Tech Watch: Competition Bureau of Canada Issues Final Guidelines on Environmental Claims
The Competition Bureau of Canada has published its final Environmental Claims Guidelines, following two rounds of public consultation. These guidelines are intended to help businesses comply with the Competition Act, particularly considering new anti-greenwashing provisions that came into effect on 20 June 2024.
This bulletin provides an overview of key updates and their implications for businesses making environmental claims in Canada.
What is Considered an Environmental Claim?
The Bureau defines “environmental claims” as any representation related to the environment made to promote a product, service, or business.
“Greenwashing” refers to claims that mislead consumers by exaggerating, fabricating, or failing to properly support environmental benefits. These practices are now directly addressed under the revised Competition Act.
New Provisions in the Competition Act
Two new provisions were introduced to directly address greenwashing:
- Product Environmental Claims: Claims about a product’s benefits to the environment, such as protecting ecosystems, restoring resources, or mitigating climate impact, must be backed by adequate and proper testing conducted before the claim is made.
- Business or Operational Environmental Claims: Claims about a business’s operations or goals (e.g., "carbon neutral supply chain") must be substantiated using reliable evidence grounded in an internationally recognised method.
These new provisions build on existing deceptive marketing provisions under the Competition Act, which prohibit false or misleading representations and require product performance claims to be based on adequate and proper testing.
Key Principles for Making Environmental Claims
To support compliance with the Competition Act and reduce the risk of greenwashing, the Competition Bureau of Canada recommends that businesses consider the following principles when making environmental claims:
- Be Truthful and Not Misleading
Ensure that environmental claims are accurate and not misleading in their overall impression. According to the Bureau’s guidance, even a technically correct statement may still mislead consumers if it implies a broader or more significant benefit than what is substantiated. Disclaimers or fine print should not be used to correct an otherwise misleading message. - Back Claims with Proper Testing or Evidence
Product-related claims should be supported by adequate and proper testing conducted in advance. For claims related to business operations or goals, the Bureau recommends using internationally recognised methodologies and sufficiently rigorous evidence to support the claim. - Use Clear and Specific Language
Avoid vague or general terms such as "green" or "eco-friendly" unless clearly defined. The Bureau recommends that claims should identify what specifically is being referred to, whether a component, product, service or the entire business activity. - Avoid Overstatement or Exaggeration
The Bureau’s guidance discourages overstating minor environmental benefits or implying impacts that cannot be adequately supported. Claims should remain proportionate and fact-based. - Clarify Comparative Claims
When making comparisons (e.g., to earlier products or competitors), the Bureau recommends that businesses specify what is being compared, the basis for the comparison, and any relevant context or conditions. - Support Future-Oriented Claims with Credible Plans
Future claims (such as “net-zero by 2050”) should be substantiated with a credible and verifiable plan, including interim targets and steps already underway. According to the Bureau, such claims should be grounded in an internationally recognised method.
Additional Resources
The Competition Bureau of Canada strongly encourages all businesses to review the complete guidelines before making or revising any environmental marketing claims. The Final Guidelines are available at: https://competition-bureau.canada.ca/en/how-we-foster-competition/education-and-outreach/publications/environmental-claims-and-competition-act#sec02-2
Enquiry
For questions and additional information, please contact Dr Pratik Ichhaporia (pratik.ichhaporia@cpt.eurofinsus.com, +1-669-837-2257), David Hong (david.hong@cpt.eurofinscn.com) or Sravanth Kanukuntla (sravanth.kanukuntla@cpt.eurofinsus.com,+1-862-505-8470).