In late April, RBC announced it had revoked its sustainable finance goals.Carlos Osorio/Reuters
The Competition Bureau should consider Royal Bank of Canada’s decision to rescind its sustainable finance targets as part of the watchdog’s long-running probe into allegations that the lender made misleading statements about its climate change action, the complainants say.
Six individuals backed by environmental groups allege in a letter to the bureau that RBC’s recent withdrawal of sustainability targets support their initial claim that the bank contravened the Competition Act by misrepresenting its commitment to the goals of the Paris Agreement.
RBC said it strongly disagrees with the allegations, calling them unfounded and saying it still intends to achieve net zero in its lending by 2050.
In late April, RBC announced it had revoked its sustainable finance goals, which had included making financing available for emissions reduction and other energy-transition initiatives.
It blamed legal uncertainty stemming from the federal government’s recently enacted anti-greenwashing provisions in Bill C-59 as well as changing measurement practices. RBC said it was considering changes to its overall approach to sustainable finance.
“They admit there is a problem there,” said Richard Brooks, climate finance director for the environmental group Stand.earth, and one of the complainants.
“They weren’t specific about what the problem is, but that leads us to conclude that it reinforces our original complaint that there is misleading information in regards to their sustainable-finance target and accounting,” Mr. Brooks said in an interview.
The Competition Bureau began its inquiry in October, 2022, in response to allegations that RBC was working against its stated climate goals by providing billions of dollars in financing to the oil and gas industry. The complainants further alleged the bank “lacks a credible plan” to reach its stated goals.
In 2021, RBC committed to making $500-billion in financing available by 2025 for achieving net-zero emissions and a range of other environmental and social initiatives. Last year, the bank added to its low-carbon transition strategy by earmarking $15-billion for renewable energy by 2030, and boosting overall lending for low-carbon energy projects to $35-billion within the same time frame.
The latter are among targets the bank has stopped disclosing in its annual sustainability report, but said on Thursday it is still working toward.
It has previously explained the anti-greenwashing provisions in Bill C-59 restricted the bank’s ability to report several metrics, partly because there are no established methods yet for measuring some of them.
“Understanding why RBC withdrew its sustainable finance commitment may help the bureau understand whether the sustainable finance representation was false and misleading,” lawyers for the group Ecojustice, acting for the complainants, wrote in the letter to the Competition Bureau on Wednesday.
They also asked for an update of the status of the inquiry, which has been under way for 2½ years. It was launched well before the government passed the amendments to the Competition Act in Bill C-59 in June, 2024.
Those provisions call for climate reporting to be backed by internationally recognized measures, and put companies at risk of financial penalties if they are found to have made false or misleading false assertions.
Competition Bureau spokesperson Marianne Blondin said she could not provide any details about the RBC inquiry as the watchdog is required to conduct its work in private.
With regard to Bill C-59, Ms. Blondin said the bureau will not hold anyone accountable for breaches of the new provisions on complaints made before they came into force last year.
However, businesses can be held liable for the previous deceptive marketing provisions under the act if claims are found to be materially false or misleading, she said.
RBC spokesperson Sarah Kennedy stressed that sustainable finance and climate goals are not one and the same.
“The goal of RBC’s climate strategy is to be the bank of choice in the transition to a low-carbon and resilient economy with an action plan that is centred on engaging and supporting our clients across sectors in the transition,” she said in a statement.