Bill C-59: How your business can avoid greenwashing

Valérie Vedrines is President of Groupe Ecomarque, a consulting and sustainable marketing firm. She is also Founder and Chair of the Board of Masse Critique, a non-profit organization that offers solutions for adopting sustainable and responsible practices to Quebec’s communications, advertising and marketing industry. She explains greenwashing and explains what Bill C-59 means for your business.

What is greenwashing?

Greenwashing happens when a business gives false, misleading or unsubstantiated information about a product or service to make it seem more eco-friendly than it really is.

“There isn’t a product or service that doesn’t have an impact on the environment,” says Vedrines. “You need to consider the manufacturing process, the resources used, transportation. Greenwashing means that the promises made in the business’s communications strategy don’t line up with reality.”

One of the most well-known cases of greenwashing in Canada involved Keurig, which claimed that its single-use coffee pods were recyclable. However, municipal recycling programs didn't widely accept them outside Quebec and British Columbia. The company reached an agreement with the Competition Bureau in 2022 and had to pay a $ 3 million fine.

The risks of greenwashing for your brand

Whether you commit greenwashing or not, it can have repercussions for your business.

1. It undermines consumers’ trust in brands

“When consumers spot greenwashing practices, it erodes their trust in those brands,” explains Vedrines.

Greenwashing also creates confusion, which has an impact on brands that don’t commit it. According to a 2023 study by Deloitte, 57% of Canadian consumers don’t believe most sustainability claims that brands make about their products.

2. It compromises consumers’ decision-making autonomy

When consumers can’t distinguish between what’s true and false, it’s hard for them to make informed decisions about sustainability when purchasing products and services.

Furthermore, according to the same Deloitte study, 46% of consumers aren’t willing to pay extra for sustainable products, stating it’s hard to identify those that are genuinely sustainable.

3. It reduces the credibility of truly eco-friendly initiatives

Since greenwashing leads people to no longer believe environmental claims, it hinders businesses that truly market more sustainable products and services.

“What’s more, some businesses no longer want to risk making environmental claims out of fear that they’ll say the wrong thing and be accused of greenwashing,” says Vedrines. “That makes it difficult to build momentum.”

Is greenwashing illegal?

Yes, greenwashing is illegal. On June 20, 2024, when Bill C-59 received royal assent, key amendments were made to the Competition Act to promote a sustainable economy and make business practices more transparent. Before that, greenwashing wasn’t explicitly identified in legislation.

“With the introduction of this bill, Canada wants to reduce the spread of misleading or exaggerated information about the sustainability of products and services,” explains

Vedrines. “Businesses must now act responsibly when it comes to environmental communications and adhere to ethical standards.”

What are the new compliance requirements for businesses regarding environmental claims?

The new legislative provisions have led to major changes for businesses, regardless of their size. The burden of proof has been reversed. Before, the authorities had to prove that a business had violated the Competition Act with its environmental claims. Now, businesses must back up every environmental claim they make.

“Previously, as long as a brand didn’t flagrantly violate legislation in force, such as the Competition Act, it could make a claim about the environmental attributes of a product without having to prove it,” says Vedrines. “Certain ambiguous or slightly exaggerated claims were tolerated. Now, businesses have to provide proof, such as a study or recognized certification, for every environmental claim.”

Consider, for example, a business with new packaging that reduces a product’s carbon footprint by 30%. The business can no longer claim that it’s environmentally responsible or that it reduced its greenhouse gas emissions by 30%. “That’s too vague,” explains Vedrines. “The business now needs to specify the aspect of the product the claim applies to. So, in this case, it must explain that its new packaging reduces the product’s greenhouse gas emissions by 30%, and it needs to provide a life cycle analysis to prove it.”

Risks of making non-compliant environmental claims

Businesses that don’t comply with the new rules regarding greenwashing take financial risks. These risks include damage to their reputation, the loss of contracts and partners, and potential penalties.

“Previously, penalties and fines for misleading environmental practices were relatively low or rarely applied,” says Vedrines. “Now, fines are proportional to a business’s sales figure and can go as high as 3% of its global revenue.”

In addition, there are legal risks for businesses that don’t comply with the new legislative provisions.

“As of June 20, 2025, private parties, such as individuals, environmental groups and competitors, can file a complaint with the Competition Tribunal against a business suspected of committing greenwashing without having to prove that they have been directly harmed,” explains Vedrines. “That’s a real game changer.”

How to ensure that your business avoids greenwashing

1. Rely on a trained marketing team

The new legislative provisions entail major changes to the way marketing professionals work. The first step is to train them or, if they are external, ensure that they are well trained and know how to adapt their work accordingly.

2. Base your environmental claims on tangible proof

When you consider highlighting an eco-friendly aspect of one of your products or services in your marketing strategy, immediately think about how you can prove it. Each claim must be supported by rigorous studies or recognized certification.

To facilitate the process, develop a document management system that allows users to easily access the different kinds of proof associated with environmental claims.

“It’s very important for everything to be consistent, specific and measurable,” says Vedrines. “Avoid vague terms, such as ’green’ or ’sustainable.’ Provide specific and verifiable information about an aspect related to the product’s sustainability.”

3. Put in place an internal audit process

Consider implementing an internal audit process to ensure that all environmental claims in your ads and product labels are backed by evidence.

Ideally, you should also work with an independent third party to validate your approach. “It’s important to work with professionals who can give you an outside perspective of your practices,” says Vedrines.

4. Be transparent in your communications

Just because you have to prove your claims, you don’t have to wait for everything to be perfect before sharing environmental information with consumers.

“It’s important to explain the limits of your efforts,” explains Vedrines. “For example, if one aspect of your product isn’t sustainable, clearly state that to avoid misleading people. Then state why and explain what you’ve done to change the situation, even if a solution is still pending. The more transparent you are, the more trust you’ll be able to build among consumers.”

It can also be a good idea to allow consumers to ask questions on your website.

“Of course, you then need to make sure you answer in a transparent way. That will help you instill trust and show that your commitment is real.”

Under the new legislative provisions regarding greenwashing in the Competition Act, every business must provide tangible proof of its environmental claims. The aim isn’t to scare businesses but to help them create a climate of trust with consumers regarding environmental responsibility.

Make sure your teams understand the new legislative provisions and that they can adjust your business’s environmental claims accordingly. This will help you avoid the risks of non-compliance, boost the credibility of your sustainability efforts and build trust in your brand.