The Competition Bureau has opened an inquiry into Royal Bank of Canada's environmental representations and marketing after a complaint last summer that the bank's claims to be a climate leader were misleading.
A group of six individuals backed by environmental groups accused Canada's largest bank of "greenwashing" by making bold claims about taking action on climate change while funding projects such as the Coastal GasLink natural gas line in British Columbia.
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Those behind the complaint published a letter from the Competition Bureau saying that the commissioner has begun an inquiry.
According to the letter, the inquiry seeks to determine the facts relating to allegations that the Royal Bank of Canada made false or misleading environmental representations.
There was no further information given.
The Competition Bureau launched an investigation into the Royal Bank of Canada after receiving an application from six people.
She said in an email that she was unable to give further details about the matter.
Ecojustice suggested that if the Competition Bureau finds that the statements made by the bank are false, it could be forced to stop advertising itself as supporting the principles of the Paris Agreement.
The bank denied the accusations.
The complaint is not in line with Canada's climate plan, and RBC disagrees with it.
The bank is working towards solutions to help Canada meet its net-zero commitments.
Regulators, shareholders, and international organizations are trying to manage climate change risks. Given that companies in the oilpatch have been longstanding and lucrative clients, Canada's largest banks have a unique situation when it comes to environmental commitments.
According to Canadian Imperial Bank of Commerce, the largest banks have reduced their exposure to oil and gas as a percentage of their loans since 2015. The decline wasn't solely tied to the changing mix of loans. The total loan size went from an average of $8 billion to over $5 billion.
Direct loans are not the whole story. The banks have deep capital markets ties to the oil and gas sector, and have largely stood by the oilsands.
The director of climate finance at Stand.earth said that the decision by the bank to continue to bankroll fossil fuel projects is disingenuous greenwashing.
He called on the banks to stop financing the construction of new infrastructure.
Such calls have not been popular. A resolution that called on Canada's largest bank to update its criteria for sustainable finance to "preclude fossil fuel activity and projects" that face significant opposition from Indigenous peoples failed to pass.
Dave McKay, the CEO of the Royal Bank of Canada, has rejected calls for the government to sell off oil and gas projects.
It is critical that we get the transition to net-zero right in order to address climate change and we have taken a measured, thoughtful, and deliberate approach in our climate strategy, according to a spokesman for the Royal Bank of Canada.
The bank wants to reduce emissions in its lending portfolio. Environmental groups will be watching to see if reductions in intensity can be achieved even if emissions increase.
Bshecter@nationalpost.com is the email address for Bat Post.
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