Complainants urge regulator to weigh RBC's dropped targets in ongoing greenwashing probe
Complainants say the Competition Bureau should weigh Royal Bank of Canada’s decision to rescind its sustainable finance targets, according to The Globe and Mail.
They argue the move is relevant to the watchdog’s ongoing probe into allegations that the bank made misleading claims about its climate change efforts.
Six individuals backed by environmental groups allege in a letter to the bureau that RBC’s recent withdrawal of sustainability targets supports their initial claim.
They argue 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.
According to Reuters, RBC exited the United Nations-convened Net-Zero Banking Alliance in January 2025, following similar moves by other Canadian banks, including TD and Bank of Montreal.
These withdrawals reflect a broader reassessment of climate commitments within the banking sector.
“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,” 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, Wealth Professional reported that RBC committed to making $500bn 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 $15bn for renewable energy by 2030, and boosting overall lending for low-carbon energy projects to $35bn 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.
As reported by Financial Times, RBC’s move mirrors global financial institutions such as HSBC and UBS, which have also revised or delayed their climate goals amid mounting regulatory complexity and difficulty measuring sustainable finance impact.
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.
According to legal analysis by McMillan LLP, the June 2024 amendments to the Competition Act introduced penalties for making unsubstantiated environmental claims and require climate-related disclosures to align with internationally accepted standards.
“Understanding why RBC withdrew its sustainable finance commitment may help the bureau understand whether the sustainable finance representation was false and misleading,” wrote lawyers for Ecojustice.
In the letter submitted Wednesday to the Competition Bureau, they said this context could support the case made by the complainants.
They also asked for an update of the status of the inquiry, which has been under way for two and a half 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 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, 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.
