Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
RBC Drops Green Commitment After Law Change
ESG | April 30, 2025
Image: Freepik
RBC Canada’s Largest Bank Ends Its Climate Finance Goals
Retuers reports that Royal Bank of Canada has stepped back from its $500 billion sustainable finance target, which was originally pledged in early 2021.
In its 2024 sustainability report (152 page PDF), RBC wrote that it would no longer publish several climate-related metrics because of the recent changes to Canada’s Competition Act that now require firms to fully support environmental claims with evidence. The Competition Bureau of Canada also published a companion link outlining their perspective on deceptive marketing and views on environmental claims and greenwashing in Canada.
An example of one of the metrics that RBC is no longer reporting is the energy supply ratio, which compares financing of low carbon projects to fossil fuel ones. RBC used to report the metric in past disclosures under shareholder pressure, such as from the New York City Comptroller. However, RBC now says it cannot share it publicly due to the updated laws. It's worth noting that RBC still tracks these metrics internally but it simply stopped reporting them to avoid legal risk.
RBC is part of a larger trend with several major Canadian banks recently exciting the Net Zero Banking Alliance and walking back similar commitments. In addition to the legal risk of 'greenwashing', these decisions are being made following increased scrutiny from regulators, investors, and advocacy groups.
Updates to the Competition Act
All environmental or climate claims need to be backed by clear evidence, including proof of how the data was calculated (not just the result). Companies must also use internationally recognized standards or methods of calculation like ISO or the Task Force on Climate-Related Financial Disclosures (TCFD). So when a company says it's funding green projects or working towards net zero, it MUST be able to show exactly how with verifiable evidence. The Competition Bureau explains the changes here.
Impact on Canadian Finance
This is surely a turning point in Environmental, Social, and Governance (ESG) and climate reporting in Canada. Institutions must now take climate statements, especially financial ones, more seriously as they have to be accurate, verified, and legally on the right side.
See: Competition Act Amendments and What It Means for Fintech
For fintechs and banks that rely on reporting ESG data as either a competitive advantage or primary part of their model, they must strengthen internal tracking and reporting systems if disclosing. Any vague promises about green initiatives is no longer enough, and the cost of getting it wrong is now legal exposure.
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