Canada’s largest commercial bank is facing an investigation by the Competition Bureau of Canada over allegedly deceptive advertising related to its climate action, the federal watchdog confirmed on Tuesday.
According to a Sept. 29 letter from the bureau obtained by Yahoo Finance Canada, Royal Bank of Canada is under an investigation related to “certain marketing practices” at the bank. The letter is addressed to lawyers at Ecojustice, a non-profit environmental law organization, that previously filed a complaint with the bureau.
“The inquiry seeks to determine the facts relating to allegations that RBC has contravened the Act by making false or misleading environmental representations,” the letter reads in part.
Competition Bureau spokesperson Marie-Christine Vézina confirmed an investigation into RBC's alleged deceptive marketing was initiated at the request of six Canadian residents. She declined to provide further details, citing the agency's obligation to work confidentially.
An investigation by the Competition Bureau of Canada is not evidence of wrongdoing. No claims have been proven, and no charges have been laid.
In an emailed statement Royal Bank said it "strongly disagrees" with the allegations in the complaint, calling them "unfounded and not in line with Canada’s climate plan."
"RBC has been engaging with our clients, partners and other stakeholders, working towards solutions to help Canada meet its net-zero commitments," wrote Andrew Block, the bank's senior director for climate communication. "It’s critically important that we get the transition to net-zero right in order to address climate change, and we have taken a measured, thoughtful, and deliberate approach in our climate strategy."
Ecojustice lawyer Matt Hulse says RBC's ongoing dealings in the oil and gas industry are at odds with its stated climate strategy.
“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," he said in an emailed statement. "This commitment is undermined by RBC’s continued financing of fossil fuels and its failure to account for the bulk of emissions from the fossil fuel companies that it finances."
According to Ecojustice, RBC’s financing of fossil fuel companies in 2021 topped $34.4 billion in loans and underwriting, and included $50.4 billion in investments. In October of that year, RBC became a member of the UN-backed Net-Zero Banking Alliance, a commitment to align lending and investment practices with achieving net-zero emissions by 2050.
John Yorke, CEO of the marketing agency Rain43, says it's unfortunate that significant consumer backlash is unlikely.
"Nobody is going to take their money out of RBC," he said by phone on Tuesday. "The only way it has a big effect is if the Competition Bureau comes down really hard and makes a big deal of it, which I can't see happening."
Adam Zimmerman, a senior competition law officer with the bureau, whose name and signature are included in the document obtained by Yahoo Finance Canada, declined to comment on the matter.
The Toronto Star newspaper reported in April that two environmental groups, including Ecojustice, asked the Competition Bureau to investigate the bank over allegedly misleading advertising regarding its climate commitments.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.