How To Avoid Greenwashing in Canada

Climate change and the environment remain an urgent global issue across all sectors. Accordingly, brands are inventing changes to reduce their environmental impact and differentiate themselves on that basis. How can advertisers talk about it without greenwashing? Stay on the right side of the law in Canada when it comes to your green advertising by following these important legal requirements.

What is green advertising?

Let’s get to the same page about this problem first. Green advertising is any representation, whether verbal or implied, of the environmental impact of a product or service. This includes claims touting positive environmental impacts, meeting specific environmental standards or certifications, claims of harm reduction, and comparisons between the environmental impacts of previous versions of the same product/service or those of competitors.

In Canada, the importance of an ad is measured by its literal meaning and the “overall impression” it creates. Courts will take the perspective of a “credible,” “hasty,” and “inexperienced” viewer looking at the ad just once when determining overall impression. This is a fairly low level of sophistication for the viewer and places a heavy burden on the advertiser to ensure that the advertisement is clear and accurate.

What Canadian laws apply to green advertising?

Canada has no specific laws regulating green advertising. Instead, the general prohibitions on false or misleading advertising apply. For key state advertising regulations, see the Deceptive Marketing Practices section of the competition lawRSC 1985, cC-34.

Most important is the general prohibition on making a materially false or misleading representation. This provision is considered both a civil prohibition with administrative appeals and a criminal offense. The crime is also a gateway for private prosecution, allowing individuals and other organizations to sue for damages. There is also a specific provision that requires claims for benefits to be supported by “reasonable and proper” justification. This requires advertisers to have the support for their claims in hand before publishing them.

In the summer of 2022, penalties for non-compliance with the civil misleading advertising provisions of the Competition Act were significantly increased. The new maximum penalty for businesses is the greater of (i) $10 million ($15 million for each additional violation) and (ii) three times the value of the benefit derived from the fraudulent conduct. If the amount in (ii) cannot be reasonably determined, the maximum penalty may be up to 3% of annual worldwide gross revenue. Previously, corporate penalties were capped at $10 million and up to $15 million for each additional violation.

What self-regulatory codes apply to green advertising in Canada?

That Canadian Code of Advertising Standards is the self-regulatory code of the advertising industry in Canada and is administered by Ad Standards. It contains clauses that parallel legal prohibitions, including requirements that advertising must be clear and accurate, and that claims be supported by “competent and reliable evidence”. Also relevant to environmental claims are the clauses prohibiting misleading consumers through fear and requiring that scientific or professional claims be Canada-specific and not biased.

Are there administrative “green guides” in this area?

The Federal Competition Bureau is the independent law enforcement agency responsible for administering and enforcing competition law.

In December 2021, the Competition Office archived its 2008 guidelines, Environmental claims: A guide for industry and advertisers, which was developed in cooperation with the Canadian Standards Association. This ‘green guide’ gave a detailed overview of different types of environmental claims and provided guidance on the support needed to justify them.

This green guide from 2008 is still helpful in identifying potential problems and rationale. However, the Competition Authority believes that it does not reflect current standards or environmental concerns and therefore no longer reflects current federal enforcement in this area.

In its place, the Competition Bureau has published the higher-level guidelines Environmental claims and greenwashingwhich recommends the following best practices:

  • Avoid vague claims like “environmentally friendly” or “environmentally friendly” that can lead to multiple interpretations, misunderstandings and deception
  • Make sure claims are truthful and not misleading
  • Be specific about the environmental benefits of your product
  • Claims must be tested and all tests must be fair and accurate
  • do not lead to misinterpretations
  • Don’t exaggerate the environmental benefits of your product
  • do not imply that your product is endorsed by a third party organization if it is not

Ad Standards Interpretation Guideline #3 – Environmental Claims applies to his cases with green claims. When assessing environmentally friendly advertising, the Ad Standards decision-making body (Standards Council) can therefore take the ICC into account Framework for Responsible Environmental Marketing Communicationsas well as the applicable administrative guidelines of the competition office.

take that away? Consumers are now more interested than ever in green innovations – but green advertising is risky if not done right. Make sure your green claims aren’t vague or embellished and that they actually match your support.

Consumers are now more interested than ever in green innovations – but green advertising is risky if not done right. Make sure your green claims aren’t vague or embellished and that they actually match your support.

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