The Competition Bureau of Canada announced “improvements” to the Deceptive Marketing Act which in part aims to crack down on greenwashing.
What are the key changes?
The changes announced by Canada's competition watchdog aim to tackle unsupported environmental claims, commonly known as greenwashing, by:
- Requiring that claims about the environmental benefits of a product be supported by adequate and proper testing
- Requiring that claims about the environmental benefits of a business or business activity be based on adequate and proper substantiation in accordance with an internationally recognised methodology
- The Bureau is assessing the impact of these requirements and expects to provide guidance, in due course, that will offer transparency and predictability for the business and the legal communities in the enforcement of the law.
An article in Forbes followed which alleged Canadian firms that were non-compliant could be fined up to CA$10m or 3% of a company’s gross annual revenues.
A swathe of queries prompted a statement from the Canadian Competition Bureau, saying it would “develop guidance on an accelerated basis in consultation with a broad range of stakeholders."
It will launch a public consultation in the coming weeks to gather views and input, it added.
The news was welcomed by the Canadian Apparel Federation which said the changes would force many companies to revisit how they promote their products in terms of sustainability in light of the substantial penalties that the Competition Bureau can levy.
CAF outlines how the changes will affect the apparel sector
- They place important restrictions on how companies can promote their company or their products as sustainable
- They expose companies to substantial penalties for making unfounded/ unsubstantiated statements re. sustainability
- These restrictions and penalties are now in force
- In 2025 changes will expand the ability of private parties (NGOs etc) to bring complaints to the Competition Bureau on these issues.
“The Canadian Apparel Federation has for over five years requested that the Canadian government provide guidance around environmental claims. As a result, we welcome the announcement made by the Competition Bureau, and have requested to be involved in the process going forward.”
