With the ESG landscape evolving at a rapid pace, MLT Aikins is pleased to offer a curated list of timely and relevant ESG articles to help you stay current.
Canadian Regulators Zero in on Greenwashing Claims
With mandatory ESG reporting coming soon to federally regulated financial institutions and public companies, regulators are already investigating claims of greenwashing at Canada’s largest bank.
Earlier this week, Canada’s Competition Bureau confirmed it was investigating a complaint that consumers were being misled about the bank’s climate performance. The complaint alleges the bank made “materially false” claims about its commitments to the Paris Agreement Goals and achieving net zero.
As pressure increases from regulators, Canadian companies should expect a significant increase in the scrutiny and potential liability that will attach to all forms of ESG disclosure, including sustainability reports and net-zero commitments. Continue reading.
Financial Institutions Under Fire Due to Greenwashing Concerns
The U.K. ad regulator, the Advertising Standards Authority (the “ASA”), recently found that HSBC ads were misleading. The ads showcased the bank’s climate-focused actions. The ASA ruled they omitted information relating to HSBC’s contribution to CO2 and GHG emissions. Read more from ESG Today.
RBC is also under investigation by the Competition Bureau Canada given assertions that RBC’s climate-related representations are materially false and misleading. It is alleged that RBC’s representations reflect ambitious climate action consumers want to see, but its financial services undermine the climate-related goals it is claiming to support. Read more from National Observer.
Canada’s Commitment to Net Zero and Impacts of Oil and Gas Lobbying
A recent report highlights the impact the role of Canadian oil and gas companies has played in relation to Canada’s climate targets. The latest findings suggest that companies have made progress to address disclosure gaps but the companies fail to demonstrate how they align with Paris Agreement goals. Read more from SHARE.
Impact of ESG on the Mining Industry
The ethics, competitive advantage and culture of a mining organization are becoming increasingly important to investors. This trend is causing investors to look beyond the financial statements of a mining organization.
As such, the question of how to mine in socially responsible and environmentally sustainable ways is at the forefront of the modern mining industry. To address this question, mining companies should consider, among other things, whether there are ESG risks that may affect their ability to raise capital, obtain permits and/or work with communities, regulators and NGOs. Read more from Canadian Mining Journal.
Canadian Regulations Impeding Transition to Renewable Energy
Energy giant Shell PLC has voiced concerns that governments around the world, including Canada, need to accelerate their slow processes for permitting renewable energy if they want to achieve critical climate goals. This follows comments from Shell International’s vice president of global business environment in which he noted the global fossil fuel energy system is slowing down quicker than the creation of a newer, more environmentally sustainable system. Read more from the Globe and Mail.
Risk Associated with Carbon “Offset” Marketing
A recent article from ClientEarth comments on the legal risks of advertising or marketing carbon “offsets.” Some of these risks include:
Non-compliance
Shareholder action
Litigation
Regulatory enforcement
ClientEarth suggests that a more appropriate way to market carbon “offsets” is to label them as a donation toward climate-friendly projects and not as a method to offset negative climate impacts. This is because carbon credits cannot be offset in the way that a profit offsets a loss.
How ESG is Shaping the Future
A recent PWC survey of asset managers and institutional investors reveals that the asset and wealth management industry is in transition. The PWC report identifies 10 ways ESG is shaping the future, including:
Moody’s Says $1.9 Trillion at Stake as Biodiversity Loss Intensifies
Biodiversity loss and its impact on nature-related risks could cost close to $1.9 trillion, according to a report released by Moody’s. Certain high risks sectors, such as coal and metals mining and oil and gas exploration and mining could face greater regulatory and investor scrutiny as a result.
The report coincides with recent research on the impacts of biodiversity loss. Moody’s based its $1.9-trillion warning on sectors with significant exposure to natural capital and the rated debt in those sectors. Natural capital includes land, air, water and ecosystem services that are essential for supporting life. Read more from Bloomberg.
CFOs at the Centre of Enhanced Reporting to the SEC
A recent article suggests CFOs will likely be the focal point of climate-risk reporting. This largely stems from the volume of required disclosures that are tied to financial disclosure. These are intended to take climate risk and translate it into financial impact. Read more from Fortune.
Science Based Targets initiative (SBTi) Announces Forest, Land and Agriculture (FLAG) Science Based Target Setting Guidance
SBTi recently launched a standard method for businesses in agriculture, forest and land-based industries to set emission reduction targets that are aligned with global climate goals. These emission reduction targets are science-based. One of the key requirements under this new standard method is for businesses to make a commitment to zero deforestation by 2025. Read more from ESG Today.
ESG Factors and Corporate Fiduciary Duties
According to a recent article, a corporation's long-term success and growth requires, among other things, mitigating ESG blindspots. This acknowledges that factions of ESG form part of multiple considerations that are essential to a company’s sustainability. Read more from the Harvard Law School Forum on Corporate Governance.
MLT Aikins LLP, 1500 Hill Centre I, 1874 Scarth Street, Regina, SK S4P 4E9, Canada
