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Canada Cracks Down on “Greenwashing” with New Environmental Claims Guidelines
Ottawa, ON (June 5, 2025) – The Competition Bureau of Canada has released its final guidelines aimed at preventing “greenwashing” – the practice of making misleading or unsubstantiated environmental claims about products and services. These new guidelines, published today, June 5, 2025, are set to significantly impact how businesses market their environmental credentials and are designed to help consumers make more informed and confident purchasing decisions.
What’s the Big Deal? Why New Guidelines?
For years, consumers have been bombarded with terms like “eco-friendly,” “sustainable,” and “green.” However, many of these claims lacked substance or were outright misleading. This practice, known as greenwashing, erodes consumer trust and hinders genuine efforts to promote environmentally responsible practices.
The Competition Bureau, responsible for enforcing competition and consumer protection laws in Canada, recognized the need for clearer rules. These guidelines are designed to:
- Provide Clarity: Give businesses clear, specific guidance on what constitutes an acceptable environmental claim.
- Protect Consumers: Ensure consumers are not misled by vague or unsubstantiated claims, allowing them to make informed choices based on accurate information.
- Promote Fair Competition: Level the playing field for businesses that are genuinely investing in environmentally sound practices by preventing those who make false claims from gaining an unfair advantage.
- Foster Environmental Responsibility: Encourage businesses to adopt more sustainable practices by making sure there is integrity in environmental claims.
Key Changes and What Businesses Need to Know:
The new guidelines cover a wide range of environmental claims, including those related to:
- Recyclability: How easily a product or its packaging can be recycled.
- Compostability: Whether a product can break down naturally in a compost environment.
- Sustainability: The overall environmental impact of a product’s lifecycle, from production to disposal.
- Carbon Footprint: The total amount of greenhouse gases emitted during a product’s lifecycle.
- Energy Efficiency: How much energy a product uses.
- Biodegradability: How quickly a product breaks down naturally.
Here are some of the key requirements outlined in the new guidelines:
- Claims Must Be Specific and Accurate: Vague or general terms like “eco-friendly” are no longer sufficient. Claims must be clearly defined and backed by credible scientific evidence. If something is partially sustainable or made with some recycled material, that needs to be specified.
- Claims Must Be Relevant to the Product or Service: The environmental benefit claimed must be a real and significant benefit to the environment related to the product in question. Claiming a product is recyclable when there are no facilities available to recycle it in most areas would be considered misleading.
- Claims Must Consider the Entire Lifecycle: Businesses need to consider the environmental impact of a product throughout its entire lifecycle, from raw material extraction to disposal. You can’t just focus on one small “green” aspect if the overall impact is still significantly harmful.
- Clear and Prominent Disclosure: Any qualifications or limitations to an environmental claim must be clearly and prominently displayed, not buried in fine print.
- Avoid Exaggeration: Claims must not overstate the environmental benefits of a product or service. Don’t imply a product is completely harmless to the environment if it has any negative impact.
- Compliance with Standards: Where applicable, businesses should adhere to recognized environmental standards and certifications (e.g., those related to organic agriculture, forestry, or energy efficiency).
- Testing and Verification: Ensure environmental claims are supported by credible testing and verification. This may involve third-party certifications or detailed documentation of testing processes.
What Happens If Businesses Don’t Comply?
The Competition Bureau has the power to investigate businesses that make misleading environmental claims. If found in violation of the Competition Act, businesses could face:
- Financial Penalties: Significant fines can be levied.
- Corrective Advertising: Companies may be required to run ads correcting their misleading claims.
- Cease and Desist Orders: An order forcing the company to stop making the false or misleading claims.
- Other Remedies: The Bureau may also seek other remedies to address the harm caused by the misleading claims.
Impact on Consumers:
These guidelines empower consumers to make more informed choices. By ensuring that environmental claims are accurate and substantiated, consumers can be more confident that they are purchasing products and services that genuinely align with their environmental values. They can also report companies that appear to be greenwashing to the Competition Bureau.
Moving Forward:
The release of these guidelines marks a significant step towards greater transparency and accountability in environmental marketing. Businesses are encouraged to review their existing marketing materials and practices to ensure compliance with the new rules. The Competition Bureau will be providing further resources and guidance to help businesses understand and implement the guidelines effectively. The intention is to encourage real sustainable practices, not just the appearance of them.
Competition Bureau issues final guidelines regarding environmental claims
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The following question was used to generate the response from Google Gemini:
At 2025-06-05 14:18, ‘Competition Bureau issues final guidelines regarding environmental claims’ was published according to Canada All National News. Please write a detailed article with related information in an easy-to-understand manner. Please answer in English.
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