Environmental Claims and Greenwashing
The new heightened risks of greenwashing: How recent amendments to the Competition Act raise the stakes for environmental claims
Environmental claims have carried inherent legal and reputational risks since the Competition Bureau archived its Environmental Claims: A Guide for Industry and Advertisers on November 4, 2021. However, recent changes to Canada’s Competition Act make those risks sharper, costlier and harder to ignore. With the passage of Bill C-59 in June 2024, the Competition Act has been amended to introduce new substantiation requirements based on novel concepts that have not been substantively defined.
The consequences for non-compliance are steep: for a first time violation penalties can be up to 3% of a corporation’s annual worldwide revenue and—starting June 20, 2025— a new private right of action will come into force and will be available broadly, including to consumers, competitors, and activist organizations.
Paired with a lack of substantive guidance from the Competition Bureau regarding how to prepare compliant environmental claims, we are currently in an era in which environmental claims represent an unprecedented relatively high risk. For in-house counsel and marketing teams, the message is clear: environmental claims must be carefully evaluated to align with risk tolerance, and risk mitigation measures (including a credible and effective compliance program) must be implemented in a manner commensurate with such risk tolerance.
Bill C-59 at a glance: Key changes to the Competition Act
- Proof first: Companies must have the prescribed support for their environmental claims before publication—not after a challenge.
- Wider enforcement: The new private right of action will broadly allow competitors, consumers and activist organizations to initiate legal proceedings even if they haven’t suffered direct damages.
- Heavy penalties: For corporations, fines of up to $10M (or the greater of 3 times the value of the benefit obtained through the deceptive conduct, or 3% of its annual worldwide revenue) for first offenses and $15M+ for repeat violations may be imposed. Larger corporations (and multinationals in particular) must pay close attention to these potential penalties. .
Not sure where to begin? Focus on these key areas.
Audit your environmental claims, and the associated support, before your claims go public
Audit your environmental claims, and the associated support, before your claims go public
Audit your environmental claims, and the associated support, before your claims go public
Audit your environmental claims, and the associated support, before your claims go public
Identify potential compliance gaps gaps and blind-spots
Identify potential compliance gaps gaps and blind-spots
Prepare for regulatory enforcement & litigation
Prepare for regulatory enforcement & litigation
Let’s talk about your environmental claims strategy
Whether you're reviewing your marketing claims, assessing compliance gaps and blind spots, preparing for litigation risk or defending a current action or investigation, our team is here to help. Connect with our advertising and regulatory, competition law and environmental law professionals to help safeguard your strategy and stay ahead of enforcement.
