Bill C-59’s Anti-Greenwashing Laws Prompt Major Reactions From Industry Groups
Bill C-59, a Canadian bill which includes new anti-greenwashing rules, took effect on June 20, 2024—and shortly after, major oil and gas businesses pulled nearly every marketing claim from their websites and other digital channels.
As dramatic a response as this may seem, Bill C-59’s requirements around environmental claims, and its penalties for non-compliance have companies scrambling to understand the full impact of this new law. Failure to comply with this legislation exposes businesses to enforcement action and greater public scrutiny.
Article 74.01 of Bill C-59 introduces three new anti-greenwashing measures. First, the bill expands on and makes explicit the existing prohibitions against deceptive environmental claims; such claims can now only be made based on “adequate and proper tests” or “internationally recognized methodologies.”
Second, private parties are now able to bring claims of deceptive greenwashing forward to the Canadian Competition Bureau. This could open the door to increased class action based on greenwashing claims. Finally, Bill C-59 also introduces a new certification mechanism designed to protect environmental collaborations from legal challenges.
Bill C-59 has also outlined what anti-greenwashing enforcement looks like.
This law allows the Competition Bureau to fine individuals up to CAD$750,000 or three times the amount of any financial benefit gained from greenwashing practices—whichever is greater.
Companies, meanwhile, could face fines up to CAD$10 million or three times the amount of any financial benefit gained—but if that figure is unknown, the company could be required to pay as much as 3% of their worldwide revenues.
That’s a significant financial risk, particularly when ambiguity remains over the certification processes and methodologies that businesses will be required to follow.
As such, the response to the bill has been divisive. While environmental agencies and non-governmental organizations have welcomed and applauded these powers and protections, industry has been far more critical.
Numerous parties have called out the bill’s language and scope, citing not only the potential for fraudulent and frivolous private claims but also vague language around what constitutes an environmental claim.
As mentioned earlier, while Bill C-59 requires environmental claims be substantiated according to accepted standards and “internationally recognized methodology,” it does not provide a clear definition of said methodology.
This has led to numerous industry members scrubbing marketing claims from their websites—not necessarily because the claims were false, but rather because they didn’t know if the data they had to support those claims met the government’s standard. For example, the oil and gas consortium Pathways Alliance replaced its website content with a disclaimer about Bill C-59’s anti-greenwashing measures. There are also concerns that Bill C-59 will stifle existing ESG disclosures in the sector.
The uncertainty over Bill C-59’s compliance requirements only underscores the need for a robust due diligence and sustainability mechanism. Being able to measure, document, and access data to support marketing claims in line with industry standards is vital to ensuring continued market access.
Centralizing and streamlining the availability of this data will put businesses in a better position to navigate the ambiguity and uncertainty around emerging laws and regulations, ensuring they can confidently address the requirements they face.
If you are looking for what are the key sustainability and sourcing laws that you should know, check out Achieving Sustainability In Your Supply Chain: Compliance for Global Brands & Retailers
