By Colin Isaacs
It seems that the federal government really does not like to see businesses providing environmental leadership. At least that is the conclusion that seems most probable from the environmental claims rules that became law on June 20, 2024 as part of The Fall Economic Statement Implementation Act, 2023 (Bill C‑59).
Embedded in this enormous omnibus bill are new provisions making it an offence to make environmental claims for a product, service, program or organization unless certain challenging conditions are met. The objective is to shut down so-called “greenwashing,” the making of false or inaccurate environmental claims, but with the law now placing the burden of proof for environmental claims on the organization (person) making the claim the effect, if the law is effectively enforced, may well cause the demise of environmental claims in both the commercial and consumer marketplaces.
There is little doubt that greenwashing was getting out of hand but so are false product claims of many kinds, not just environmental. Would it not have been better to develop a program to encourage greater use of accurate environmental claims rather than to discourage all environmental claims? This legislation’s requirement that environmental claims must comply with appropriate international standards is reasonable for multinational corporations but is likely to be an insurmountable burden for Canadian small- and medium-sized business that not only make up most of the Canadian economy but also are the source of most of the environmental innovation in Canada.
As has happened in other areas of environmental policy, such as plastics recycling and bans, the government has introduced policy before assembling the data. We have no data on the rate of greenwashing in Canada, the nature of that greenwashing, or which companies are most guilty of greenwashing. All that is known is that at least a few high-profile companies are making dubious claims.
We used to have guidelines provided by the Canadian Standards Association and the Competition Bureau to help companies decide which environmental claims were deemed acceptable and which were not acceptable. The Competition Bureau has for decades held the power to charge those companies which broke the rules with misleading advertising.
However, those guidelines were “archived” more than two years ago without any explanation available from the Bureau. An update to the previous rules and a budget for enforcement of the rules might have been a better response than introduction of what is in effect a deterrent to environmental labelling and advertising by Canadian business.
The idea of backing up all environmental claims by testing or by substantiation in accordance with internationally recognized methodology fails to recognize that the wording of tests and claims is critical and that science is dependent in part on location. There are no internationally recognized methodologies to support many of the environmental claims that are common in the Canadian consumer marketplace and even if there were the claims themselves may be inappropriate for many areas of Canada.
Compliance with the United Nations’ Sustainable Development Goals (SDGs) is just one example where the Government is pledged to support Canadian business (and government) participation yet where C-59 would appear to prohibit the announcement of compliance by Canadian business because there is no international test which can determine with scientific accuracy that an organization is in fact complying with the SDGs.
Many of the false environmental claims are made by politicians and government departments at all levels. It would seem ridiculous that a Minister of the Crown can make a claim for an environmental technology that the company itself cannot make. For example there is no consistent environmental standard covering the lifecycle benefits of carbon capture and storage, yet governments are regularly touting its benefits.
It’s the lifecycle versus the single aspect claim that frequently gets companies into trouble with critics: a product may have a single positive environmental attribute that can be measured but a number of negative environmental attributes that cannot be measured.
Will companies now be required to conduct a Life Cycle Assessment (LCA) of the one positive attribute before making a claim based on that attribute or will the Competition Bureau be tough and require a full LCA before accepting a claim of better for the environment? If it’s the former, the problem of green washing will persist; if it’s the latter, there will be serious damage to the Canadian economy and environment as domestic companies decide that compliance with the environmental labelling and advertising provisions of C-59 is not worth the cost.
A summary of the implications of Bill C-59 is available from the law firm Gowling WLG at New greenwashing laws under the Competition Act | Gowling WLG
Colin Isaacs is a chemist with practical experience in administration, municipal council, the Ontario Legislature, a major environmental group, and, for the past three decades, as an adviser to business and government. He is one of the pioneers in promoting the concept of sustainable development for business in Canada and has written extensively on the topic in the popular press and for environment and business platforms.
