Oil and gas industry making risky play in response to greenwashing law: experts

The Canadian Press

Experts in communications and greenwashing say the oil and gas industry is making a risky play in so fully scrubbing environmental claims from their websites and social media in response to a new law. 

The Pathways Alliance group of oilsands companies has removed all content from its platforms while other companies have modified their websites after new greenwashing amendments were passed as part of an update to the Competition Act.

The chief executives of the six oilsands companies behind Pathways put out a statement late Thursday that said the law, which requires companies to back up their environmental claims with evidence, represents a serious threat to freedom of communications. 

Sarbjit Kaur, co-founder of KPW Communications, says the industry strategy is very risky because it could be perceived that their environmental claims are unfounded, or they don't respect the legislation.

Wren Montgomery, associate professor of sustainability at Western University's Ivey Business School who studies greenwashing, says Canadians are savvy and really dislike hypocrisy.

She says the standards in the law are reasonable, and the industry's removal of so many claims in response to it will likely leave many thinking they weren't backed by evidence. 

This report by The Canadian Press was first published June 21, 2024.

Pathways Alliance oilsands group removes all website, social media content

Amanda Stephenson, The Canadian Press\

The Pathways Alliance group of oilsands companies has removed all content from its website and social media feeds, citing uncertainty over a new anti-greenwashing rule poised to become federal law, while a major oil and gas industry group has also modified its website.

The Pathways Alliance is a consortium of Canada's six largest oilsands companies, which together have publicly committed to reaching net-zero greenhouse gas emissions from oilsands production by 2050.

The consortium has previously spent millions of dollars on a countrywide public relations blitz aimed at demonstrating that the oilsands is committed to helping fight climate change.

But as of Thursday, all that remains on the group's website is a notice saying Pathways has removed its content due to concerns around an anti-greenwashing provision in federal Bill C-59.

"Imminent amendments to the Competition Act will create significant uncertainty for Canadian companies that want to communicate publicly about the work they are doing to improve their environmental performance," the Pathways statement reads.

"With uncertainty on how the new law will be interpreted and applied, any clarity the Competition Bureau can provide through specific guidance may help direct our communications approach in the future."

The group — which has not yet responded to an interview request — added it remains committed to the work it is doing to reduce the environmental impacts of oilsands production.

The Canadian Association of Petroleum Producers also said Thursday it has "chosen to reduce the amount of information available on its website and other digital platforms."

The omnibus bill C-59, which passed third reading in the Senate Wednesday and will soon become law, contains a truth-in-advertising amendment that would require corporations to provide evidence to support their environmental claims.

The provision is not fossil fuel-specific, but applies to all businesses and economic sectors. The bill's wording says businesses must not make claims to the public about what they are doing to protect the environment or mitigate the effects of climate change unless those claims are based on "adequate and proper substantiation in accordance with internationally recognized methodology."

The passage of the provision is a win for Canadian environmental groups, who have been mounting a full-fledged campaign against "greenwashing" — a term given to the perceived tendency by companies to market their products and practices as more sustainable than they really are.

In the last year, Canadian green groups have lodged at least four formal complaints with the federal Competition Bureau alleging greenwashing or false environmental claims by fossil fuel companies or banks.

The Pathways Alliance was the target of one of those complaints. Environmental groups have said the consortium's ads and public claims about net-zero are misleading, as the Pathways Alliance has not yet made a final investment decision on its proposed $16.5-billion carbon capture and storage network.

Leah Temper, program director with the Canadian Association of Physicians for the Environment, said Thursday she was "thrilled and surprised" to see the oilsands industry react so strongly to the passage of C-59.

"This is basically a very modest provision in the Competition Act. It simply requires companies to tell the truth and to have an evidence base to back up their claims," Temper said.

"So I do think this reaction is very telling."

In a statement, the Canadian Association of Petroleum Producers said the anti-greenwashing provision will have the effect of silencing the energy industry and curtailing the ability of Canadians to participate in debates around climate and environmental policy.

"The burden of proof provision included in the amendments means those making the complaint face no risk or accountability. Rather, the burden falls entirely on companies," said CAPP president and CEO Lisa Baiton.

"Businesses across Canada are being put at significant risk for communicating their efforts to reduce their impact on the environment."

But Temper said that as climate change concerns mount, it has become increasingly common for businesses in all industries to make questionable environmental claims in their advertising.

"It has been the Wild West. Companies have been able to make almost any claim they want, using terms such as net-carbon neutral, without any reliable evidence base," Temper said.

"Hopefully this (C-59) will represent a sea change."

Alberta Environment Minister Rebecca Shulz has called the anti-greenwashing provision an "undemocratic gag order" that creates needless uncertainty for businesses.

On Thursday, the Calgary Chamber of Commerce said the new rules run at "cross-purposes" to the climate ambitions of industries across all sectors. 

The Chamber said the rules will also limit disclosure of climate targets and ambitions to investors and financial markets, putting Canadian companies at a distinct disadvantage relative to companies operating in other jurisdictions.

“Changes to Canada’s Competition Act will be far-reaching and risk the environmental progress industries writ-large have been working toward," said Chamber president Deborah Yedlin.

The debate over environmental claims in advertising has been heating up worldwide. Earlier this month, UN secretary-general Antonio Guterres urged countries to ban advertising by fossil fuel companies in the face of the climate crisis.

This report by The Canadian Press was first published June 20, 2024.