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Green Sheen to True Green: How to Master Canada’s Anti-Greenwashing Laws for ESG Excellence

February 19, 2024
Greenwashing legislation

In today’s environmentally conscious landscape, companies face increasing scrutiny over their sustainability practices, but the challenge of greenwashing threatens the integrity of genuine efforts. In Canada, stringent legislative measures aim to ensure transparency and authenticity in corporate sustainability claims. A good portion of CSE’s flagship Sustainability Program for C-suite executives focuses on ESGs and Canadian greenwashing legislation.

Canadian Greenwashing Legislation and more

Canada’s primary weapon against greenwashing lies in the Competition Act, which prohibits false or misleading advertising, including deceptive environmental claims. The federal Bureau of Competition, responsible for enforcing the Act, emphasizes the importance of accurate and substantiated information in companies’ communications with consumers. However, recent developments have reshaped the regulatory landscape. The Canadian Standards Association’s (CSA) Environmental Claims Guide, once a cornerstone, has been archived since November 2021, leaving companies with less guidance in an era demanding greater accountability.
The Taxonomy Roadmap Report from the Department of Finance Canada underscores the urgency for companies to scale up climate investment rapidly, with a net-zero economy target by 2050. As Canada grapples with a climate investment gap estimated at $115 billion annually, companies face mounting pressure to set ambitious targets for reducing their environmental impact.

Examples of Greenwashing

  • Misleading Packaging: Companies boasting about sustainable practices may fall victim to greenwashing if their packaging contradicts these claims. Executives must ensure that product packaging aligns with the stated environmental commitment.
  • Ambiguous Language: Using terms like “100% natural” without clear substantiation can mislead consumers. Sustainability professionals should prioritize transparency and precision in language to avoid any misconceptions.
  • Incomplete Life Cycle Assessments: Executives need to conduct thorough life cycle assessments to avoid cherry-picking data that paints a rosier picture of a product’s environmental impact than is accurate.

Canadian cases of greenwashing

In Climate Case Chart, which provides a US climate change litigation database and a global one, under the category of “misleading advertising” in the global database, among the 56 cases listed, there are three about Canada. Firstly, Greenpeace Canada v. Shell Canada, claims that Shell’s Drive Carbon Neutral program violates the Canadian Competition Act by making false and/or misleading representations to the public. Secondly, Greenpeace Canada v. Pathways Alliance, alleging that the Pathways Alliance’s “Let’s clear the air” advertising campaign makes false and/or misleading representations to the public. Also, Amberg Corp. and Olga Kiiker, were charged with 25 counts for failing to comply with the Emissions Management and Climate Resilience Act and the Technology Innovation and Emissions Reduction Regulation.
The penalty for false or misleading representations can be as simple as a court ordering that the conduct in question stop or more serious, such as fines or even jail time.

Moreover, compliance with Canada’s legislation has become more challenging with the absence of updated CSA guidelines. Companies are now under heightened scrutiny with less direction. To address this gap, the upcoming Canada | Certified Sustainability (ESG) Practitioner Program, Leadership Edition 2024, offers a timely solution. Scheduled for April 18-19 & 22, 2024, this digital program with live Zoom sessions equips C-suite executives and sustainability professionals with essential knowledge on sustainability issues, providing a clear roadmap for making credible claims in areas such as recyclability, compostability, and carbon neutrality.

But still, in the face of evolving legislation and heightened scrutiny, companies must prioritize transparency to safeguard their reputations and bottom lines.
The Canada | Certified Sustainability (ESG) Practitioner Program offers a valuable opportunity for industry leaders to walk the talk, fostering genuine sustainability initiatives and avoiding the pitfalls of greenwashing.


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