Environmental claims and greenwashing

The 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. 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 for which advertisers have limited practical guidance to assess their application in enforcement or litigation scenarios.

The consequences for non-compliance are significant. However, Budget 2025 has removed a degree of uncertainty regarding the substantiation for claims about the environmental benefits of a business or business activity. As of March 26, 2026, claims about the environmental benefits of a business or business activity: (i) are no longer required to be substantiated in accordance with “an internationally recognized methodology”; and (ii) cannot be challenged by private via the Competition Tribunal In contrast.

Paired with limited substantive guidance (both from the Competition Bureau and Ad Standards), we are currently in an era in which environmental claims represent 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.