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Canada’s Competition Bureau Releases Digest on Greenwashing Provisions

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Canada’s Competition Bureau (the Bureau) today released a new edition of the Deceptive Marketing Practices Digest (the Digest) that addresses environmental claims. The new edition aims to provide the Bureau’s general perspective on environmental claims and offers a foundation to understand the issues around environmental claims in general and how businesses can comply with the provisions of the Competition Act already in place prior to the new greenwashing provisions of the Competition Act, which were implemented on June 20, 2024 (see our earlier bulletin here). The Bureau also launched a public consultation to gather input from Canadians on specific questions related to the new amendments in advance of new guidance. Feedback is due by September 27, 2024. This bulletin briefly summarizes the key points arising out of the Digest: Environmental claims. The Bureau’s perspective is that an environmental claim is any representation related to the environment that has been made for the purposes of promoting a product or business interest. Environmental claims can be about physical products as well as services, processes, and business practices. Greenwashing. Greenwashing means, in the context of the Bureau’s work, environmental claims that are deceptive because they are false, misleading, or not adequately and properly tested or substantiated. The Bureau has historically received complaints about greenwashing in a number of categories: Composition claims (i.e., what is in a product or its packaging); Claims about the production process of products; Claims about the disposal of products after use; Comparison claims; Vague claims; and Claims about the future (e.g., carbon neutrality by a certain date; investments in environmental projects, etc.). Tips for businesses. The Bureau outlines the following tips for businesses considering making environmental claims: Be truthful, and not false or misleading. Ensure claims are properly and adequately tested. Comparative claims; be specific about what is being compared. Avoid exaggeration.  Avoid vague environmental claims in favour of clear and specific ones.…

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Climate-related Amendments to the Competition Act Become Law as Bill C-59 Receives Royal Assent

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The Fall Economic Statement Implementation Act, 2023 (Bill C-59) yesterday received royal assent, implementing (1) key climate-related “truth-in-advertising” amendments to the Competition Act and (2) two important investment tax credits (ITCs) for clean technology and carbon capture utilization and storage. Omnibus Bill C-59 was introduced in the House of Commons in November 2023 (and amended several times since then) to implement certain provisions of the Fall Economic Statement (FES) tabled in Parliament in November 2023 (see our earlier bulletin here) and certain provisions of the budget tabled in March 2023 (Budget 2023) (see our earlier bulletin here). This bulletin summarizes the climate-related amendments to the Competition Act. A subsequent bulletin will cover the ITCs. Deceptive marketing practices. Part VII.1 of the Competition Act sets out a number of deceptive marketing practices that are considered “reviewable conduct” under the legislation, and therefore subject to scrutiny by the Competition Tribunal and the courts and related administrative remedies. For example, section 74.01(1)(a) contains a general prohibition on representations to the public that are materially false or misleading, and made for the purpose of promoting the supply or use of a product or a business interest (directly or indirectly). Where the Competition Tribunal or a court determines that a corporation is engaging (or has engaged) in reviewable conduct, it may order the corporation: not to engage in the conduct or substantially similar reviewable conduct; to publish a notice providing a description of the reviewable conduct and related details; and to pay an administrative monetary penalty in an amount not exceeding the greater of $10M (and, for each subsequent order, $15M) and three times the value of the benefit derived from the deceptive conduct (or 3% of the corporation’s annual worldwide gross revenues, if such an amount cannot be reasonably determined). Bill C-59 amendments. The…

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Dutch Court Rules KLM Misled Customers and Engaged in Greenwashing

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The District Court of Amsterdam (the Court) recently released its decision on alleged ‘greenwashing’ claims against Dutch airline KLM (the Decision). The Court found that 15 of the 19 impugned KLM advertising statements and environmental claims were unlawful and misleading to consumers. Specifically, the Court held that it was misleading and unlawful for KLM to make advertising statements suggesting that (i) flying can be or become sustainable, and (ii) the purchase of or contribution to a “compensation” product actually reduces, absorbs or compensates for part of the climate impact of flying. This bulletin briefly summarizes the background of the case and important aspects and implications of the Decision. Background. Dutch environmental groups Fossielvrij Netherlands (Fossil Free Netherlands) and Reclame Fossielvrij (Fossil Free Advertising) (together, FF), supported by ClientEarth, an international environmental advocacy organization, delivered a letter to KLM in May 2022 stating their intention to file a legal claim if their demands, including calling for a ban on all fossil fuel advertising in the EU, were not met. FF and ClientEarth indicated that they were targeting KLM’s ‘Fly Responsibly’ ad campaign and the airline’s offers for customers to purchase carbon offsets to fund reforestation projects or the purchase of biofuels to offset the emissions from a customer’s flight. FF filed a ‘greenwashing’ lawsuit against KLM in July 2022, alleging that the airline’s climate-related advertising misled the public and challenging KLM’s carbon offsetting marketing, which purported to allow customers to reduce the carbon impacts of their flights by supporting reforestation projects or the purchase of small quantities of biofuels and Sustainable Aviation Fuel (SAF). Court’s Findings and Decision. The Court considered 19 statements made by KLM in connection with its ‘Fly Responsibly’ and ‘CO2ZERO’ marketing campaigns and ‘KLM Real Deal Days’ promotion campaign under the Dutch Unfair Commercial Practices Act and…

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