On June 5, 2025, the Competition Bureau (Bureau) released its highly anticipated final guidance Environmental claims and the Competition Act (Environmental Claims Guidance) – almost a full year after the implementation of the Competition Act (CA) prohibitions on greenwashing, i.e., claims about the environmental benefits of a product, business or business activity (Environmental Claims) that are false, misleading or improperly substantiated. The Environmental Claims Guidance replaces the Environmental Claims: A Guide for Industry and Advertisers published in 2008 and archived in 2022.
Unlike its 2008 counterpart, and the US Federal Trade Commission’s Green Guides, the Environmental Claims Guidance is not a “how-to guide.”
Instead, the Bureau has made it clear that it is not an environmental agency and cannot specify the manner in which any particular Environmental Claim should be substantiated. Rather, it is the role of the courts to interpret the greenwashing prohibitions and determine whether specific Environmental Claims constitute greenwashing.
Accordingly, instead of prescriptive guidelines, the Environmental Claims Guidance provides an overview of how the Bureau could prove greenwashing in court—i.e., the elements of the cause of action—and in turn, how businesses can mitigate the risk of post-market enforcement. Accordingly, the industry is left in a wait-and-see period of uncertainty, where only time (and case law) will tell what types of Environmental Claims will be the focus of enforcement and what manner of evidence will or will not be considered adequate and proper to support these claims.
Elements of the greenwashing prohibitions
Where a representation is made to the public by a business for the purposes of promoting a product, business or business activity (Representation), the Bureau will approach enforcement as follows:
- Representations, including Environmental Claims, cannot be materially false or misleading (CA, s. 74.01(1)(a)): This general provision applies to all representations, including Environmental Claims. The Bureau will need to prove that (i) the Representation was made; and (ii) it was false or misleading in a material respect, i.e., in a manner that could influence a person’s decisions. A business can defend against such a finding with supporting evidence that the Representation is true, both literally and in the general sense.
- Environmental Claims about a product, business or business activity must be adequately and properly substantiated (CA, ss. 74.01(1)(b.1-b.2): The Bureau must be able to prove that (i) the Representation was made; and (ii) it contained an Environmental Claim. At this juncture, the business who made the Representation must be able to prove that it is supported by adequate and proper evidence, specifically, if the Environmental Claim is about a:
- Product, it must be supported by adequate and proper testing.
- Business or business activity, it must be adequately and properly substantiated in accordance with an internationally recognized methodology.
Principles for compliance
The Bureau does not provide examples as to what constitutes adequate and proper testing or internationally recognized methodologies, and, again leaves this for the courts to decide. Nevertheless, the Environmental Claims Guidance provides six principles for compliance, which, when implemented, may help businesses avoid greenwashing allegations:
Principle 1: Environmental claims should be truthful, and not false or misleading.
Principle 2: Environmental benefits of a product and performance claims should be adequately and properly tested.
Principle 3: Comparative environmental claims should be specific about what is being compared.
Principle 4: Environmental claims should avoid exaggeration.
Principle 5: Environmental claims should be clear and specific – not vague.
Principle 6: Environmental claims about the future should be supported by substantiation and a clear plan.
Despite these valuable principles, businesses seeking clarity and certainty around Environmental Claims will need to wait until such claims are tested before the Competition Tribunal or the courts. In the interim, the Dentons Canada team continues to provide practical greenwashing risk mitigation advice. Please contact Yulia Konarski and Emma Fillman if you have any questions regarding making Environmental Claims in Canada.
