Competition Act amendments silence Canadian businesses taking climate action

Rhea-AI Summary

Cenovus Energy, part of Pathways Alliance, expressed concerns about Canada's Bill C-59, which amends the Competition Act affecting environmental and climate disclosures. The bill requires businesses to substantiate environmental claims using 'internationally recognized methodology,' which is undefined, creating risks of frivolous litigation. This has forced Cenovus to remove climate-related information from its platforms to avoid penalties. Cenovus stresses that these legislative changes threaten business transparency and climate communication, urging the federal government for clearer guidelines.

Positive

• None.

Negative

• New amendments to the Competition Act could lead to significant financial penalties for climate-related disclosures.
• The requirement for 'internationally recognized methodology' is vague, increasing the risk of litigation.
• Cenovus has been forced to remove environmental performance information from public platforms.
• The legislative changes create uncertainty and risk for all Canadian companies communicating about climate actions.

CALGARY, Alberta, June 20, 2024 (GLOBE NEWSWIRE) -- Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE), as a member of Pathways Alliance, today issued the following statement with respect to the Canadian government’s Bill C-59.

As one of the largest oil sands companies in Canada, and a member of the Pathways Alliance, we are steadfast in our commitment to environmental performance and operational emissions reduction. To support our commitment, we have strived to be transparent about our actions and plans, which we believe is critical to building trust and driving improvement.

However, our ability to remain transparent has been significantly compromised as a result of Bill C-59, which was recently passed and includes amendments to the Competition Act related to environmental and climate disclosure. With these changes, it is possible that certain public representations by a business about the benefits of the work it is doing to protect or restore the environment or address climate change will violate the Competition Act and subject it to significant financial penalties unless the business can adequately and properly substantiate their claims according to “internationally recognized methodology,” which may or may not exist.

Creating a public disclosure standard that is so vague as to lack meaning and that relies on undefined “internationally recognized methodology” opens the door for frivolous litigation, particularly by private entities who will now be empowered to directly enforce this new provision of the Competition Act. This represents a serious threat to freedom of communication.

These amendments create significant uncertainty and risk for all Canadian companies regardless of sector, that communicate publicly about environmental performance, including actions to address climate change. As a result, we have been forced to remove information on environmental and climate performance, progress, and plans from our website, social media platforms and other communications channels at this time. These actions are a direct consequence of this legislation and are not related to our commitments or belief in the accuracy of our environmental communications.

The result of this legislation, which has been quickly put in place with little or no consultation, is to silence Canadian businesses taking climate action. We will continue to impress on the federal government the need for clarity regarding these new amendments so that we and all other industries can share the important work we are doing to preserve and restore the environment and address climate change.

Cenovus Energy Inc.

Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is focused on managing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans.

Cenovus common shares and warrants are listed on the Toronto and New York stock exchanges, and the company’s preferred shares are listed on the Toronto Stock Exchange. For more information, visit cenovus.com.

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FAQ

What is Bill C-59 and how does it affect CVE?

Bill C-59 amends the Competition Act in Canada, affecting CVE's climate-related disclosures due to requirements for 'internationally recognized methodology,' leading to potential financial penalties and increased litigation risks.

How has Bill C-59 impacted Cenovus Energy's (CVE) public communications?

Bill C-59 has forced Cenovus Energy (CVE) to remove environmental and climate performance information from its website and social media to avoid potential penalties.

What risks does CVE face due to the amendments in Bill C-59?

CVE faces risks of significant financial penalties and frivolous litigation due to the vague standards in Bill C-59 for substantiating environmental claims.

Why did Cenovus Energy (CVE) remove climate-related information from its platforms?

Cenovus Energy (CVE) removed climate-related information to comply with Bill C-59 and avoid financial penalties and litigation risks due to the new disclosure requirements.