Canada is moving forward with its crackdown on unsupported environmental marketing claims as part of Quebec’s “modernization” of the country’s competition regime.
Following an initial round of consultations held last summer, the Great White North’s Competition Bureau has published draft guidelines regarding the misrepresentations known colloquially as “greenwashing.”
While Canada’s Competition Act has always made it illegal to advertise or market something in a “way that is false or misleading,” amendments that became law in June now require that claims about the environmental benefits of a product, business or business activity be backed by substantive evidence that’s in line with an internationally recognized methodology.
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“The proposed guidelines aim to help businesses assess whether their environmental claims comply with the provisions of the Competition Act,” the Competition Bureau said in a statement. “The guidelines do not prescribe when or how businesses can make environmental claims. Companies are free to make environmental claims, as long as they are not false or misleading, and have been adequately and properly tested or substantiated as required.”
“Interested parties” have until Feb. 28 to provide feedback, following which the final guidelines will be published.
The agency has previously cautioned about the perils of greenwashing, for instance by issuing a business alert in 2017 that warned that “it’s not easy being green” and that businesses must “back up their words.” In 2022, another PSA cautioned consumers that “not every product is as ‘green’ as it looks.” Citing a global review by the International Consumer Protection and Enforcement Network that found that 40 percents of green claims made online could be duping consumers, the Competition Bureau advised consumers to “take a moment to reflect” whenever a company touts a product or service as “green.”
The watchdog group has also dinged businesses for making themselves seem more sustainable than they are. In 2020, it elicited nearly $200 million in restitution payments from the Canadian arm of Volkswagen after it was found to have installed software to allow its so-called “clean diesel” cars to clear emissions tests despite pumping out nitrogen oxide emissions up to 40 times the legal limit. Two years later, Keurig Canada shelled out $3 million in penalties, plus an $800,000 charitable donation, for making dodgy or inaccurate environmental claims about the recyclability of its single-use K-Cup pods.
Still open: An inquiry that the agency opened into Lululemon in May after the nonprofit Stand.earth accused the Vancouver-based yogawear purveyor of allegedly deluding consumers about its impact on the planet.
“Lululemon is one of Canada‘s most influential companies and one of the world’s biggest fashion brands through its ‘Be Planet’ campaign,” Tzeporah Berman, Stand.earth’s international program director, said at a press conference a few months before. “Although Lululemon has taken some actions and set some targets to reduce the harmful impact of its business operations and products, Stand.earth’s position in its complaint is that Lululemon’s business is inconsistent with its public claims to be an environmentally responsive company.”
Canada’s increased scrutiny of sustainability claims has paralleled that of the United Kingdom. In September, the latter’s Competition and Markets Authority published a “green claims in fashion” guide that accompanied warnings to 17 “well-known” fashion brands to review potentially problematic marketing practices, including the use of nebulous or overly broad terms like “sustainable,” blanket characterizations of products as “recycled” when only certain components can be described as such, and the curation of products into “green” ranges that don’t specify the criteria for their inclusion. The guide was informed by the conclusions of a nearly two-year investigation into Asos, Boohoo and George at Asda, which later signed formal agreements pledging to make only “accurate and clear” sustainability claims.
The European Union, too, has given a “final green light” to legislation outlawing vague marketing claims like “environmentally friendly,” “natural,” “biodegradable,” “eco” and even “climate neutral. To render product labeling “clearer and more trustworthy,” only sustainability labels based on official certification schemes or approved by public authorities will be allowed in the world’s largest single market.
“This law will change the everyday lives of all Europeans,” parliamentary rapporteur and Croatian politician Biljana Borzan said last January. “We will step away from throwaway culture, make marketing more transparent and fight premature obsolescence of goods. People will be able to choose products that are more durable, repairable and sustainable thanks to reliable labels and advertisements.”
Over in the United States, the Federal Trade Commission has been promising to update its own greenwashing guidelines, which are collectively known as the Green Guides and were last updated in 2012. But momentum has appeared to stall after the agency, which did not respond to an emailed request for more information, closed its request for public comments on potential revisions in April 2023. The idea behind any future spruce-up remains the same, however: to help marketers avoid inflating a business or product’s sustainable attributes through terms or phrasing that have latitude for interpretation, resulting in conceivable deception.
“Consumers are increasingly conscious of how the products they buy affect the environment, and depend on marketers’ environmental claims to be truthful,” Samuel Levine, director of the Federal Trade Commission’s Bureau of Consumer Protection, said at the time. “We look forward to this review process, and will make any updates necessary to ensure the Green Guides provide current, accurate information about consumer perception of environmental benefit claims. This will both help marketers make truthful claims and consumers find the products they seek.”
