There’s a lot of buzz right now about new rules that crack down on greenwashing – and the backlash from oil and gas companies.
Last month, Bill C-59 – an omnibus budget bill – passed through Parliament. Bill C-59’s amendments introduced new language to strengthen the rules and penalties around false or misleading environmental claims, ie. greenwashing. The night before the bill passed, Big Oil lobby groups and several companies scrubbed their websites and social media of climate and environmental content, demonstrating they were not prepared to defend their climate-friendly claims. So what’s all the fuss about?
Bill C-59 brought into effect a wide range of provisions, including some amendments to existing legislation. What’s relevant to this story are some specific amendments to the Competition Act. The Competition Act regulates consumer protections, corporate competition and fairness, and is enforced by an independent agency, the Competition Bureau. The Competition Bureau had asked for stronger and more clear legal tools to help it better respond to the growing number of greenwashing cases. The changes were also supported by health and environmental organizations concerned about rampant misinformation being disseminated to the public, especially by oil and gas companies.
Here’s what the amendments have changed.
- Proof for Environmental Claims
First, companies must be able to substantiate claims they make about environmental or climate benefits. Simply put, this means they’re not allowed to lie and must prove they’re telling the truth with evidence.
Before, when the Competition Bureau was investigating a company – like the current investigations into Enbridge or the Pathways Alliance for greenwashing – it would be up to the Competition Bureau to prove the company’s claims were false. It was a lengthy process and challenging for an external party to access the information necessary to do so. With the changes to the Competition Act, the burden of proof falls on the companies if they’re being investigated for greenwashing. This really shouldn’t be an issue because any company that is advertising based on environmental credentials or a climate plan or commitment should already have those credentials or plans as proof. This applies to companies of any industry.
Despite this being a pretty low bar, the oil and gas industry is throwing a fit about it, which says a lot about their ‘net-zero’ and climate-friendly marketing.
The Pathways Alliance responded by taking down all the information from its website and replacing it with a note about the bill. They also removed the videos from their YouTube channel, which included advertisements they had been heavily promoting about their “plan for net-zero emissions” that had each received millions of views. Other oil and gas companies and industry groups similarly removed content about climate action and posted legal disclaimers on their websites, some directly criticizing the bill.
The industry is, in part, blaming their website wipe on supposed “uncertainty” about a new requirement that their evidence aligns with “internationally recognized methodologies.” What that legal speak really means is that companies can’t make up their own process for validating climate action. For example, if they claim to be “net zero”, they have to follow an agreed-upon definition. This is important because companies have a history of using bogus definitions for terms like “net-zero” and “sustainable”. Here’s the thing: there are lots of internationally recognized methodologies out there, and the Competition Act language is framed this way to offer flexibility to companies in their evidence, rather than being overly restrictive. Furthermore, the Competition Bureau has said it will work with companies to avoid any confusion and will be releasing further guidelines soon. But Big Oil is misrepresenting this requirement to bash the new rules.
- Including brand marketing, not just products
Greenwashing laws previously only applied to specific products. The amended Competition Act extends the greenwashing regulations to include statements and overall advertising about a company or brand. This is important because most marketing campaigns now focus on overall branding rather than specific items. For example, oil companies rarely ever promote the actual oil; they promote the company, and increasingly, they promote themselves as part of a clean energy or net-zero future.
- Faster and more accessible avenues for justice
Finally, the new rules also allow consumers to help stop greenwashing when they spot it by taking complaints directly to the Competition Tribunal.
For clarity, the Competition Bureau is only responsible for investigating cases. The Competition Tribunal, which also operates independently from the government, hears the cases, makes judgments or decisions, and can issue remedial orders. The Competition Tribunal is only for cases related to the Competition Act, from business mergers to trade practices to deceptive marketing.
The right for individuals or organizations to take action against corporate greenwashing will come into force in one year. This is helpful because the Competition Bureau is already taking a long time to investigate a number of high-profile cases before the cases even go to the Tribunal for a decision. Now that the Competition Tribunal can directly accept claims of legitimate concern, we’re hopeful that cases will be addressed much faster.
The new changes won’t completely solve greenwashing. Fossil fuel companies can still pollute the air with their emissions and airwaves with their advertisements. However, it does strengthen our current tools to stop the spread of misleading information on climate change.
