million tonnes of CO were prevented from entering the atmosphere since 2010” and that so-called natural gas emits up to 50% less carbon dioxide at its end use. It also presented studies showing how natural gas “can significantly reduce GHG emissions” when replacing coal in Asia. The International Energy Agency has previously reported that 500 million tonnes of CO2 were avoided from 2010 to 2019 by switching from coal to gas. But Ad Standards noted that Canada Action had not provided evidence of the expected increase of LNG demand.

In his speech, UN Secretary-General Guterres doubled down on his fiery rhetoric about global warming, warning that the world continues to play “Russian roulette,” while stressing that meeting the 1.5°C target is still possible.

“It is a disgrace that the most vulnerable are being left stranded, struggling desperately to deal with a climate crisis they did nothing to create,” he said. “We cannot accept a future where the rich are protected in air-conditioned bubbles while the rest of humanity is lashed by lethal weather in unlivable lands.”

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The criticism and attacks roared in from Freedom Convoy leaders, Alberta Premier Danielle Smith and Conservative Leader Pierre Poilievre, who slammed it as “censorship.” For two weeks, Angus’s office was inundated with calls from people hurling slurs at him and threatening death – including vows to force crude oil down his throat. 

“When I saw that kind of reaction I thought, well now we’re in a moment where, for the first time, we’re really taking on the lies of oil and gas in Canada,” he says. 

Similar to Canada’s ban on tobacco advertising that was enacted in 1989, Angus’s proposed Fossil Fuel Advertising Act ties the massive advertising budgets that promote oil and gas to the issue of human health. 

“Air pollution caused by fossil fuels leads to millions of premature deaths globally, including tens of thousands of premature deaths in Canada alone,” the bill says. It points out that air pollution is a major cause of respiratory illnesses, cancer, adverse pregnancy issues, cardiovascular complications and diseases affecting children.  

In response to this, the bill would prohibit the promotion of a fossil fuel in a way that suggests they’re environmentally friendly or beneficial for Indigenous Peoples.   

The bill would also prohibit any promotion of a fossil fuel that suggests that its production or emissions are less harmful than other fossil fuels. 

Exempt from the ban, Angus says, would be anyone expressing their own opinions in a newspaper article, even if they are employed by an organization that lobbies for the petroleum industry. But fossil fuel companies would not be able to claim they are part of the solution to the climate crisis, as some now do, he says. “Some guy who wants to put on bumper stickers about how much he loves oil and gas, go for it. This is about corporate advertising.”  

For decades, the fossil fuel industry has notoriously engaged in campaigns of misinformation and misdirection to make false environmental claims. And oil companies have actively worked to stymie, muddle or dismiss science that pointed to catastrophic climate change linked to the burning of oil and gas, despite having full knowledge of the accuracy of those predictions. 

The idea for the bill came from the medical community. “You should not be able to say anything environmentally positive about industries that pollute so much,” says Leah Temper, with the Canadian Association of Physicians for the Environment (CAPE), which is among 35 health organizations that spearheaded a campaign two years ago urging the federal government to ban fossil fuel advertising.  

It’s not the first call for a ban. In 2022, France became the first European country to ban fossil fuel advertising. Various cities across Europe have taken similar steps. But in Canada, organizations such as the Competition Bureau or Ad Standards are too slow or opaque when called upon to investigate greenwashing complaints, Temper says.  

Getting the health alliance’s message out on fossil fuel ads has been an “uphill battle”, she noted. Several stories circulating online have suggested that the bill would criminalize any sort of speech in defense of fossil fuels, a claim that has been debunked.

Meanwhile, in an op-ed in the National Post, Stephen Buffalo, the head of the Indian Resource Council, an organization that represents oil and gas-producing First Nations, denounced the bill as the “most egregious attack on civil liberties in recent Canadian history” and “a direct assault on Indigenous peoples.”   

“Properly handled resource development is, for most of our communities, the only realistic way out of the current welfare trap,” said Buffalo. “We will not allow a small number of thought-control advocates to stop us from making decisions about our economic future.” 

But other First Nations leaders say Angus’ bill is necessary. In a statement, the Gitanyow Hereditary Chiefs called on the government to address ads that “create confusion and distort public opinion” about the environmental gains from using LNG (liquid natural gas) as a transition fuel.

“False ads pose a direct threat to climate progress, and we must have the ability to make informed decisions and mitigate climate impacts,” said Naxginkw, Tara Marsden, sustainability director for the Gitanyow Hereditary Chiefs.

Private member’s bills rarely get passed, but they do drum up awareness. 

Angus says his bill is an attempt to trigger a long overdue conversation. “Canada is a petro state,” he says. “If we can start talking about the decades of misrepresentation and lies by oil and gas, what they knew, what they covered up, like Big Tobacco, that changes how we see the issue and makes us recognize that we’re going to have to take a stronger position.”  

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Environmental, social and governance (ESG) reports outline the positive and negative effects of a company’s activities, and the steps they’re taking in response.

Companies publish these reports as their own documents. But often, externally hired consultants play an invisible role in gathering data and framing it in a positive narrative the public will find easy to digest.

And getting these reports independently evaluated – “external assurance” – is still not required by many regulators around the world. As a result, they can allow companies to “greenwash.”

This could be by only disclosing information that makes a company look “sustainable” to the public. Or by only reporting on categories that paint them in a good light, and excluding the less flattering ones.

The problems inherent in this process create a blind spot for society. We urgently need to shine a light on consultants’ unseen involvement in sustainability reporting.

The business of polishing ‘facts’

It’s increasingly becoming mandatory for large publicly traded companies to disclose their social and environmental performance, particularly across Europe and the Asia-Pacific region.

In Australia, such reporting is voluntary, but widespread. As many as 98% of top Australian companies published sustainability reports last year. Consulting firms have quickly expanded their existing lines of service to capture this growing market opportunity.

Consultancies legitimise their expertise by offering businesses a range of frameworks and discourses. These convey the benefits of implementing sustainability measures and show how they could boost profitability.

But use of the firms has attracted heavy criticism.

One argument is that consulting firms actually undermine their own sustainability services by continuing to do work for major companies in polluting industries, such as the oil and gas sector.

Another is that consulting firms’ contributions to sustainability are largely superficial. It’s too easy for companies to engage them just to tick boxes – perhaps to meet certain global standards or frameworks in bad faith, or create the impression they are responsible companies in other ways.

Problems with the process

Drawing on the lead author’s previous experience as a sustainability reporting professional in Indonesia, we wanted to take a closer look at these criticisms.

To examine the issue properly, we need to recognise that a power imbalance can arise between external consultants and the companies that hire them when sustainability reports are treated as an end in themselves or “time-bound projects”.

This attitude stands in stark contrast to the continuous strategy of measurement and disclosure that is required to create meaningful change at a company.

First, with such a narrow view of reporting, consultants are treated as simply a service provider – they are hired to complete a report within a given timeframe. But this limits their exposure to a company’s overall operations. Consultants have to rely on information passed on to them by employees, or they distribute oversimplified, generic forms for the organisation’s members to quickly fill in.

Getting these reports independently evaluated – ‘external assurance’ – is still not required by many regulators around the world. As a result, they can allow companies to ‘greenwash.’

Who they get to speak with to gather this information is also completely at the whim of their client. Under these constraints and tight deadlines, it’s difficult for them to perform meaningful data analysis.

Second, in practice, “reporting” often actually means “selecting which information shall and shall not be presented to the public”.

Using external consultants to prepare a report might seem like it would offer an unbiased or independent perspective. But the reports are heavily scrutinised by company management, who ultimately make the final decision about what to include.

And third, pressure to comply with certain regulations and standards can make companies shortsighted. Consultants are tasked with ensuring a company “ticks the box” and fulfils its reporting requirements. But if this is the primary incentive, the information presented can be superficial and lack context.

A deeper contextual analysis is necessary to describe what lies behind the raw numbers, including a company’s challenges, improvement targets and the path forward.

What needs to change to limit greenwash?

Consultants can still play a key role in the global move to ESG reporting. But the industry’s approach needs to change.

For one, sustainability reports cover a wide range of ESG topics – from climate to social inclusion. It is impossible for a single consultant to tackle all of them simultaneously. Companies should ensure there is a diverse range of experts in the teams they hire.

More countries could also pass laws requiring “external assurance” – independent, standardised cross checking of companies’ sustainability reports.

Meanwhile, companies and consultants need to return to the underlying principle of sustainability reporting: it’s not just about producing marketing material. Faced with a very real global crisis, it’s a key way to measure the impacts, risks and challenges of doing business, and present a company’s action plan to address them.

It’s important to be sceptical when the information in a sustainability report only shows good performance. Nobody is perfect. Neither is any business.

Hendri Yulius Wijaya is a PhD student in political science at the University of Melbourne.

Kate Macdonald is an associate professor of political science at the University of Melbourne.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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The online reaction was swift, with stats, charts, links and memes filling replies from all sides. While overwhelming scientific findings consider agriculture, particularly livestock farming, a significant source of planet-warming greenhouse gas emissions, conflicting measurements, marketing and misinformation have been making the facts more difficult to decipher. And it appears the meat industry has been capitalizing on all the confusion.

Ever since the UN’s Food and Agriculture Organization (FAO) first dropped a bombshell report on the “enormous” ecological impact of livestock farming back in 2006, the trillion-dollar global meat industry has been on the defensive. The report concluded that cars and coal plants weren’t the only ones spewing out planet-warming greenhouse gases: cattle-rearing was also a top contributor to the climate crisis. The backlash was intense, with FAO staffers recently revealing that pressure from Big Ag led to their work being censored and undermined. 

Two decades later, the meat and dairy industries have spent millions on counter-research and marketing, including creating an “MBA” for beef industry advocates. The world’s biggest meat-packers have announced net-zero targets, as the industry tries to reassure the public that despite the urgency of the climate emergency, there’s no need to cut back on our burgers and steaks. Even beef can be part of a balanced planet-friendly diet, they claim. 

In one of the latest attempts to quell consumer demand for more sustainable protein, Tyson Foods, America’s largest beef exporter, launched a “climate-friendly” product line, Brazen Beef, under the slogan “Better beef, better planet.” With the help of US$61 million in grants from the US Department of Agriculture, cattle are enrolled in Tyson Foods’ “Climate-Smart Beef Program,” according to the product website, “for emission reduction from pasture to production.” As Tyson’s VP of fresh meats marketing told Progressive Grocer magazine, “We are trying to be upbeat and different, with something that speaks definitively to [millennial and Gen Z consumers].”

And Tyson isn’t the only one banking on planet-friendly meat to keep consumers coming back to the butcher. Walmart Canada stocks 2.5 million pounds of beef patties certified by the Canadian Roundtable for Sustainable Beef. Nestlé is paying ranchers for regenerative grazing practices that get sold as carbon credits. General Mills makes a regenerative-beef protein bar that it claims offsets 80% of its greenhouse gas emissions through regenerating soil practices.”

The practice of branding meat as climate-friendly isn’t new. Many of Canadian meat giant Maple Leaf Foods’ products have carried a “carbon zero” label since 2019, when it declared itself to be the “world’s first major carbon neutral food company.” Its Greenfield Natural Meat pork products are cleverly marketed as part of a “low carb(on) diet,” including “planet-based” bacon.

But while these multinationals have made apparent efforts to reduce their environmental impact – from limiting deforestation in their tropical supply chains to retrofitting plants with LED lighting, and even restoring a few thousand acres of grasslands – there is no indication they have reduced production of the products at the heart of the climate quagmire. And as emissions from the world’s 20 largest publicly listed meat and dairy companies keep ticking upwards while global meat consumption swells, some major meat producers and retailers are playing with the metrics that measure them – and lobbying governments to help them make climate-friendly claims that have the appearance of adding up. 

Skewering the stats 

In the air-conditioned corridors of Dubai’s COP28 climate summit in December, a record-breaking number of meat and dairy delegates descended to soft-sell a new way of measuring their sector’s contribution to the climate crisis. The livestock industry is responsible for nearly a third of heat-trapping methane (the world’s second-biggest driver of climate change). To date, the UN and global governments have been measuring “global warming potential” (GWP) over a 100-year time frame using a metric called GWP100. Since methane breaks down in the atmosphere much sooner than carbon dioxide, which will warm the planet for centuries, an additional metric known as GWP* was proposed by Oxford University scientists in 2016 that factors in methane’s potent short-term impacts, taking 2016 methane emissions as baseline. With one caveat: it was never intended to be used as the sole way to measure animal emissions. But the meat and dairy industry is eating it up. 

“Imagine a house is on fire, and someone is actively pouring gas on the fire. They then pour a little less gas and want credit for doing so, despite still feeding the fire. Perhaps they claim they are now ‘fire neutral,’” writes University of California, Davis, researcher Caspar Donnison, co-author of a study published in Environmental Research Letters in December on the use of GWP* in climate-neutral livestock research. “That is more or less what some influential supporters of the livestock industry have done.”

A report by Changing Markets, a U.K.-based foundation, found that, using 2021 as the baseline, Tyson could “use GWP* to claim that a 30% reduction in emissions by 2030 means it is removing 82.6 million tonnes of carbon dioxide equivalent from the atmosphere a year, yet calculations using GWP100 suggest it would still be emitting 58.5 million tonnes annually – similar to the annual emissions of Peru.”

Nusa Urbancic, director of the Changing Markets Foundation, said that using 2021 as the baseline means “GWP* will penalise poor countries that are expanding livestock production from a low base while rewarding the world’s biggest industrial livestock producers with millions of heads of cattle.” 

In the case of Tyson’s Brazen Beef, the metrics have yet to be made public. How Tyson got to the claim of “the first climate friendly beef with 10% greenhouse gas reduction” – becoming the first meat company to use the USDA-backed climate-friendly label – remains unclear. “In order to claim a 10% reduction, you need to establish scientifically a baseline that everyone agrees is the common amount that beef produces,” New York University environmental scientist Matthew Hayek explains. “There doesn’t seem to be any data that the company itself, or the government who it created that certification in conjunction with, is able to provide.” 

Corporate Knights reached out to the USDA and Brazen’s certifier, Where Food Comes From, but reps directed us back to Brazen Beef to elaborate “if they choose.” Tyson Foods did not respond. 

Either way, Brazen has critics raising the question: should a burger that still generates 90% of the emissions of a regular burger be allowed to call itself climate-friendly? 

Regenerative reset

In the face of mounting pressure to get a handle on food systems’ enormous emissions, Big Ag, Big Food and Big Meat have all been leaning into climate-smart agriculture, aka regenerative agriculture or carbon farming, to save the day. Big Meat, in particular, has a hefty amount of emissions to draw down, and they’re hoping to sequester as much as they can into the soil, particularly the rich soil under ranch grasslands. Whether it’s Burger King investing in grassland projects or Maple Leaf, Nestlé and Brazil’s JBS (the world’s biggest meat-packer) buying carbon offsets from farmers that are paid to shift to regenerative practices, bucolic images of animals grazing in the open air are being used to lull conscious consumers into believing that buying meat can be beneficial for the planet.

But quantifying just how much carbon is drawn into the soil when every company uses different definitions of “regenerative” has been messy and the subject of heated debate, with some meat advocates claiming that grass-fed beef, in particular, has little to no effect on climate change. 

Then scientists in the Netherlands, the U.K. and Sweden began looking into it. In a mic-dropping study released in November, the researchers concluded that there is no plausible way for the global livestock industry to ever sequester enough carbon to offset its planet-warming emissions. In order to counter annual methane emissions from ruminants such as cattle, the authors explain, 135 gigatonnes (billion tonnes) of carbon would have to be returned to soils – a colossal challenge, equivalent to all the carbon lost as a result of agriculture over the last 12,000 years. Their conclusion: “The claim that ruminant systems can have a negative annual GHG balance via soil C-sequestration is overly optimistic and could be misleading.” 

Don’t have a cow offset

Grasslands aside, for most meat and dairy companies, claiming carbon neutrality and getting to net-zero is still largely a matter of basic omission. To call itself carbon neutral, including its Greenfield Natural Meat line, Maple Leaf (which does not sell beef) says it “eliminated, reduced and neutralized” its Scope 1, 2 and a portion of Scope 3 greenhouse gas emissions. The problem is that Scope 3 emissions (those from raw materials, feed and ingredients it buys and emissions associated with packaging and distribution) account for about 88% of Maple Leaf’s total emissions, according to the company. That includes emissions from animals and meat purchased from suppliers. “In 2023, we purchased carbon offset credits from 16 projects that neutralized approximately 7% of our Scope 3 emissions,” Maple Leaf spokespeople tell Corporate Knights – specifically for products that carry the “carbon zero” marketing label. As NYU’s Hayek points out, the Scope 3 emissions that Maple Leaf doesn’t include are “the largest slice of their supply chain.”

According to a report by the Freedom Food Alliance (FFA) released this winter, Maple Leaf isn’t alone. “Over 90% of most major meat and dairy companies’ emissions – representing Scope 3 third party supply chain emissions – are mostly omitted from their climate goals.” That includes those of meatpacking giant JBS, who, according to the report, “continues to make ‘net zero by 2040’ statements despite the National Advertising Review Board advising to discontinue this misleading claim,” along with marketing phrases like “Bacon, chicken wings and steak with net zero emissions. It’s possible.” In February, New York Attorney General Letitia James sued JBS, alleging that the company made deceptive statements in presentations, ads and on its website regarding its climate commitments. JBS denied the allegations.

The smoke and mirrors use of “net-zero” is just one of the tactics Big Meat uses to “deny, derail, delay, deflect and distract” meaningful discussion, as the FFA lays out. Meanwhile, the meat industry’s efforts have been focused not only on boosting their own products, but also on turning consumers away from plant-based meat alternatives. During the pandemic, brands like Beyond Meat and Impossible Foods surged in popularity. Touted as more sustainable and ethical, their sales soared. But by 2022 the narrative had shifted. Skepticism grew as critiques around the “ultra-processed” ingredients in plant-based options gained traction. 

Full-page ads were taken out in major newspapers by a PR company working for the meat industry, which also ran Super Bowl spots in select markets, all to turn people off foreign-sounding ingredients in “synthetic” meat. The tactics used to dissuade consumers from turning to alternatives worked to complement the meat industry’s move to market its products as climate-friendly. 

Rhetoric and marketing play a major role in the rebranding of meat as climate-friendly, explains Jason Hannan, editor of the book Meatsplaining: The Animal Agriculture Industry and the Rhetoric of Denial. “One of the most important contributions of environmental scientists and activists has been to introduce critical terms like ‘global warming,’ ‘climate change,’ ‘sustainability,’ ‘tipping points’ and ‘net-zero’ into our public vocabulary,” he says. “These terms have shaped how we assess governments and industries for their responsibility in our environmental and climate crises.” He notes that “carbon-neutral meat” has become a key term that the industry has appropriated to provide the veneer of environmental responsibility: “It’s like painting a gas station green and claiming it’s environmentally friendly.”

Over in Europe, lawmakers voted in January to outlaw the use of terms such as “climate neutral” for products that use carbon offsets, like, say, Maple Leaf’s bacon (which is not available in Europe). A few weeks later, the European Commission recommended ambitious new greenhouse gas emissions cuts. It had, however, quietly dropped a call for agriculture to curb non-CO2 emissions by at least 30%, compared to 2015, by 2040. All references to livestock farming, methane and a recommendation that Europeans eat less meat had also been taken off the table as a concession to protesting farmers. 

It’s another indication that the meat industry has turned climate change into red-meat politics.

Adria Vasil is the managing editor of Corporate Knights. 

Jessica Scott-Reid writes about animal welfare and plant-based food. 

This story is part of our Spring 2024 Plant Power package.

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