A general view shows a Syncrude oil sands mining facility near Fort McKay, on Sept. 7, 2022. The oil industry is pushing back against a bill that would make it validate its environmental claims.ED JONES/Getty Images
Hugh Helferty is a former ExxonMobil executive. He is now president and co-founder of Producer Accountability for Carbon Emissions, a non-profit advocating net-zero by 2050.
Last month’s passage of anti-greenwashing Bill C-59 has caused an extremely strong reaction in the oil industry. As a former industry executive with more than 30 years of experience leading major research and engineering at ExxonMobil, I struggle to understand what the fuss is about.
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Bill C-59 includes an amendment that requires corporations to provide evidence to support their environmental claims. In response, the Pathways Alliance, a consortium of Canada’s six largest oil sands companies, removed all content from its website and social-media channels. Many oil and gas companies urgently took down claims or added disclaimers to their sites. Some have billed the amendment as overbroad, extreme and even unconstitutional.
Yet truth-in-advertising is quite a reasonable requirement. The industry already provides evidence to support product performance claims. If their environmental claims are supported by facts, they should be able to handily defend them.
But if, on the other hand, the oil industry cannot support their environmental claims with evidence, why are they making such claims in the first place? And, most importantly, how are they to be believed? Lack of transparency seeds distrust, and the new legislation will offer much-needed protection against false, unfounded, or misleading advertising.
Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers (CAPP,) lamented that the “burden of proof” for environmental claims will now fall “entirely on companies.” I would argue that it is fully reasonable to expect companies to be able to back up their own claims, rather than put the burden onto external parties to sleuth out disinformation.
The oil industry has cast doubts on Bill C-59′s requirement that claims must meet an internationally recognized methodology. Yet credible international standards already exist, even industry-created ones. Consider for example the Sustainability reporting guidance for the oil and gas industry, a key tool published in conjunction with the American Petroleum Institute (API) and the International Association of Oil & Gas Producers (IOGP). Or widely used international standards by the International Organization for Standardization (ISO), the Science Based Targets Initiative (SBTi), the United Nations High-Level Expert Group’s (HLEG), and the GHG protocol. Clearly, standards exist, and the federal Competition Bureau has promised to speed guidance on this point.
The Pathways Alliance and its member companies have also alleged that Bill C-59 “opens the door for frivolous litigation” from environmental groups challenging their claims. Recent history shows that it is the oil industry that is guilty of frivolous litigation and not the other way around. For example, Arjuna Capital, an ExxonMobil shareholder, recently submitted a proxy proposal asking the company to accelerate its greenhouse gas emission reductions. Rather than make the case to the Securities and Exchange Commission to block the proposal because it was similar to previous resolutions, ExxonMobil promptly sued Arjuna.
Lacking the resources for a protracted lawsuit, Arjuna withdrew its proposal and even agreed not to resubmit it in future years. Yet despite having won the battle, ExxonMobil continued to pursue its lawsuit. Ultimately, the judge hearing the case dismissed it, concluding that: “Arjuna has eliminated any case or controversy between the Parties here, Exxon’s claim is moot and must be dismissed without prejudice.” It’s evident that oil companies have the upper hand when it comes to lawsuits, thanks to their vast resources.
Oil companies proudly display ethics policies on their websites. The policy of ExxonMobil affiliate Imperial Oil states that their companies are to comply with “all governmental laws, rules and regulations applicable to their business.” Their ethics policy also insists that, even where the “law is permissive,’’ the companies will choose the course of “highest integrity.” If this is the case, then oil companies’ environmental claims should be rigorously defensible and beyond reproach.
Environmental accounting for large corporations with elaborate supply chains may be complex. However, given that the fossil-fuel sector is the single largest contributor to greenhouse gas emissions in Canada, its accountability for rigorous environmental management is not merely optional – it’s essential. If they can’t keep track of their pollution what does that say about their duty of care to those affected?
A requirement for truth-in-advertising for environmental claims is long overdue. The oil industry should stop whining and get on with complying with the new law. It is the least that people in Canada deserve.