As companies work to go green, they are increasingly being called out by dissatisfied environmental groups and thus are becoming more tight-lipped about their climate pledges.
Analysis points to growing doubts over ESG (environmental, social, and governance) factors and their efficacy in allocating capital, but also concern about the purpose of activists and the legitimacy of their claims.
RBC, Canada’s largest bank, is under investigation by the federal Competition Bureau for its stated climate action commitments. It’s also being taken to task for “greenwashing,” for continuing to finance fossil fuel development such as pipeline projects, a complaint brought forward by six applicants supported by Ecojustice, Canada’s largest environmental law charity, and Stand.Earth, an environmental advocacy organization.
“I can confirm that the Bureau has launched an investigation under the Competition Act into the Royal Bank of Canada’s alleged deceptive marketing practices after receiving an application under section 9. There is no finding of wrongdoing [at this time],” Marie-Christine Vézina, senior communications adviser with the Competition Bureau, told The Epoch Times.
RBC has been touting its ESG commitment and strongly disagreed with the allegations. CEO Dave McKay has nixed calls for actual divesting from the oil and gas sector. RBC did not respond to an inquiry from The Epoch Times.
“The impression you get is that it’s basically impossible to satisfy them [environmental activists], because even if the Royal Bank stopped lending to the oil and gas sector, maybe it lends to automotive parts manufacturers, or maybe some of the executives of the bank drive their car to work. How do you get to that perfect state of grace?” Wilfrid Laurier University professor and financial economist William McNally told The Epoch Times.
“It goes back to what is the true motive of the activists?”
Questioning the Allegations
Ecojustice said in an Oct. 11 press release, “This complaint is part of a wave of legal actions around the world to challenge companies making bold climate claims not backed by credible actions.”
Furthermore, Oxfam Canada published a report on Oct. 18 on the carbon footprint of Canada’s major banks and said that it wanted to see an end to the financing of “polluting projects.”
“None of the eight major banks have committed to withdrawing from the fossil fuel sector in the short or medium term. Even more worrying is the fact that they all present themselves as having sustainable finance projects or ‘green’ investment activities,” Oxfam said.
McNally says that companies find it irresistible to use ESG as a marketing tool but that the claims against RBC’s oil and gas financing are short-sighted.
“Is RBC supposed to just stop all oil and gas gas financing tomorrow? Is that good for Canada?” he said.
“They [environmental activists] don’t admit that there might be a trade-off between their demands and what’s good for Canada.”
