This week we are heading to Canada where the Competition Bureau has released its final guidelines on environmental claims. The guidance, designed to help businesses ensure compliance with the Competition Act when making environmental claims, includes new greenwashing provisions added to the Act through a series of amendments that became law on June 20th 2024.
Fines for deceptive marketing are up to C$10m (£5.4m) for a first-time violation – and the Competition Bureau in Canada means business (you may recall drinks giant Keurig Dr Pepper being handed a hefty C$3m fine plus a $0.8m charity donation for claims made about the recyclability of its coffee pods; a C$1.5m settlement was agreed in September).
Of the new provisions in the country’s Competition Act the Bureau, an independent law enforcement agency, explained: “Companies are free to make any environmental claims they wish, as long as they are not false or misleading, and have been adequately and properly tested or substantiated where required.”
So far, so standard (the UK and EU have been introducing similar frameworks and threats). However, the rules also specifically target so-called ‘greenwishing’ – a form of greenwashing related to, for example, targets being set, PR being enjoyed and no credible plan emerging. Targets can also be dropped or watered down.
And a growing number of (global) companies have been engaging in such tactics and many more are certainly in a sweat about how they will deliver the greenhouse gas emissions reductions they’re promising by 2030.
Michael Lenaghan, associate director at consultancy Anthesis explained: “Future claims are especially susceptible to greenwashing because they allow companies to make big, bold promises – and reap the rewards – without taking any action. Present-tense claims, by contrast, require effort and evidence upfront.”
As Lenaghan noted, organisations should absolutely be setting both medium- and long-term goals, and there may well be a PR bump from that. However, regulating these has been tricky … until now. Principle 6 of the Competition Bureau’s guidance in Canada states: “Claims about the future can be considered greenwashing if they represent little more than wishful thinking […] Environmental claims about the future should be supported by substantiation and a clear plan.”
Some companies in Canada have already pulled back on their claims, reported ESGToday. Regulators in other countries will certainly be taking notes – and watching any action closely. As should companies keen to market their green initiatives.
The Bureau stated: “Remember that it is not just the literal meaning of the claim that must be considered, but also the general impression it conveys to the public. Even well-intentioned businesses may realise that some of their environmental claims are inadvertently exaggerated or overstated when they carefully consider all of the facts and evidence. While even small benefits to the environment can be positive, they should not be marketed as big ones.”
Elsewhere in Footprint news this week we cover:
