Canada has significantly revised the Competition Act to address what is known as greenwashing.

According to the Canadian Climate Law Initiative, “Greenwashing is the practice of conveying false, misleading, or unsupported information about the environmental or climate benefits of an organization’s product, service, activity, or brand. Greenwashing manifests itself in different ways and it promotes false solutions and actions.”

Bill C-59 marks a significant shift in how environmental claims are regulated in advertising. Here’s what this means for businesses and the public:

• Shift in Burden of Proof: Previously, the Competition Bureau had to prove environmental claims were misleading. Now, the company making the claim must prove its accuracy, so if in a company’s marketing they claim to be protecting, restoring or being environmentally friendly they must have adequate and proper support of those claims.
• Enhanced Accountability: Businesses must base their environmental benefit claims on “adequate and proper testing” or internationally recognized methods. Again, this is a bit tricky, you have to back up an environmental ‘friendliness’ claim by internationally recognized methodology, but no one has defined this methodology.  These details are still be worked out.
• Private Right of Action: Starting June 20, 2025, private entities, including environmental groups, can directly take deceptive advertising claims to the Competition Tribunal if they demonstrate a public interest.
• Potential for Increased Litigation: This change could lead to more legal actions against companies suspected of greenwashing.

Key Elements:

• Targeted Claims: The law specifically addresses claims about products’ environmental benefits and business activities impacting climate change.
• Legal Repercussions: Failure to substantiate claims can lead to severe penalties, ensuring businesses are diligent in their advertising practices.

Recent Applications:

• Case Against Lululemon: An environmental group filed a complaint regarding Lululemon’s “Be Planet” campaign, which may lead to significant fines and public retractions if found misleading.
• Provincial Actions: Like the Lululemon case, Fortis faces accusations under British Columbia’s consumer protection laws for misleading claims about the benefits of natural gas.

Key Takeaways for Businesses:

• Review Advertising Practices: Companies should closely examine their environmental claims to ensure compliance with the new stringent standards.
• Prepare for Transparency: With the increased possibility of litigation, maintaining transparent and verifiable claims is more crucial than ever.
• Understand the Risks: Non-compliance can lead to heavy fines, legal battles, and damage to reputation, emphasizing the importance of accurate environmental advertising.

Bill C-59 holds companies accountable for the claims they make.