Competition Bureau clarifies expectations around new greenwashing rules

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This article was published 23/12/2024 (347 days ago), so information in it may no longer be current.

GATINEAU, Que. – The Competition Bureau released draft guidelines on Monday that aim to clarify expectations around new greenwashing rules.

The new laws that were passed in June require companies to be able to substantiate environmental claims they make.

The rules have sparked concern and confusion as to how far they go, and what businesses are able to say. Soon after the law passed, the Pathways Alliance group of oilsands companies removed all content from its website and social media feeds, citing uncertainty over the rules.

The concerns led the bureau to accelerate its release of the guidance that it’s now seeking feedback on until Feb. 28, 2025.

The guidelines give both guidance on the environmental side of existing rules, as well as details on the new law, noting in all cases, the rules only apply where the purpose of the claim is the promotion of a product or business interest.

The bureau warns that overall, it will have to see how the courts interpret many of the concepts in the new law, but in the meantime it will rely on the “ordinary meaning” of the words used.

For businesses that make claims about the environmental benefits of a product, the bureau says it will have to establish that the company publicly made the claims for promotional purposes, but then it will be up to the company to prove the claims were based on adequate and proper testing.

Similarly, the bureau will have to prove that a company made public claims to promote a product or business interest, such as that it’s on track to reach net-zero emissions, but it will be up to the business to prove the claim was based on adequate and proper substantiation in accordance with internationally recognized methodology.

It gives the example of a company that’s claimed it’s on its way to being net zero by 2050, but that it didn’t take steps to substantiate the claim, and didn’t develop a “concrete” plan to mitigate its emissions.

“In this scenario, the claim would likely be considered by the bureau to be a representation with respect to the environmental benefit of a business that is not based on adequate and proper substantiation.”

In the example, the company is specifically claiming it is achieving its target, while many companies have simply set net-zero targets.

The bureau however also said claims about the future can be considered greenwashing if they represent little more than wishful thinking. It said businesses should both understand what needs to be achieved and have a concrete, realistic and verifiable plan to accomplish the target before making a claim.

It notes that on the issue of what it considers “internationally recognized methodology,” a key question raised by businesses, it says the method would likely meet expectations if it is recognized by at least two countries.

The bureau said it won’t seek to hold anyone liable for a breach of the new law that happened before it came into force. It said it would also consider the circumstance of each case when exercising its enforcement discretion.

This report by The Canadian Press was first published Dec. 23, 2024.