This article was written by Gloria Dickie and was published by the Weather Network on July 24, 2024.
This opinion was written by Janis Sarra, professor of law emerita at Peter A. Allard School of Law at the University of British Columbia, and was published in the Globe & Mail on July 22, 2024.
We have been hearing much criticism of two amendments to the Competition Act on deceptive marketing practices regarding climate-related claims that received royal assent on June 20. Reactions include oil sands companies removing their environmental performance claims from their websites and the Alberta government threatening to “use every legal option” to push back against the legislation.
These moves mask the reality that companies have been getting away with bold unsubstantiated climate-related claims and now they need to withdraw them or temper them to be realistic.
The purpose of the Competition Act is to encourage competition in Canada to promote the efficiency and adaptability of the Canadian economy. And part of healthy competition is that companies accurately represent their products and services to consumers. The two new provisions augment existing protection of consumers from deceptive market practices.
Under the first provision, the Competition Bureau, as the independent law enforcement agency, can review a company’s conduct to investigate its public-facing claims. The bureau can investigate a company if it represents to the public (directly or indirectly) a product’s benefits as protecting the environment or mitigating the environmental, social and ecological causes or effects of climate change.
Critics have cried foul over this provision, saying it overly polices their marketing claims. But companies have an easy defence built into the statute – that they have adequately tested their claims.
Is that so hard? If companies find that burdensome, what does it say about them – that they had previously made claims without any verification, and want to continue doing so? The second new provision limits how a company can make a representation to the public with respect to the benefits of a business activity for protecting or restoring the environment or mitigating the environmental and ecological causes or effects of climate change. A company cannot do so for a claim that is not based on adequate and proper substantiation in accordance with internationally recognized methodology. Here, again, an easy defence exists. The defence is new, but creates a lot of protection as a company need only demonstrate that it relied on any internationally recognized methodology in making a claim.
Companies are using the amendments as an excuse to back away from existing unsubstantiated claims and reset their claims to be accurate, which is a good thing. While companies are spending a small fortune on new disclaimer clauses, qualifying climate-related claims is good business practice. Disclaimers, such as that the claims are based on best available science, make sense as climate science is continuing to evolve. What is key here is that consumers need protection from the plethora of claims regarding environmental performance so they are able to make informed decisions in their purchases.
What also seems lost in the frenzied concern that companies will stop making claims that they will reach net-zero carbon emissions is that all publicly traded companies already need to report material climate-related and other environmental risks and how they are managing them.
The Competition Act amendments give protections to consumers that investors already have under securities law and also creates a baseline of accountability in respect of the environmental claims made by both private and public companies.
The Competition Bureau, as it always does, will issue guidance to companies on the new provisions and is consulting with Canadians as it develops this guidance. It is in all our interests to have companies base their environmental claims on real data and accepted methodologies, including international sustainability accounting standards.
The amendments will help advance Canada’s goal of financial sustainability, and by requiring claims to be accurate, will ensure that the markets for green and net-zero products operate to incentivize production that actually generates these effects.
This editorial was written and published by the Globe & Mail on July 22, 2024.
Three years ago, when the Pacific Northwest suffered under a deadly heat dome, scientists quickly determined the central role played by climate change in one of the worst natural disasters in Canada’s history – one that killed 619 people in British Columbia.
The conclusion was unequivocal. Scientists at World Weather Attribution said the intensity of the heat dome – temperatures peaked at almost 50 degrees Celsius in B.C. – was “virtually impossible without human-caused climate change.”
This work is what’s called rapid attribution analysis – and its goal is to help the public and political leaders better understand the lashings of climate change when its effects are clear yet also difficult to discern. Detailing and highlighting climate change’s role in the increasing litany of extreme weather is essential.
This is especially true as some political leaders, such as Alberta Premier Danielle Smith, attempt to deny it by promoting fossil fuels, undermining clean power and attacking “climate alarmism.” In B.C., Conservative Leader John Rustad, running close in the polls with the governing NDP ahead of a fall election, insisted during a recent interview with The Globe’s editorial board that it was “false” that humans burning fossil fuels is the cause of climate change. “It doesn’t matter how much we try to reduce carbon,” Mr. Rustad claimed, “it is not going to change the weather.”
These are varying degrees of climate science denial in the mainstream of Canadian politics and all of it ignores factual reality, starting with the mountains of evidence produced by the United Nations Intergovernmental Panel on Climate Change.
Climate change is no longer some theoretical future. It is today’s reality. Canada is one year removed from catastrophic forest fires that burned the equivalent of one-quarter of Manitoba to the ground. Globally, over the past year, every single month has registered at 1.5 C or higher than preindustrial times, the mark at which the world aims to limit heating under the Paris Agreement. Last November, there were two days at 2 C higher than preindustrial times. This should be a five-alarm call to action.
Environment Canada recently debuted its pilot project of rapid attribution analysis. It looked at the heat wave in June this year in Ontario, Quebec and Atlantic Canada that saw peak temperatures as much as 10.7 C above average. Environment Canada, using a scale that includes a measure of uncertainty, concluded that the heat wave was “much more likely” to have happened because of climate change, a range between two times and 10 times more likely.
All countries must take greater action. In recent months, there has been a groundswell of support to push military spending in Canada to the promised 2 per cent of GDP. Canada needs the same widespread conviction behind climate action. The climate-policy push has to be more than the Liberals in Ottawa. Too many provinces, save for the likes of B.C., aren’t doing enough. And the federal Conservatives, like the B.C. Conservatives, appear skeptical about climate action, with limited proposals that are in part centred on increased exports of methane gas.
Greenhouse gas emissions in Canada are down 7 per cent as of 2022, the latest official figures, from 2005. Canada’s initial Paris Agreement pledge was a 30-per-cent cut. Where did that number come from? Stephen Harper. It was then maintained by Justin Trudeau’s Liberals; in 2021, as part of the Paris Agreement’s call for escalating action, the goal was increased to 40 per cent. By Dec. 1 of this year, Ottawa is legally bound to deliver a 2035 target under the Canadian Net-Zero Emissions Accountability Act.
While reasonable progress has been made, there’s a long way to go to 40 per cent, never mind a new, more ambitious target. Pending policies such as Ottawa’s clean electricity regulations must be amended and finalized, and embraced across the country. Provinces need to work together and connect their power grids, instead of acting like insular fiefdoms.
In 2018, the UN warned, “Limiting global warming to 1.5 C would require rapid, far-reaching and unprecedented changes in all aspects of society.” Work to show how extreme weather is exacerbated by climate change is key to underscoring the urgent need for change. And most of all, remarkable advances in technology – starting with solar power and batteries – make such change possible and realistic.
This article was written by Conor Chell and was published in the Toronto Star on July 20, 2024.
CONOR CHELL IS A LAWYER, PARTNER AND THE NATIONAL LEADER OF ESG LEGAL RISK AND DISCLOSURE FOR
Whether by act or by omission, greenwashing will not be tolerated in Canada.
A new era in environmental, social and governance (ESG) disclosure and regulation is upon us.
With the federal Competition Act (Bill C-59) passing into law, Canadian organizations will now be required to back up their environmental and social claims about products or services with “adequate and proper tests.” Similarly, they must substantiate any claim they make about their business protecting or restoring the environment or mitigating the environmental and ecological causes or effects of climate change (i.e., netzero or carbon-neutral claims) with an “internationally recognized methodology.”
Those that cannot back up their claims will face stiff penalties. Individuals can be fined up to $750,000 for a first offence and up to $1 million for subsequent orders. Penalties to organizations can be up to $10 million, or an amount three times the value of the benefit derived from the claim, or three per cent of the organization’s global annual gross revenue, whichever is greater. For each subsequent order, the penalty jumps to $15 million.
Greenwashing — making exaggerated, inaccurate or misleading statements about an organization’s environmental or social impact — is not a new phenomenon. But, it’s become much more prevalent and problematic in recent years as the demand for ESG information and the scrutiny of stakeholders have grown. Greenwashing can damage an organization’s reputation, erode trust with customers and investors, and now, expose it to legal liabilities and sanctions.
Once broken, integrity and trust are difficult to repair, and can harm an organization’s ability to access future capital.
According to the UN Environment Programme and New York’s Columbia University, the number of climate-related lawsuits has more than doubled since 2017 with nearly 2,500 climate-related lawsuits filed globally. That number is expected to rise significantly in the coming years as ESG-related reporting becomes mandatory and anti-greenwashing laws are enacted around the world and here in Canada.
With increasing legal risk, it is important for organizations to ensure they can support the claims they’re making.
Our understanding is that over the coming months, the Canadian government will update its guidance to provide clarity as to when action will be taken under the new provisions of Bill C-59. We also expect the Competition Bureau to review and update its enforcement guidance to ensure transparency for the business and legal communities.
Bill C-59 is not the only law to worry about.
Greenwashing is currently regulated by other various federal and provincial laws and agencies that, depending on the requirements, ultimately obligate organizations to disclose material information related to ESG factors, including climate change risks, carbon emissions, diversity and inclusion, human rights and corporate governance.
Proposed new legislation aims to address gaps and inconsistencies in ESG definitions, standards and disclosure requirements, such as the federal Bill C-372, known as the Fossil Fuel Advertising Act, and Bill S-243, or the Climate-Aligned Finance Act.
The impacts from Bill S-243 alone will reverberate throughout the economy as financial institutions seek to cascade their needs for climate data and improvement down to their vendors and customers.
Given that many organizations will be directly or indirectly impacted by incoming mandatory ESG reporting requirements and by one or more of the incoming anti-greenwashing pieces of legislation, legal risk, and the potential for liability for organizations, organization leaders and boards of directors is sharply increasing.
The only choice organizations have today is to back up, revise or overhaul their public commitments and communications.
Organizations will be held accountable on how clearly they measure, verify, and communicate ESG performance and impacts. Even historical ESG reports — based on voluntary, not mandated disclosures — could potentially be classified as greenwashing, and need to be looked at against these new regulations.
There are ways organizations can mitigate legal risks.
They will need to assess their ESG disclosures from a legal risk perspective. This includes ensuring that their ESG data, information, targets and goals are credible and verified. ESG targets, goals and ambitions will need to be proven as technically, financially and operationally feasible.
Organizations also need to identify where they’ve made ESG disclosures or talked about ESG publicly, ranging from websites, investor decks, media interviews and social media to the less obvious like responses to request for proposals.
They will need to close any gaps in their compliance programs and ensure their internal and external processes and controls can withstand the expected additional legal scrutiny public ESG disclosures will undoubtedly attract.
Taking these steps will help organizations to be duly diligent and protect themselves from charges of greenwashing.
Leaders will emerge not only based on the sustainability claims they make, but rather on their ability to back them up, anticipate concerns, and withstand new waves of scrutiny.
The organizations that can communicate their ESG commitments with confidence and integrity will be well-positioned to navigate this new reality.
This article was written by Marco Chown Oved and was published in the Toronto Star on July 20, 2024.
Cynics often say we can’t rely on renewable energy because the sun doesn’t always shine and the wind doesn’t always blow.
But when the rain falls really hard — like it did this week — wind turbines and solar panels could be the key to keeping the lights on, green energy experts say.
“People often think about renewables as a solution to reducing the emissions that drive climate change,” said Mabel Fulford, director of innovation partnerships at Peak Power, a Toronto cleantech company. “But they also help us weather the storms that climate change brings.”
After Hurricane Sandy hit New York City in 2012 — putting 8 million people out of power — the state embarked on a grid renewal project that involved installing rooftop solar and batteries that can keep operating even during a blackout.
“When you invest in renewables and storage, you’re investing in resiliency,” said Fernando Melo, federal director of the Canadian Renewable Energy Association.
“You can have a large transmission line or a localized substation go down, but if you have a renewable generation coming in, you’re adding new power at different points in the system that can then be dispatched.”
During Tuesday’s storm, Hydro One tweeted out a picture of a west end transformer station that looked like it had been built in a swimming pool. Even with all the other transformers operational, this one failure put more than 100,000 people out of power.
Failures at these crucial nodes in the grid show the weakness of a traditional power grid, said Fulford.
“The traditional grid has this small number of very centralized generation assets. So usually what that means is that where the power is being produced is very far away from where the power is actually needed for use. And it also means that there’s more dependency on these big transmission corridors,” she said.
“The more distributed resources are on a grid, that usually means the generation is a lot closer to where it’s being used. So you get a lot more local resiliency and you get the ability to have certain areas of the grid support themselves.”
These “microgrids,” which typically involve solar or wind and batteries, can keep the power on at an industrial site or a university campus; they even work on an individual household level.
People who have solar panels and batteries (or electric vehicles that contain large batteries) can power their homes during extended blackouts.
“I have a friend outside Ottawa. When the power went out a couple of weeks ago, he had people over to just make morning coffee because he was running his house off of his Ioniq 5,” said Melo.
Renewable energy is often touted as being inexpensive and causing zero emissions, helping us expand our power system to prepare for an energy transition away from fossil fuels. But its ability to add resilience is yet another reason to build more renewables, as Canada lags the rest of the world in a drive to triple renewable power by 2030.
“Storage and renewables have huge value as we think about these extreme weather events,” said Fulford.
Not only do they help address the broader challenge of the climate crisis by reducing the emissions that drive climate change, she said, they also help our grid become more resilient and reliable during the extreme weather events that are predicted to become more frequent and more severe.
“They help us weather the storm, and they help us slow down the trajectory of more and more storms in the future.”
This article was written by Inayat Singh and was published by CBC News on July 8, 2024.
This article was written and published by the United Nations on July 8, 2024.
This article was written by Toby Heaps and was published in the Toronto Star on June 29, 2024.
TOBY HEAPS IS THE CO-FOUNDER AND CEO OF CORPORATE KNIGHTS, A MEDIA AND RESEARCH COMPANY BASED IN TORONTO FOCUSED ON ADVANCING A SUSTAINABLE ECONOMY.
There’s no question that many major Canadian companies are applying vision and innovation, and making impressive progress toward circular business models, decarbonization and greater social equity.
That’s the encouraging takeaway from Corporate Knights’s comprehensive annual assessment of corporate citizenship on the part of all Canadian companies with $1 billion or more in annual revenues.
But having done this analysis for nearly 25 years, I increasingly focus not just on the achievements of the top ranked Best 50 companies, but also on what our analysis reveals about the comparative scope and pace of progress economywide. That’s the sobering part of the exercise.
But let’s start on the positive side of the ledger.
Looking at the 2024 50 Best Corporate Citizens ranking, I’m encouraged first by diversity. Three distinct sectors and business models are represented at the top of the ranking via first-place Société de transport de Montréal, followed by Stantec Inc. and the Co-operators in second and third spots. Good corporate citizenship is clearly not a niche phenomenon.
More fundamentally, I’m encouraged by the growth in investments and revenues that align with credible definitions of sustainability. We weigh these metrics heavily in our ranking given their outsized importance as drivers of economic transformation and long-term corporate success.
Within the full universe of Canadian companies assessed, total sustainable investments stood at $41.3 billion in 2022 and sustainable revenues at $155.1 billion. That’s up an impressive 82 per cent and 77 per cent respectively from 2019. In contrast, growth in nonsustainable investment was only four per cent in that same sample and time frame, and growth in nonsustainable revenues only 20 per cent.
So money is flowing in the right directions, and driving improvement on key metrics such as carbon.
Average carbon productivity among large Canadian companies — that is, the revenues earned per tonne of carbon emitted — jumped from $700,000 to $1 million between 2019 and 2022 (and averages $1.6 million among the Best 50 companies). Underlying that is an eight per cent reduction in absolute carbon emissions on the part of all companies assessed.
This year’s ranking even provides some reason for optimism on key and often troubling social performance metrics. True, increases in CEO pay continue to far outstrip increases in average worker pay. But cash taxes paid are now trending up faster than corporate profits, and current trends suggest that both gender and racial parity on boards are in sight in the next decade.
So that’s all to the good. But with threats such as blowing past the 1.5-degree temperature-increase threshold bearing down on us, it’s not good enough to only ask: Are we making progress? We also need to know if we’re progressing fast enough — and in many respects we are clearly not.
The $41.3 billion in sustainable private-sector investment is a lot, but combined analysis from our federal government and from the Glasgow Financial Alliance for Net Zero indicates that as of this year, we need to be hitting a level of $98 billion and sustaining it through the decade.
Similarly, an eight per cent reduction in absolute carbon emissions over four years is probably most accurately thought of as a good start, given that the UN Environment Programme has indicated we need to hit about that same level of reduction — 7.6 per cent — on an annual basis through the decade.
So does the bad news eclipse the good? Not entirely, but my net takeaway is that we must insist on a broader scope and faster pace of delivery on the promise of good corporate citizenship. Fortunately, we have means available of doing just that.
Clean Economy Investment Tax Credits (ITC), for example, have been proven in the U.S. and elsewhere to be able to generate large-scale private investment in sustainable activities and revenue opportunities. They can be game-changers in Canada too, but we’re taking too long to implement them, with only two of six promised ITCs passed with detailed guidance by the Canada Revenue Agency.
Our analysis further suggests that even many of those companies who are stepping up would benefit from working within better defined frameworks — ones designed to help maximize the impact of every dollar directed toward a sustainable use. Even among this year’s Best 50 companies for example, only half have formal net-zero plans meeting criteria set by the Science-Based Targets Initiative or something similar (a figure that drops to 14 per cent among the full universe of companies).
If you don’t know where you’re going, any road will get you there, but we don’t have the luxury of meandering. We know where our decarbonization and other essential journeys need to lead to, and we know we need to get there quickly.
So it’s urgent that we pick up the pace and get on track, and ensure that today’s leading corporate actions become tomorrow’s norm.
We must insist on a broader scope and faster pace of delivery on the promise of good corporate citizenship
This article was written by Mark Ramzy and was published in the Toronto Star on June 28, 2024.
A new set of federal rules meant to crack down on misleading environmental claims is setting off a clash between climate advocates and fossil fuel groups.
To some, it’s a “watershed” moment for corporate accountability over the climate crisis. To others, it’s an overreach that will “silence” an energy industry that claims it’s cleaning up its act.
At issue are incoming changes to Canada’s competition law that can penalize businesses that don’t provide evidence for claims they make about the environmental impact of any products or business practices — an attempt to deter a rise in what’s been dubbed “greenwashing.”
But what do these new rules actually do? Here’s what you need to know.
Current law too ambiguous
Existing laws on deceptive marketing have given the Competition Bureau the power to tackle unsupported environmental claims about specific products or services. That has resulted in penalties against three companies since 2016: Keurig over coffee pod recycling claims and Volkswagen and Audi over claims about their diesel engines’ emissions.
But as concerns about the climate crisis drive demand for “green” products, complaints about misleading environmental claims are also increasing. However, there was no law specific to cracking down on dubious environmental claims and critics warned existing rules didn’t have enough teeth to tackle the issue.
Those critics included commissioner of competition Matthew Boswell. After the Trudeau government introduced in a wide-ranging omnibus bill new rules that would focus on environmental claims about specific products, Boswell pushed for a broader mandate that would also tackle “forward-looking environmental claims about a business or brand as a whole,” like claims to be “net-zero” or “carbon neutral by 2030.”
“Under the old law, there was a substantial amount of ambiguity whether the law would touch claims about not just a product or service, but, you know, a business or business activities in general,” said Keldon Bester, the executive director of the Canadian Anti-Monopoly Project.
In the last stages of passing the bill, parliamentarians made changes to strengthen the new rules, so that environmental claims about business activities must be “based on adequate and proper substantiation in accordance with internationally recognized methodology.”
Cue the outrage.
Oil and gas groups worry
Several fossil fuel industry groups immediately raised alarm over the new changes, arguing the burden of proof was too vague and could be abused. Pathways Alliance, a consortium of the largest oilsands companies in Canada, wiped its entire website, calling for clarity from the Competition Bureau. The Canadian Association of Petroleum Producers said it was a “radical” change that “effectively muzzles Canadian businesses,” claims echoed by Danielle Smith’s Alberta government.
“Creating a public disclosure standard that is so vague as to lack meaning and that relies on undefined ‘internationally recognized methodology’ opens the door for frivolous litigation, particularly by private entities who will now be empowered to directly enforce this new provision of the Competition Act,” said a statement from Pathways Alliance. “This represents a serious threat to freedom of communication.”
Neither group accepted an interview request.
The oil and gas groups, which are under heavy scrutiny for their role in driving the climate crisis, insisted they would not back down on their environmental commitments, but other groups made the argument the changes could deter investment in clean energy from companies afraid they wouldn’t be able to communicate their business practices. In 2022, the oil and gas sector was Canada’s largest source of emissions, accounting for 31 per cent of total national emissions.
Environmental advocates, meanwhile, claimed the negative reaction from the oil and gas groups was evidence they knew their claims to take climate change seriously were “bogus.”
“It doesn’t shut down production, or hold them accountable for oil leaks, or tell them their emissions are too high,” said New Democrat MP Charlie Angus, who has proposed even stricter rules to ban fossil fuel advertising.
Experts in competition law say the bureau needs to give guidance to businesses as to how they will be impacted by the new rules. In the meantime, businesses have the right to be concerned, said Robin Spillette, a lawyer at Fasken.
“There’s a lot of new words in here, and it’s just I think, right now, not clear to companies what exactly this is going to capture and what they need to do to ensure they’re onside these provisions,” Spillette said.
A spokesperson for Industry Minister François-Philippe Champagne said the government understands those concerns. The Competition Bureau, in response, is “assessing the impact of these requirements and expects to provide guidance, in due course, that will offer transparency and predictability for the business and the legal communities in the enforcement of the law,” it said.
More frequent enforcement
Spillette said part of what needs to be clarified is to what standards businesses’ environmental claims will have to adhere.
“It could be hard for a business to say, you know, what’s internationally accepted today or what is not, and then what might change tomorrow,” she said.
But the biggest impact of the changes, she said, will be more frequent enforcement. The Competition Vureau is currently investigating at least four claims of “greenwashing” against Pathways Alliance, the Canadian Gas Association, RBC and Lululemon.
Punishments for non-compliance can include being forced to stop the marketing in question, publishing a notice and significant financial penalties.
Bester said the bureau should also present examples in its guidance of the kinds of claims it is hoping to crack down on.
This article was written by James MacCarthy, Alexandra Tyukavina, Mikaela Weisse, and Nancy Harris, and was published by the World Resources Institute on June 27, 2024.
Mobilize, Canada! 