“Greenwashing” and the Anatomy of Compromise

by | Sep 26, 2025 | Environment

As Ayn Rand explains in her short essay The Anatomy of Compromise, compromising rational principles never works.

In a recent Financial Post op-ed, Gina Pappano rightly defends oil and gas companies as essential to human prosperity and their right to pursue profits. She relates this to a complaint to the Alberta Securities Commission by an environmental activist group, Investors for Paris Compliance (I4PC), that accuses two of Canada’s major oil and gas companies, the oil sands producer Cenovus and the pipeline operator Enbridge, of having misled investors about their net-zero commitments.

The complaint was filed under Bill C-59 that was enacted last year to amend the Competition Act. The Bill is to combat “greenwashing,” or making products and activities appear more ”environmentally friendly” or less “environmentally damaging” based on an undefined “international standard.” Under this amended, non-objective Competition Act, any discussion by companies of their plans and efforts to curtail their carbon dioxide emissions could qualify as a crime.

The amended Act also enables activists to file complaints against companies who, if found in violation, face fines starting at $10 million and the cost in time and money to defend themselves. Pappano contends that “the true cost of [bending to the activist class] is only now becoming apparent” – as if Cenovus and Enbridge could not have foreseen these consequences of their appeasement of environmental activists that now detract from their value creation and fiduciary duty to their investors.

But Cenovus and Enbridge could have seen this coming, had they identified the basic principles involved.  Rather than acquiescing to the net-zero goals imposed by the government and bending to the pressure from the activists, these companies and others like them, could have paused and asked themselves: What principles apply here and how?

Consulting principles – basic generalizations that serve as guides to action – such as individual rights, self-interest, and justice, would have allowed Cenovus and Enbridge to project the future clearly and to choose action different from the appeasement that compromised rational principles. The basic rational principles in this case, and their irrational opposites, are self-interest versus self-sacrifice, and more broadly, human flourishing versus human sacrifice (for the sake of net-zero carbon emissions).

By appeasing environmental activists and the government through agreeing not to expand their oil and gas operations and through transitioning to renewable energy production, Cenovus and Enbridge compromised the principle of self-interest.  A business (or a human being) cannot sustain itself for long unless it pursues the self-interest of its investors, by producing and trading goods and services that customers value and thereby creating returns for the investors. Such value creation increases overall wealth and therefore human flourishing, through better products and services, employment and educational opportunities, and prosperity. (Rational self-interest excludes any violation of the rights of others through fraud or other forms of physical force).

As Ayn Rand explains in her short essay The Anatomy of Compromise, compromising rational principles never works. Such compromise is self-destructive because it taints a rational principle with its opposite, and thereby detracts from achieving long-term goals, such as value creation and profit-maximization, or prevents reaching them altogether.

By embracing, or appearing to embrace, the government’s net-zero emission goals, Cenovus and Enbridge resorted to the irrational principle of self-sacrifice. No-one who wants to survive and thrive can apply that principle systematically because it demands always putting others’ interests first. But even in small doses, self-sacrifice is destructive.

Ceding to the demands for self-sacrifice just once – such as agreeing to end fossil fuel production that supports and enhances human life – means giving up the principle of self-interest and the moral defense of pursuing it. When activist groups or the government demand more concessions and more sacrifices from the oil and gas companies, what moral arguments can the companies offer in their defense, once they have given up the principles of self-interests and human flourishing?

Gina Pappano concludes her op-ed by advising Cenovus and Enbridge and other oil and gas companies to “renounce net-zero and start promoting themselves as the cornerstone of Canada’s prosperity – which they clearly are.” That’s all good going forward, but it’s much harder and less credible once the companies have compromised the principle of self-interest and resorted to appeasing the net-zero demands.

There is hope even for such companies, as net-zero initiatives and alliances are losing corporate support in the face of the undeniable evidence that carbon dioxide emissions are not destroying the planet (but rather enhance plant growth that helps feed the population) and that human flourishing requires affordable, reliable and abundant energy for which oil and gas are a major source.

But since further demands for corporate self-sacrifice from activists and governments are more than likely, companies would do well to reject appeasement, heed the principles of rational self-interest and human flourishing, and use them for their own moral defense. Such defense takes courage but is necessary for the companies to sustain themselves. And we would do well to join in their defense because our survival and well-being depends on their success.

Jaana Woiceshyn taught business ethics and competitive strategy for over 30 years at the Haskayne School of Business, University of Calgary, Canada, where she is now an emerita professor.How to Be Profitable and Moral” is her first solo-authored book. Visit her website at profitableandmoral.com.

The views expressed represent those of the author and do not necessarily represent the views of the editors & publishers of Capitalism Magazine.

Capitalism Magazine often publishes articles we disagree with because we believe the article provides information, or a contrasting point of view, that may be of value to our readers.

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