The Competition Bureau Canada has announced that it has issued its final guidelines regarding environmental claims after meaningfully weighing more than 400 submissions received across two rounds of public consultations held this past year.
The final guidelines seek to assist businesses in making environmental claims that meet the relevant requirements under the Competition Act, 1985, according to a news release from the Competition Bureau.
The Competition Bureau said these guidelines aim to help organizations make environmental claims that are neither false nor misleading and that sufficiently and properly test or substantiate their claims where required.
The Competition Bureau noted that the final guidelines do not specify how or when companies can make their environmental claims. Rather, the guidelines provide that businesses can freely make environmental claims how and when they wish as long as they comply with the law.
The Competition Bureau urged businesses to review the guidelines carefully prior to making any environmental claims. The Competition Bureau expressed sincere gratitude to those who participated in the public consultations leading to the final guidelines.
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The Competition Bureau’s news release noted that the Competition Act has added greenwashing provisions via a series of amendments that passed into law on June 20, 2024. The Competition Bureau explained that the legislation’s provisions expressly target greenwashing by requiring businesses to base certain claims:
- regarding a product’s environmental benefits on adequate and proper testing
- about a business activity’s environmental benefits on adequate and proper substantiation, in line with an internationally recognized methodology
The Competition Bureau shared that it issued a consumer alert to promote awareness and reporting of greenwashing in 2022. The Competition Bureau added that it has also taken enforcement action in two environmental claims under the Competition Act’s civil deceptive marketing practices provisions over the past few years.
In its news release, the Competition Bureau noted that the penalty for corporations breaching the deceptive marketing provisions is up to the greater amount between:
- $10 million for a first-time violation ($15 million for every subsequent violation)
- three times the value of the benefit received due to the deceptive conduct, or three percent of the company’s annual global gross revenue, if the previous value cannot be reasonably determined
The Competition Bureau encouraged anybody suspecting deceptive marketing claims on the part of a company or an individual to make a report via an online form. Lastly, the Competition Bureau said it offers a backgrounder with more information regarding its consultations on its website.