What is Bill C-59?
With the introduction of Bill C-59, Canada has amended Section 74.01 of the Competition Act to combat greenwashing and enhance accountability in environmental claims. Greenwashing refers to deceptive environmental claims because they are false, misleading or not adequately and properly tested or substantiated. These new provisions mandate that public and private companies substantiate any statements regarding their product or business activities’ environmental benefits. The amendment requires any statement, warranty, or guarantee about a product’s environmental impact to be supported by adequate and proper testing. Claims related to the benefits of a business or business activity must be substantiated using recognized, internationally accepted methodologies to ensure accuracy and prevent misleading consumers.
The penalties for failing to meet these standards are significant: businesses face the greater of $10 million in fines (or $15 million for repeat offenses), three times the benefit gained from the misleading claim, or 3% of their worldwide revenue. This financial deterrent sends a clear message to companies: deceptive environmental claims will no longer be tolerated. In addition, by 2025, private rights of action will empower individuals and groups to file complaints directly to the Competition Tribunal, which could lead to an uptick in greenwashing-related disputes.
With further guidelines expected from the Competition Bureau, Bill C-59 sets a clear standard: companies must support all environmental claims with solid proof or risk significant legal, reputational, and financial repercussions.
Tips for Crafting Reliable Environmental Claims
To help businesses navigate these new provisions, the Competition Bureau offers practical guidance:
Be truthful and not false or misleading: Your claim’s literal and general impressions should align with the truth. For example, a “carbon-neutral” claim must be backed by concrete reductions in emissions rather than relying solely on offsets. Otherwise, it gives the misleading impression that fossil fuels are being reduced.
Ensure claims are properly and adequately tested: Businesses must substantiate environmental performance claims with thorough testing and verify them with proper evidence before they are presented to the public, ensuring they are accurate and not misleading. More guidance from the Competition Bureau is forthcoming.
Comparative claims; be specific about what is compared: When making comparative claims, specify the basis of comparison. For example, stating “50% less plastic than competitors” is misleading if it does not clarify the competitor’s baseline or environmental benefits.
Avoid exaggeration: Businesses must avoid exaggerating environmental benefits; even small improvements should not be marketed as major achievements. Claims should be carefully reviewed to ensure they don’t mislead consumers to believe a company is more sustainable than it actually is in practice.
Avoid vague environmental claims in favour of clear and specific ones: Businesses should avoid vague environmental claims and instead use clear, specific language to prevent misleading consumers. Claims like "eco-friendly" can imply broad environmental benefits across a product's entire lifecycle, which may not be substantiated. It's important to specify which aspect of the product or business the claim applies to and ensure it’s backed by proper testing.
Avoid aspirational claims about the future: Businesses should avoid aspirational environmental claims unless backed by concrete, verifiable plans with clear targets. For example, claims such as “we aim to be net zero by 2050” should be supported with detailed, actionable plans with interim targets and measurable steps.
Why Avoiding Greenwashing Matters
Beyond compliance, avoiding greenwashing builds trust, strengthens brand reputation, and fosters authentic consumer relationships. As consumers become more skeptical, authenticity is key. By following these guidelines and committing to clear and substantiated environmental claims, businesses can mitigate legal and reputational risks while contributing to meaningful environmental progress.
How Achieve Sustainability Can Help
Achieve Sustainability offers tailored support to help businesses navigate the complexities of anti-greenwashing regulations. We provide a comprehensive review and assessment of your current communications to identify areas for improvement. Additionally, we assist in establishing governance structures and processes to guard against greenwashing and ensure compliance. For teams looking to deepen their understanding, we also offer customized workshops designed to equip marketing and executive teams with the knowledge needed to create credible and transparent environmental claims. Reach out to us today to set up a complimentary consultation at info@achievesustainability.ca.
References
Competition Bureau Canada. (2024). Deceptive marketing practices digest: Volume 7. Government of Canada.
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