Canada recently passed Bill C-59 which includes substantial additions to the Competition Act, aimed at regulating greenwashing. The changes are sweeping and relate to government regulation, private litigation, and competition agreements. In a recent memo, Torys discusses the major pillars of C-59:
· “Greenwashing as ‘deceptive marketing’. Bill C-59 requires certain environmental and climate change-related representations to be backed up by testing, or by substantiation in accordance with internationally recognised methodology.
· Private actions. Bill C-59 introduces a private right of action against a company that is alleged to have contravened the Act’s deceptive marketing provisions, including the new greenwashing provisions.
· Environmental certificates. Bill C-59 allows the Commissioner of Competition to issue certificates exempting certain otherwise illegal agreements or arrangements that are made ‘for the purpose of protecting the environment’ and that are ‘not likely to prevent or lessen competition substantially in a market’. These exemptions do not apply to the new greenwashing provisions.”
It is important to note that the new greenwashing provisions don’t just apply to advertising. They also apply to a variety of green claims including claims that a company or product is “green,” “sustainable,” “recyclable,” “compostable,” “carbon neutral,” “net-zero,” “sustainable,” or “nature-positive.” In the UK, even using the color (er, colour…) green can be considered greenwashing in certain instances. Under Canada’s new law, these claims must be substantiated and the burden is on companies to prove that their claims can be justified. The new rules add to the international tapestry of greenwashing legislation and are similar to greenwashing and competition legislation that we’ve seen developing in the EU. It’s getting harder for companies to advertise on sustainability grounds without having data to back up their claims and as more regulations pass, more litigation and enforcement risks arise.
Our members can learn more about greenwashing and related legislation here.
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