Latest news with #antiGreenwashing
CTV News
8 hours ago
- Business
- CTV News
New tool to challenge greenwashing claims goes live as companies weigh strategy
Greenpeace activists protest BP's Calgary headquarters, alleging that the company's environmental claims contradicted its oilsands investments, on Thursday, April 15, 2010. The company sold its last oilsands holdings in CANADIAN PRESS/Jeff McIntosh. TORONTO — It's been a year now since a new law took effect that requires companies to back up their environmental claims, but there's still a lot of unknowns about how the anti-greenwashing rules will play out. What is clear so far is that they've already reduced what companies are choosing to say about their environmental record, even as the biggest source of worry for many — an option for the public to initiate claims — is only now kicking in. The pullback started as soon as the law came into effect on June 20 last year, when the Pathways Alliance group of oilsands companies scrubbed all content from its website and social media feeds. Since then there have been other high-profile moves blamed on the law, including RBC dropping its sustainable finance target and several climate metrics, and CPP Investments ditching its net-zero emission by 2050 target, but there have also been numerous other companies that have made quieter adjustments. 'I can say with 100 per cent certainty that many organizations across many industries in Canada are revisiting their disclosure,' said Conor Chell, national leader of ESG law at KPMG in Canada. 'There's a lot of disclosure that was pulled from the public domain.' Companies have raised concerns about the broad, vague wording of the provision in Bill C-59 that requires them to backup environmental claims with 'internationally recognized methodology,' and the threat of penalties of up to three per cent of global revenues if they're found to be in violation of the law. Many companies and groups have called for the additions to be scrapped, while the Alberta Enterprise Group and the Independent Contractors and Businesses Association have launched a constitutional challenge, alleging the law is a breach of freedom of expression protections. The Competition Bureau has tried to address at least the uncertainty of the law by providing guidelines, with a finalized version out just over two weeks ago. Some have said the guidelines are still too vague, while others like the Pathways Alliance say they provide no assurance at all, because the Competition Bureau isn't bound by them, while the Competition Tribunal doesn't have to adhere to them. And it's the Competition Tribunal that many companies are especially worried about. A clause in the law that went into effect Friday allows the public to bypass the bureau, and directly ask the tribunal to hear a case. 'From the perspective of many of our clients, the real risk lies in that private right of action,' said Chell. The clause has raised fears of a flood of cases against companies, tying them up in legal wrangling at the court-like tribunal, possibly for years, and the costs that come along with such disputes. 'We believe the amendments ... should be removed to allow businesses to speak openly and truthfully about what they are doing to improve environmental performance and without fear of meritless litigation by private entities,' said Pathways president Kendall Dilling in a statement. But environmental groups have played down the threat. Ecojustice finance lawyer Tanya Jemec said the narrative that there is going to be a wave of filings is overblown, since bringing a case is time consuming and resource intensive, while they will have to meet a public-interest threshold before being allowed to proceed. 'I think there is a lot of fearmongering going on out there, and efforts, whether intentional or not, to undermine these anti-greenwashing provisions.' Some, including Green Party Leader Elizabeth May, have questioned whether the new greenwashing laws were needed at all, given deceptive marketing practices were already covered by the Competition Act. But Jemec said the existing process takes years, with no updates along the way from the bureau, while being able to take cases to the tribunal will increase transparency and relieve pressure on the bureau. She said the reaction to the new laws, which also set elevated standards and penalties to the existing general protections, shows they were needed. 'The fact that companies are looking at what they are saying and changing course just may be an indication that the provisions are doing their work.' Pushing companies to make sure they can back up their environmental claims improves competition, by making room for those legitimately trying to do better, said Wren Montgomery, associate professor at Western University's Ivey Business School. 'It's often these smaller, newer, really sustainable, pure-play sustainability companies that the innovation is coming from,' she said, noting she's seen in sectors ranging from fashion to wine. 'In my research, we see that greenwash is driving them out, so it's making it really hard for them to get rewarded for bringing that value to the market.' Others, including Calgary-based clean-tech investor Avatar Innovations, have raised concerns that the higher reporting standards could hold back startups, both because of the compliance burden and the lack of established testing standards for emerging technology. Montgomery said there are many established standards, and more being added, to cover environmental claims. 'My larger concern is not that a reporting standard is going to inhibit innovation. It's that greenwashing is going to inhibit innovation, and I think the latter is a much bigger concern for Canada.' It's not just smaller companies affected. Chell at KPMG said that for a while every company was clamouring to get out net-zero targets for the competitive advantage, but that advantage kept fading as more and more did it. He said if the law works as intended, only companies that can actually substantiate claims will be able to do so, especially for those 'big ostentatious claims like net zero, carbon neutrality.' 'So there is actually, I think, a competitive advantage for companies that can make those claims and back them up credibly.' Whether the law is truly effective, or just forcing companies to say less out of caution, is still unclear, but it's certainly brought more focus to the problem, said Chell. 'If the intent was to draw attention to greenwashing as an issue, I would say that that objective has certainly been achieved.' This report by The Canadian Press was first published June 22, 2025. Ian Bickis, The Canadian Press
Globe and Mail
06-06-2025
- Business
- Globe and Mail
Competition watchdog finalizes anti-greenwashing guidelines for businesses
Canada's competition watchdog has finalized its guidelines for new federal anti-greenwashing provisions without imposing new rules but offering more indication of which corporate communications could be scrutinized. The Competition Bureau said on Thursday that it is unable to make changes to the legislation, which has been the subject of heated debate. The guidelines are designed to help businesses ensure compliance, it said. Companies, especially in natural resource industries, have complained the provisions prevent them from publishing anything about their environmental records and plans by putting them at risk of stiff penalties under the Competition Act. The guidelines follow two rounds of public consultation about the new provisions in the act, which came into force almost a year ago with the passage of Bill C-59. Is Ottawa's anti-greenwashing law helping or hurting Canadian companies? Companies are at legal risk for making environmental assertions that do not stand up to scrutiny. Corporate communications over such things as emission reduction plans and net-zero ambitions must be backed up by international standards. Individuals and companies could face sizable fines if found liable. Later this month, private parties will be able to make their own complaints to the federal Competition Tribunal in what is known as private right of action. The bureau said its guidelines, which closely follow a draft version, do not prescribe whether companies can make environmental claims. 'Companies are free to make any environmental claims they wish, as long as they are not false or misleading, and have been adequately and properly tested or substantiated where required,' it said in a statement. The finalized guidelines point out that provincial securities commissions, not the bureau, are responsible for securities regulation, and that disclosure requirements involving environmental factors are evolving. The agency said it will not review corporate filings made to regulators. The catch, said Beth Riley, a competition lawyer with McMillan LLP, is that some material risks come under scrutiny in a private action if disclosure is reused, for example, on a corporate website or other public forum to promote a business interest or product not connected with the sale of securities. 'The sense of accountability for disclosure is a good thing, but I think the legislation, these new greenwashing provisions, are a bit unwieldly,' Ms. Riley said. 'When you capture them with the private right of action that's been granted at the same time, without transition or any case law on the new greenwashing provisions, the bureau is no longer the watchdog, or the gatekeeper, of how to engage in claims.' Some large organizations have scrubbed their websites of environmental materials they had previously trumpeted. In recent weeks, the Canada Pension Plan Investment Board abandoned its net-zero carbon emission target, citing 'recent legal developments in Canada' that have changed how such commitments are interpreted, including requiring adoption of standardized metrics and interim emission-reduction targets. Its announcement came after Royal Bank of Canada dropped sustainable finance targets from its public communications, citing Bill C-59 provisions as one reason for the move. Some business groups as well as the Alberta government criticize the legislation as overreach, though supporters say corporate decisions to expunge materials show it is working. Still, environmental groups said they were disappointed the guidelines do not include more detail and practical advice for companies, as is the case in other countries. 'The recent changes to the act already appear to be weeding out greenwashing, but the federal government must continue to enact legislation and policy that mandate transparency and accountability from Canada's biggest polluters – as well as the financial institutions that enable them,' Matt Hulse, lawyer for the group Ecojustice, said in a statement. Deciding which standards are used to back up assertions are a top concern. The bureau said it will recognize methodologies deemed credible in two or more countries that result in 'adequate and proper substantiation.' Many of them will be based in science. Ms. Riley's colleague, Radha Curpen, McMillan's group head, sustainability and ESG, said several methodologies are widely recognized in areas such as tallying emissions and setting targets, including Greenhouse Gas Protocol, the International Organization for Standardization's life-cycle assessment and the Science Based Targets Initiative. The key for companies when publishing environmental materials is to make sure they are subject to internal controls and governance, and determine who in the organization needs to sign off, Ms. Curpen said. 'Lots of people have already started this, but they need to align disclosures with risk management frameworks and all that. And be prepared for what could be a private right of action,' she said.
