• Tighter enforcement: New guidelines reinforce the Competition Act’s amendments, mandating proof for environmental claims.
• Risk of major penalties: Fines for deceptive environmental marketing can reach up to 3% of global revenue or $15M per violation.
• Strategic compliance required: Businesses must align environmental claims with internationally recognized testing or substantiation methods.

The Competition Bureau of Canada has finalized its guidelines on environmental claims, marking a significant step in enforcing recent greenwashing provisions added to the Competition Act.

“These guidelines are designed to help businesses ensure compliance with the Competition Act when making environmental claims,” the Bureau stated.

Companies are free to promote sustainability but must back their claims with adequate and proper testing or substantiation, particularly for statements about a product’s or business’s environmental benefits.

The update follows two rounds of public consultations and reflects insights from over 400 submissions. A backgrounder detailing this engagement is available on the Bureau’s site. “The Bureau sincerely thanks everyone who took part… and encourages businesses to carefully review the guidelines before making any environmental claims.”

The rules don’t restrict what businesses can say — they simply demand truthfulness and evidence. Specifically:

• Product claims must be tested properly.
• Business-level claims must be substantiated using internationally recognized methodologies.

RELATED ARTICLE: EU Commission Proposes Rules to Protect Consumers from Greenwashing

The Bureau’s stance is reinforced by past actions: it has already taken enforcement steps against Keurig and Volkswagen under the deceptive marketing provisions of the Act.

Firms caught greenwashing face stiff penalties:

• Up to $10 million for a first offense (rising to $15 million for repeat violations)
• Or, three times the benefit derived, or 3% of global annual revenue, whichever is greater.

The Bureau also reminded stakeholders of its 2022 consumer alert, which aimed to raise awareness of greenwashing and encouraged public reporting. That push continues:

“The Bureau strongly encourages anyone who suspects that a company or individual is making deceptive marketing claims to report it.”

Executives, legal teams, and ESG leaders are now on notice: environmental messaging must match measurable impact, or face the financial and reputational consequences.

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