We’ve written before about Canada’s new anti-greenwashing law and how the risk of enforcement caused companies to quietly retract sustainability messaging. Now investors are weighing in and asking companies to make their sustainability information public once more. Responsible Investor covered the recent development stating:
“British Columbia Investment Management Corporation (BCI) is asking select Canadian energy companies that removed their sustainability disclosures for considerations and timelines for reinstating them, and amending as needed. The investor is also asking for transparency on companies’ policy advocacy work with the Competition Bureau, given the ongoing consultation. Anne-Marie Gagnon, director of ESG at BCI, told Responsible Investor: “Access to quality, comparable ESG and climate data is integral for investors to make informed decisions, effectively manage risks and opportunities, and advance engagement strategies.”
Companies are reluctant to make this information public in part because of the heavy penalties under the law for making claims not based “on adequate and proper substantiation in accordance with internationally recognized methodology”. Companies can face fines of $10 million for their first offense under the law, and $15 million for subsequent offenses. Trouble is, there are many sustainability methodologies for varying types of claims. The law doesn’t provide clarity on what methodologies are or are not allowed. However, Canada’s Competition Bureau is currently developing guidance that may clear up these ambiguities and allow companies to publish sustainability information with more confidence. The agency is currently conducting a consultation on enforcement guidelines through September 27.
In the meantime, I expect companies will continue taking a conservative approach to avoid large fines.
Our members can learn more about building their ESG business case here.
If you aren’t already subscribed to our complimentary ESG blog, sign up here for daily updates delivered right to you.
