TLDR
- Canada’s Competition Bureau has updated the guidance after changing the Competition Act last year regarding environmental claims for businesses of all sizes
- Changes include increased requirements and transparency around sustainability efforts and environmental benefit claims, requiring alignment to widely recognized standards and more specific claims.
- For future facing claims, companies need to back them with a validated plan
- Following these provisions can reduce legal risk and prevent financial penalties up to 5% of a company’s annual revenue
Consumers increasingly expect businesses to operate sustainably and transparently. In response, Canada’s Competition Bureau has updated the Competition Act with new provisions focused on environmental claims. The updates introduce new provisions targeting environmental claims about products and business activities, requiring that such claims be backed with proper testing or internationally recognized methodologies.
These changes emphasize the importance of truthful, evidence-based, and data-driven messaging and holding businesses accountable if they choose to mislead or exaggerate green claims, also known as greenwashing.
Why do the Competition Act Guidelines matter?
How can companies stay compliant with Bill C-59?
There are a number of items companies should know before choosing to make public environmental claims around their products and services or share their sustainability efforts:
- Be Truthful and Transparent: Environmental claims must be true not just in their wording, but in the overall impression they leave with consumers. Misleading general impressions can still be a violation of the Competition Act.
- Back Claims with Evidence: Performance and environmental benefit claims must be supported by adequate and proper testing conducted before making them public. For business-level environmental claims, substantiation must follow internationally recognized methodologies.
- Be Specific with Comparisons: If making a comparative claim, clearly state what’s being compared and explain the scale of difference. Vague or implied comparisons risk misleading consumers.
- Avoid Exaggeration: Don’t overstate the positive environmental impact. Even well-intentioned statements can mislead if they imply a larger benefit than is supported by evidence.
- Stay Clear and Specific, Not Vague: Avoid vague terms like “eco-friendly” unless the claim is substantiated across the product’s full life cycle. Be clear about whether a claim applies to a part or the whole of a product or business.
- Support Future-Facing Claims with a Concrete Plan: Ambitious claims (e.g., “net-zero by 2040”) must be backed by a realistic, verifiable plan and interim targets. Businesses should already be taking meaningful steps and be able to demonstrate their progress.
By following these principles, businesses not only reduce legal risk and prevent financial penalty, but they also build greater trust with consumers, strengthen brand integrity, and demonstrate an authentic commitment to sustainability.
C-59 in action: Need support substantiating your sustainability claims?
Navigating these new guidelines requires more than just good intentions. It requires solid data. Working with a Carbonhound, a greenhouse gas emissions reporting platform that follows internationally recognized standards (such as the GHG Protocol and ISO 14064) can help ensure your environmental claims are credible, and compliant. Get in touch today to get started on your compliant climate journey at hello@carbonhound.com
Join Carbonhound and Osler, Hoskin & Harcourt LLP for a live webinar where we’ll discuss the guidelines on July 8, 2025 →
