This stark warning was issued by the U.K.-based financial think tank Carbon Tracker in two new reports, Fading Fortunes and Petro-Provinces at Risk. The authors found that the fast pace of renewable-energy adoption worldwide and the high costs of oil-sands operations put domestic producers at “heightened financial risk.”

The reports come as Ottawa and Alberta embark on a new partnership to build a pipeline from Alberta’s tar sands to the British Columbia coast. On November 27, Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a memorandum of understanding (MOU) that will see the province accept a firmer industrial-carbon-pricing regime in exchange for federal support for the pipeline and some exemptions from federal greenhouse gas regulations. The MOU stipulates that the pipeline would be financed and constructed by the private sector and that Indigenous Peoples would be co-owners, though B.C. Coastal First Nations have already vowed it “will never happen.” 

Carbon Tracker modelled Canadian producers’ stated upstream investments against three potential scenarios: an accelerated energy transition consistent with the Paris Agreement, a moderate transition and a slow transition. In the most aggressive transition, “business as usual” investments of both new developments and new exploration would put up to 30% of Canadian oil and gas value at risk – about triple the size of any potential upside under the slowest transition scenario.

“We can’t predict exactly what the future will look like; we have an idea of a range of possible scenarios . . . and investors should be considering that range of realistic scenarios as part of their decision-making and risk-management,” says Olivia Bisel, an analyst with Carbon Tracker and the lead author of one of the reports. “A three-to-one ratio of risk to reward should stand out to investors,” she adds.

She points out that while her analysis found that more modest investments, including some new developments and limited exploration, led to a greater likelihood for producers to benefit in the moderate and slow transition scenarios, those gains were still minor compared to the significant risk if the energy transition happens quickly.

In almost all transition scenarios, Bisel says, Canadian producers are likely to fare worse than national oil companies like Saudi Aramco or Petrobras, and integrated oil companies like ExxonMobil and Chevron, which can produce more cheaply.

Layers of risk

Adam Scott, executive director at Shift Action for Pension Wealth and Planet Health, says there’s growing consensus among economists and other experts that there could be “broader market impacts to the stability of the financial system” if the financial sector doesn’t begin to price in the likelihood of declining oil and gas valuations. Shift advocates for pension funds to rapidly transition away from oil investments; not doing so, Scott says, could hit the retirement savings of millions of Canadians.

Bisel notes that 18% of Canada’s “Big Five” banks’ financing in 2024 went to oil and gas, two-thirds of which went to domestic producers. That kind of concentration could depress the amount of lending to other sectors of the economy if the transition unfolds more quickly than expected, she says.

Jobs, GDP (gross domestic product) growth and tax revenues are also at risk, Bisel says. The second Carbon Tracker report estimates that the energy transition could eliminate more than 80% of Canadian provincial governments’ expected revenue from upstream oil and gas in the 2030s.

Conflicting narratives

While oil and gas producers have allocated less of their free cash flow to new development in recent years, all Canadian producers shared guidance this year with plans to grow production (most of those guidances were specific to 2025).

The reports also come in a year when the country’s oil output has hit record highs and the trade war with the United States has made federal and provincial governments open to new pipelines and capacity-expansion projects.

“The market is saying very different things right now,” says Heather Exner-Pirot, senior fellow and director of natural resources, energy and environment at the Macdonald-Laurier Institute. The Carbon Tracker reports are expressing “a narrative [from] two years ago,” she says, but the mood is changing, and the energy transition now seems expected to be a slower one. “The market is looking to Canada for growth . . . because American shale is peaking, and there’s a demand for heavy [oil] that’s not being met.”

Scott, however, calls the report’s modelling “quite conservative” relative to others he’s seen. Despite an assumption among investors and others that the energy transition will be “incredibly slow or non-existent” if the world carries on with business as usual, “the economics of the transition have advanced so far that the transition is now self-reinforcing,” he says.

Renewable energy accounted for 90% of total power expansion globally in 2024, according to the International Renewable Energy Agency. The International Energy Agency also said in 2023 that oil and gas demand could peak by the end of the decade; BloombergNEF and oil giant BP estimated the peak even earlier, at 2029 and 2025, respectively.

Scott says that federal and provincial governments are “blindly and dangerously” looking to new energy production to steel the economy against the loss of a reliable trading partner. “A lot of the [energy transition] provides better opportunities for long-term growth and value creation at far lower risk.”

Kelsey Rolfe is a Toronto-based freelance business journalist with bylines in The Globe and Mail, Canadian Business, The Logic and the Financial Post, among others.

The post Canadian oil and gas investments are vulnerable to a fast energy transition, research finds appeared first on Corporate Knights.

The research by Abacus Data found that, assuming both were priorities, 67% of Canadians “would generally favour clean energy projects such as critical minerals, renewable power and transmission, and energy storage,” Clean Energy Canada explains. “The remaining 33% would prefer conventional fossil fuel projects like oil and gas, including [liquefied natural gas] development.”

Among the 2,585 Canadians who took part in an online panel between June 2 and 5, 87% said clean energy will be “very” or “pretty” important, and 83% said the same of fossil fuels. Some 45% said clean energy would be “very” important, compared to 36% for fossil fuels.

The research uncovered overwhelming support – a margin of 76% to 24% – for shifting Canadian climate policy to align more with Europe, rather than the United States. And “as Canadians face another summer of wildfires, support for continued climate action remains extremely strong, with only 14% of Canadians saying the federal government should do less to combat climate change and transition the country to clean energy,” Clean Energy Canada writes.

But while a large plurality of respondents, 44%, wanted Canada to do more on climate, 41% said governments are doing about the right amount. The European Union is currently far ahead of Canada in its efforts to drive down climate pollution and shift to renewable energy technologies, and analysts have pointed out that Canada would be by far the biggest per capita emitter in any new trade relationship with the EU.

The Abacus research also found that Canadians support building new homes with lower-carbon, sustainable materials by a margin of 64% to 15%, while 70% definitely or likely want to see EV hookups and heat pumps in new homes as long as the cost is minimal.

“It’s easy to wonder whether views on important issues have shifted as Trump, tariffs, and national security dominate headlines and the worried minds of Canadians,” Trevor Melanson, Clean Energy Canada’s director of communications, said in an online statement. “And yet the consensus on climate action and the transition to clean energy remains overwhelmingly positive. What’s more, as Canada forges stronger trade relationships with the likes of Europe and Asia, we may see a growing economic and values alignment with jurisdictions that are all-in on clean energy.”

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

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In his first act as prime minister in March, Carney sent a clear signal that he wants to move past the divisive debates on energy and climate change that prevailed under Justin Trudeau. Taking office just prior to the Paris climate summit, Trudeau enacted sweeping climate policy that included a carbon tax and a raft of regulations aimed at driving a clean energy transition – over the objections of the federal opposition and Conservative-led provinces.

Trudeau stepped down in January, and after winning the Liberal leadership race to replace him, Carney immediately axed the consumer portion of the carbon tax, which reduced gasoline prices by 17 cents per litre. The consumer levy had been a key pillar in Trudeau’s climate strategy. It was also a rich target for Conservative Party Leader Pierre Poilievre, who campaigned on support for the oil and gas sector with little heed for climate change policies.

Carney’s go-to campaign phrase on energy is, in fact, borrowed from former Conservative prime minister Stephen Harper, who vowed to make Canada an “energy superpower.” Carney has broadened that ambition to include renewable and other forms of clean energy. “It’s time to build Canada into an energy superpower in both clean and conventional energy,” he said in his election victory speech. “And it’s time to build an industrial strategy that makes Canada more competitive while fighting climate change.”

Carney’s concessions might not win converts

Carney won the Liberal Party’s fourth consecutive mandate despite winning few seats in Saskatchewan or Alberta, where Trudeau’s climate policies were anathema to many voters who saw them as an attack on their economic prosperity.

He proposes to establish “energy corridors” that would speed approvals of infrastructure like transmission lines and pipelines, he vows to streamline regulatory processes to avoid lengthy delays, and he supports carbon capture and storage technology, which the oil and gas industry is relying on to cut its greenhouse gas emissions.

During a campaign stop in Alberta, he said he would support the construction of an oil pipeline to eastern Canada to “displace imported oil.” Still, his conciliatory talk is unlikely to win converts from the oil and gas sector.

During the campaign, Alberta Premier Danielle Smith published a list of nine non-negotiable demands. They include scrapping the Liberal government’s planned emission cap on producers, establishing a six-month timeline for review of all projects, repealing the ban on oil tanker traffic off British Columbia’s more northerly coastline, ending the federal backstop for the industrial carbon price, and abandoning ambitious regulations to drive adoption of electric vehicles.

These demands are unworkable for Carney given that they would take key climate and environmental protections out of federal hands, and would alienate parts of the Liberal base, especially in Quebec, where support for climate action remains high.

Carney can ill afford to anger progressive voters, given his failure to secure a majority government and the prospect of an election within two years.

While his support for the oil and gas sector is not what the Alberta premier is demanding, it worries climate activists. Carney’s references to investing in conventional energy “leave a lot of uncertainty,” Caroline Brouillette, executive director of Climate Action Network Canada, said in a statement issued during the campaign. “If that’s a euphemism for continuing the status quo approach of expanding fossil fuels, that means pipelines going across Indigenous lands, many billions [of dollars] sunk into stranded assets, and climate harm caused by increased emissions,” she said.

Climate change mitigation is still in the cards

As he supports more pipeline capacity for oil and gas producers, Carney is also promising action to increase clean energy infrastructure, particularly interprovincial transmission ties that will help decarbonize and electrify the economy. He has also pledged support for the mining of critical minerals that are needed to enable a shift to a more electric energy system.

There are a number of areas where Carney can build on the work of his predecessor to advance Canada’s transition to a lower-carbon economy. He has promised to expand the charging network, drive energy efficiency in buildings and invest in the clean energy infrastructure. He could also reinvigorate a flagging effort to ensure that climate-related risks are accounted for and disclosed by corporations. As governor of the Bank of England, Carney led the international effort to develop disclosure standards, and encourage international corporations to adopt them. The standards, which are being adopted in Europe, require companies to develop strategies that are consistent with a future net-zero world.

In the past year or so, many companies, including Canada’s big banks, have retreated on commitments made at the United Nations climate summit in Glasgow in 2021.

The Canadian Securities Administrators – the umbrella group for provincial regulators – has halted their work that aimed to make climate disclosure mandatory for publicly traded companies. The U.S. Securities and Exchange Commission, which oversees the U.S. market, has also stopped work on climate disclosure, reflecting the Trump administration’s opposition to any regulatory efforts to combat climate change.

Given his pedigree as a central banker – and later adviser to the UN Secretary-General on climate finance – Carney could champion a global effort to embed the pricing of climate risks and opportunities in the international financial system.

Shawn McCarthy is an independent writer and senior counsel with Sussex Strategy Group.

The post Can Mark Carney fight climate change while supporting oil and gas? appeared first on Corporate Knights.

The Stand.earth Research Group (SRG) used customs records, corporate disclosures and investor reports to track U.S.-produced ethane through the supply chains of 107 major brands. Supporting the report is an interactive map that allows users to explore the connections between specific brands, their suppliers in the petrochemical sector and fracking companies.

“While conversations on alternatives to fracked oil and gas predominantly focus on end uses like heating or gasoline, the fashion industry is on track to become a major player in driving the expansion of fracking,” Dr. Devyani Singh, a researcher at Stand.earth, said in a statement.

The Permian Basin isn’t the only source of fracked gas, but Stand.earth made it the focus of their research because it is one of the world’s largest “carbon bombs,” or fossil fuel projects that, if fully exploited, would create more than one gigaton of carbon dioxide pollution. According to the non-profit research organization, nearly 28 gigatons of carbon dioxide could be released into the atmosphere if all the reserves in the Permian Basin were extracted and used.

Fracking takes an enormous toll on people and the environment, not only by contributing to the climate crisis, but also through air and water contamination, groundwater depletion, triggering seismic activity and violations of Indigenous rights.

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The petrochemical industry is set to outstrip transportation, aviation and shipping to become the primary driver of oil consumption around the world, as demand for plastic continues to surge. A 2018 report by the International Energy Agency found that “petrochemicals are set to account for over a third of the growth in oil demand to 2030, and nearly half to 2050.”

The oil and gas industry is looking for growth in petrochemicals to compensate for losses from the energy transition, and the fast fashion industry is powering that strategy – and solidifying its place as one of the world’s most polluting supply chains, responsible for between 4% and 8.6% of global greenhouse gas emissions. Manufacturers use ethane from fracked natural gas to make textiles and other consumer-facing products.

Of the 107 brands named in the report, 57 already have policies to phase out or eliminate virgin polyester, yet most of those are focusing on expanding their use of recycled polyester from plastic bottles – a strategy that nonetheless contributes to the oil and gas industry. Textile experts have challenged the sustainability of this solution because it diverts plastic bottles from functional closed-loop recycling systems and ultimately converts them into ever more textile waste.

Synthetic fibres are expected to account for 73% of global apparel production by 2030, according to the report, which calls on fashion brands to disclose their reliance on textiles derived from fracked gas. “The season of overproduction and sky-high climate emissions is made possible by harmful fracking and cheap petrochemicals, but it’s now time for brands to start a new tradition of sharing transparency into their supply chains, and giving a more sustainable future without fossil fuel fibres,” said Rachel Kitchin, a senior campaigner at Stand.earth.

The post New report reveals fashion industry’s reliance on fracked gas from Texas appeared first on Corporate Knights.

“As clean energy begins to challenge the dominance of oil and gas, what some industry barons and their allies fear most is being perceived – by investors, policy-makers, and the public – as entering a state of terminal decline,” independent journalist Jonathan Mingle writes in a guest essay for The New York Times. “If Kamala Harris wins the presidency, she could hasten the arrival of that moment by pursuing policies and regulations that would lead to lower consumption of oil and gas.”

But if Donald Trump prevails in the November 5 vote, “the industry is betting he will slam the brakes on the clean energy transition, prolong demand for oil and gas, and help maintain the primacy of fossil fuels for decades to come.”

If a Trump victory provides the opportunity, the industry will be ready, The Washington Post reports, citing internal documents produced by the 30-member American Exploration & Production Council (AXPC) and obtained by climate researchers at Fieldnotes.

“The lobbying blueprint takes particular aim at a new tax on emissions of methane, a gas that the International Energy Agency (IEA) says is responsible for nearly a third of human-caused global warming,” write journalists Evan Halper and Josh Dawsey for The Washington Post. “The policy plans, contained in documents distributed to a wide group of company executives at AXPC board meetings in April and August, also call for a repeal of more than a half-dozen executive orders that lie at the center of the Biden administration’s efforts to combat climate change.”

All in all, “the group’s goals amount to a monumental rollback of some of the most aggressive federal tools for cutting emissions,” along with measures “to unleash production and export of liquefied natural gas (LNG),” The Washington Post reports.

A ‘breathtakingly corrupt proposal’

AXPC says it will pursue the same policy agenda regardless of who wins the election. But “almost all the policies it targets for elimination and rewrite were enacted by the Biden administration,” Halper and Dawsey write. Trump, by contrast, “has called climate change a hoax and signaled a willingness to embrace the industry’s agenda by pledging favorable policies as he urged fossil fuel companies to donate heavily to his campaign.”

In The New York Times, Mingle has a rather more direct take on that extraordinary moment. “When Donald Trump invited about 20 prominent oil and gas executives to dine with him at Mar-a-Lago in April, he made a breathtakingly corrupt proposal: If they raised a billion dollars to help him retake the White House, he would roll back any policy they didn’t like when he took office,” Mingle recalls. “Several fossil fuel companies and their executives have since answered his call with brio, becoming among the top donors to the Trump campaign and Trump-aligned super PACs.”

At first glance, Mingle says, it isn’t clear why fossil companies would be so leery of a sitting government that allowed record domestic oil production over the last four years. “But if you take the long view, as these companies do, other policies of the Biden administration – which would probably be continued by a Harris administration – could pose a significant threat to their interests,” beginning with Biden’s late January pause on new LNG projects as an example. “The industry is wary of an administration that may make climate imperatives a permanent fixture in the public interest equation. That’s why reversing the pause was reportedly one of executives’ top requests of Mr. Trump at their Mar-a-Lago meeting. An attendee told the Washington Post that he promised to give it to them on his first day in office.”

Oil and gas interests are also pushing back on the International Energy Agency’s forecasts over the last year that global demand for all three fossil fuels will peak before the end of this decade, giving way to a new Age of Electricity. “Why such a fuss? Because when the energy data agency says the world’s appetite for oil and gas could soon enter a period of permanent decline, investors pay close attention. When the Dutch bank giant ING recently announced it would cease financing upstream development of new oil and gas fields immediately and liquefied natural gas export terminals after 2025, it pointed to IEA’s forecasts as justification.”

The ascent of renewables

While fossil companies join tech titan Elon Musk in trying to buy the election outcome they want, a new online dashboard published last week by the Environment America Research & Policy Center and California-based Frontier Group shows U.S. production of renewable electricity from solar, wind and geothermal tripling over the last decade.

“The growth of renewable energy in America has exceeded even the sunniest expectations,” Johanna Neumann, senior director the Policy Center’s Campaign for 100% Renewable Energy, said in a release. “When we replace fossil fuels with wind turbines and solar panels, and curb wasteful uses of energy, we build a world where the planet and people can thrive.”

The two organizations report:

• 15 U.S. states producing 30% or more of their electricity from renewables, up from only two in 2014, with Texas, California, Iowa, Oklahoma and Kansas (four Republican-voting states out of five) in the lead
• battery storage up 97-fold since 2014 and 72% since the end of 2022, at 15.5 gigawatts
• a 33-fold increase in solar in the southeastern U.S. over the last decade, delivering enough electricity to power 4.6 million average U.S. homes

“In 2024, with states like Texas, Oklahoma and Iowa leading the way, repowering America with clean energy is a fully nationwide project,” said Tony Dutzik, associate director and senior policy analyst at Frontier Group. “Solar panels, wind turbines, electric vehicles and battery storage are benefitting people in all 50 states, providing the building blocks of a clean energy system free from dirty fossil fuels.”

As demand falls, so do gas prices

The post The oil and gas lobby is spending big to help Trump’s campaign 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.

The post Canada’s new anti-greenwashing rules are not as bad as oil and gas industry says appeared first on Corporate Knights.

Let’s name the elephant in the room: Bay Street and Calgary are on a collision course on net-zero. Large Canadian banks, insurance companies and pensions have declared they will reach net-zero in financed emissions in their portfolios by 2050. Fearing loss of investment, Canada’s major oil and gas companies declared that they too are committed to net-zero. But, any rudimentary analysis shows that simply isn’t true.

The reaction of major Canadian oil and gas companies to new federal anti-greenwashing rules has been telling. They not only complained loudly, but took the unprecedented step of removing many of their corporate climate disclosures from their websites, unlike any other industry in the country subject to the same rules. They say that it’s the uncertainty of the standards that’s causing them to react this way, but it’s basic math that exposes their doublespeak.

The companies’ shorter-term climate targets have never added up to their reaching net-zero by 2050. They game the numbers, like Suncor failing to provide a baseline for its 2030 target so we don’t know what level it’s reducing from, or like Enbridge expressing its targets in “intensity” terms – emissions per unit of production – as opposed to absolute terms, so that they can continue to expand fossil fuel operations, thereby making the climate crisis worse.

The industry has proposed carbon capture and storage as the solution, but only if taxpayers foot the bill while it continues to make billions. Scaling the technology poses massive challenges and has underperformed nearly everywhere else in the world. And the kicker is that even if it works perfectly, it will address only a fraction of the emissions and not touch the much larger “downstream” emissions that show up in the net-zero accounting of financial institutions.

Over the past few years we’ve filed shareholder proposals at companies like Enbridge, Suncor and Cenovus to expose the risks that their failure to transition pose to investors in those companies, which includes most large Bay Street actors like RBC Global Asset Management and TD Asset Management, which act on behalf of millions of Canadians.

Nearly all of these major investors say that they are “engaging” with high-carbon investees in their portfolios in order to advance net-zero, setting this up as a binary choice against divestment. Some of them voted for our proposals, the bare minimum to live up to their commitments. Some didn’t, calling into question their seriousness.

But, with a few exceptions like BCI, we’ve yet to see any large Canadian investors take meaningful steps to themselves press oil and gas companies on net-zero. Some support Climate Engagement Canada, whose assessments show the industry to be off course, but there is little evidence they are acting on that information in ways that will remedy the situation.

Our U.K. colleagues have an expression for this style of weak engagement: they call it “tea and biscuits,” equivalent to having a nice quiet chat with the target company with no results. It’s contrasted with adopting an escalation strategy, where investors use their clout by going public with concerns, filing their own shareholder proposals, holding directors accountable and ultimately divesting if a company fails to transition. In this way, engagement and divestment are not binary choices but complementary steps along a continuum, designed to be effective.

Legal and General Investment Management (LGIM) is a good example of this more robust approach. With about CDN $2 trillion in assets under management, LGIM publishes its climate expectations for investees, follows up with letters and meetings, exercises its voting rights by both filing shareholder proposals and voting against directors, and ultimately puts recalcitrant companies in its divestment list.

This is the kind of approach we need from major Canadian investors like the asset management arms of our big banks, insurance companies (like Manulife and Sun Life) and the “Maple Eight” pensions. The more of them that do this, the more that heavy emitters in Canada will need to change course.

We decided that our oil and gas work was providing these investors with an excuse to not do their own. As long as “somebody else” was stepping up, they could stay on the sidelines. The result is that our oil and gas companies continue to go in the opposite direction to net-zero.

So we quit. Kind of. We’ll stop filing proposals with oil and gas companies but will continue to track whether investors are living up to their climate commitments, including their promises to transform their high-carbon investees. A secure economy, and a decent return on investment, depends on it.

Matt Price is executive director of Investors for Paris Compliance, a shareholder advocacy organization holding Canadian companies accountable to their net-zero commitments.

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In addition, the six Pathways member companies (CNRL, Cenovus, ConocoPhilips, Imperial, MEG, Suncor) deleted their corporate sustainability reports from their own websites, also apparently in response to provisions in the omnibus bill about a basic expectation that companies, of all shapes and forms, should be able to back up environmental claims with real evidence. This, despite the fact that these reports already referenced the types of internationally recognized standards and frameworks that the greenwashing legislation calls for, not to mention the fact that some of them are referenced in the companies’ regulatory filings – meaning they were already subject to securities regulators’ basic expectation of accuracy and completeness.

A month later and the sustainability reports are still nowhere to be found, but the Pathways website is back. And it is worth noting what has changed.

Where once there were claims about the companies working together to reduce their absolute emissions by 22 million tons (Mt) annually by 2030, and to net-zero by 2050, there is now a statement that Pathways is “focused on advancing environmental innovation and pursuing emissions efficiencies from our oil sands operations”. This indicates a renewed focus on emissions intensity – to reduce the amount of carbon per barrel of oil produced – rather than on the absolute emissions reductions that they had previously promised. In any case, even after many years of work in this area, only very modest gains in emissions intensity have been achieved – and oil sands’ absolute emissions have grown 142% since 2005.

What of their huge, world-leading carbon capture and storage (CCS) network, that they often stated they were working at pace to set up – and that would achieve around half of their 2030 22 Mt target? All that has been replaced by language indicating this proposed project is still at a relatively early negotiation stage: “We’re working with governments to ensure the appropriate fiscal support and regulatory approvals that will be necessary to make this project a reality.”

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It remains to be seen how and where Pathways will launch its next public advertising campaign, if it chooses to launch one at all. For now though, its slimmed-down website is, in our view, a more accurate depiction of the nature of the work that Pathways does, and the extent of its role as an organization. At Pembina, we have always supported the stated goals of the Pathways initiative, but have also tried to draw attention to the fact that Pathways never had the ability to act meaningfully on emissions reductions. It is not an oil sands operator hence it cannot file regulatory applications; it does not hold the “purse strings” nor have shareholders to steward to, hence cannot make final investment decisions. All Pathways could ever do is talk on behalf of the oil sands companies. As their new website shows, they don’t have much to say anymore – until, of course, some real action is taken to reduce oil sands emissions.

On that front, what has been missed in all the noise and furor of the last few weeks is the fact that Bill C-59 also contained the finalized provisions of the long-awaited federal investment tax credit on CCS projects. That is, of course, the very tax credit that Pathways and its members lobbied hard for and have spent the last couple of years saying was the missing piece of the puzzle they needed before they could reach final investment decisions on their projects. So, while less than a week after Bill C-59 was passed Shell announced their CCS project’s final investment decision, the Pathways Alliance and its member companies remained silent on theirs.

On the road to credible solutions for the sector, a very poor outcome would have been the industry taking this moment to withdraw from this conversation entirely. But given that we know Canadians and Albertans are interested in action – not just talk – on reducing emissions, we hope the new Pathways website won’t take up too much of the limelight. Public and government attention should instead be focused firmly on the real decision makers: the oil sands executives.

In a world that may soon be set to need much less oil, and with countries starting to make moves towards examining the carbon intensity of their energy imports, reducing emissions from our oil sands may shortly become an issue of market access, with clearly big implications for Alberta’s future economy. The stakes, in other words, could not be higher. Bill C-59 answered the executives’ questions on government support for their foundational carbon capture projects; they now have the information they have been asking for to move to final investment decisions. It’s time now for the member companies to let their actions do the talking.

MC Bouchard is the Pembina Institute’s oil and gas program director.

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