We’ve been following changes to Canada’s competition law designed to crack down on greenwashing. The amendments, passed last summer, caused some companies to change their behaviors, though not always in the intended manner. Fearing steep penalties, some companies decided to go quiet on ESG and stop publishing data. This made things difficult for investors who felt frustrated with the lack of information at their disposal. Now, new guidance from the Canadian Competition Bureau hopes to clear up some of the law’s murkier provisions. One area of note is the clarification on when and how future promises should be substantiated. ESG Today writes:
“The new publication includes a guideline for environmental claims about the future – such as net zero goals and timelines – requiring them to be supported by substantiation and a clear plan, noting that ‘claims about the future can be considered greenwashing if they represent little more than wishful thinking.’ In order to be well-founded and substantiated, the Bureau guides businesses to ensure they have a clear understanding of what needs to be done to achieve the goal, to have a ‘concrete, realistic and verifiable plan to accomplish the objective, with interim targets,’ and meaningful steps underway to accomplish the plan.”
Forward-looking statements are generally thought to be safer legally than historical statements. This is because a forward-looking statement cannot be as easily disproven since the core of the claim will happen in the future. However, this presents a problem because forward-looking statements are prime territory for greenwashing. Changes to greenwashing laws, like those in Canada and those proposed in the EU, tighten up the regulatory environment and make forward-looking statements riskier for those who cannot prove their intentions.
Our members can learn more about greenwashing here.
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