Royal Bank of Canada (TSX:RY) (RBC) is reportedly being investigated by the Canadian Competition Bureau for potentially using deceptive marketing practices, after receiving complaints the bank was greenwashing its advertising.
An investigation is well underway, according to the reports, which said the Bureau had received multiple complaints calling for an inquiry into RBC’s remarks on its commitment to climate action.
RBC advanced US$84.8bln to fossil fuel projects in 2021 through loans, investments and other means, according to Stand.Earth, an environmental organisation.
RBC has provided over US$201bn since the signing of the Paris agreement in late 2015, it alleges.
Matt Hulse, a lawyer at an environmental group, Ecojustice said: “RBC has claimed that it will achieve net-zero in its lending and investments by 2050 and will come out with targets and plans over the next two years, but this commitment is undermined by RBC’s continued financing of fossil fuels.”
Requests that the bank is fined C$10mln were also made by the applicants, who had complained earlier this year over the bank's alleged misleading comments.
Even though RBC said it had committed C$500bn worth of finance for sustainable development by 2025 among other interim emission reduction targets for 2030, CEO Dave McKay said the bank will not yet “divest completely away from fossil fuels”.
Banks generally are coming under increasing scrutiny about environmental claims that ignore their heavy involvement in financing fossil fuel projects.
HSBC saw some poster adverts banned by the Advertising Standards Agency for misleading remarks about its environmental position, while Barclays PLC (LSE:BARC) and Standard Chartered PLC (LSE:STAN) have also been heavily criticised by environmental groups.
Stand.Earth said: “Moving forward on a complaint alleging greenwashing in advertising shows that government agencies are increasingly willing to crack down on companies who misrepresent their environmental credentials to the public.”