A group representing shareholders has lodged a complaint accusing Cenovus Inc. and Enbridge Inc., major players in Canada’s oil and pipeline industries, of deceptive environmental disclosures. The group, Investors for Paris Compliance, alleges that the companies have violated the Alberta Securities Act by providing inaccurate and incomplete information regarding their commitments to achieving net-zero emissions.
According to the group, Cenovus and Enbridge have created a misleading impression that their operations are in line with the transition to net-zero energy, even though such a transition could jeopardize their current business models and plans for expanding fossil fuel activities. Investors for Paris Compliance decided to bring the complaint to the Alberta Securities Commission rather than the federal Competition Tribunal, emphasizing the importance of enforcing securities laws promptly and credibly.
The group highlights that recent amendments to the Competition Act do not diminish the responsibility of securities regulators to address greenwashing practices. Referring to guidance from the Canadian Securities Administrators, the group argues that environmental disclosures should be held to the same standards as financial reporting.
Under the revised Competition Act, private entities, including environmental organizations, now have the ability to file complaints directly. However, Michael Sambasivam, a senior analyst at Investors for Paris Compliance, believes that the responsibility for enforcing such complaints should not solely rest on private citizens and groups.
The focus on Cenovus and Enbridge stems from their distinct roles in the energy sector, with Cenovus involved in production and Enbridge in transportation. The group accuses both companies of consistently failing to meet Canadian security disclosure standards in their communications.
Following the implementation of anti-greenwashing measures by the Competition Bureau, Cenovus removed its net-zero commitments from its website, raising concerns about the company’s ongoing environmental pledges. The complaint asserts that this lack of clarity constitutes a violation of the Alberta Securities Act.
The complaint also draws attention to public advocacy efforts by the companies that appear to contradict their climate commitments. While Enbridge reiterates its commitment to achieving net-zero emissions by 2050 and emphasizes its efforts to reduce operational emissions, Cenovus did not respond to requests for comment.
Investors for Paris Compliance is urging the Alberta Securities Commission to scrutinize the accuracy and adequacy of climate-related disclosures from Cenovus and Enbridge. The group calls for collaborative efforts among provincial securities regulators to establish guidelines for net-zero claims by publicly listed Canadian companies.
A spokesperson for the commission mentioned that they provide guidance and resources to assist companies in disclosing material climate risks and avoiding greenwashing language but did not comment on specific reviews of complaints.
