The Competition Bureau, an independent competition regulator of Canada, has released its final guidelines on environmental claims under the revised Competition Act. The guidelines are designed to help companies comply with new anti-greenwashing regulations when making environmental claims about their products or operations.
With the release of final anti-greenwashing guidelines, private market investors, asset managers, and companies with sustainability-linked financial products may need to reassess ESG claims, product labeling, and communications across channels.
Let’s explore the Competition Bureau’s final guidelines on environmental claims in detail.
About the final guidelines on environmental claims
Initially, the consultation on new anti-greenwashing guidelines began in July 2024. After two public consultations with 400 stakeholders, the Bureau finalized and released its long-awaited final guidelines on June 5, 2025.
The final guidelines mandate that any environmental claim about a product or business activity must be substantiated with adequate and proper testing or internationally recognized methodologies, ensuring that claims are truthful and not misleading.
Companies are free to promote sustainability but must back up their statements with solid evidence, especially for claims about future goals like net-zero emissions, which require a concrete, realistic, and verifiable plan with interim targets.
“Environmental claims matter to consumers and influence their decisions. This is part of the reason why businesses make environmental claims in the first place. Because these claims matter, it is important to get them right. These guidelines provide businesses with tools to help them do just that.” mentioned the Bureau in the announcement statement.
Key aspects of Canada’s new anti-greenwashing guidance
Legal Foundation and Scope
The updated guidance stems from amendments to Canada’s Competition Act introduced through Bill C-59 in 2024. These changes directly address false or misleading environmental claims—commonly referred to as greenwashing. The rules apply broadly to all businesses operating in Canada, regardless of their size or industry.
What Companies Must Now Demonstrate
Any environmental claim—such as describing a product as “eco-friendly” or declaring a commitment to net zero—must be supported by credible, verifiable evidence. Specifically, companies are expected to:
- Provide testing or validation based on internationally recognized methods.
- Back future goals with clear, realistic transition plans, including interim targets and proof of progress
- Ensure all sustainability messaging across advertising, packaging, digital content, and investor materials is grounded in scientific data.
Enforcement and Penalties
The Competition Bureau now has enhanced authority to pursue enforcement against greenwashing. Penalties for non-compliance include:
- Up to $10 million for a first offense
- Up to $15 million for repeat violations
- Or up to 3% of global annual revenue, whichever amount is greater
Additionally, from June 20, 2025, private parties—including advocacy groups and individuals—will be permitted to initiate legal proceedings against companies for misleading environmental claims.
The Role of Due Diligence
Businesses may rely on a due diligence defense if they can demonstrate that they took reasonable steps to avoid making deceptive claims. However, good intentions alone are not sufficient. Companies must have robust documentation, internal controls, and oversight mechanisms to support their marketing practices and environmental disclosures.
Feedback on the final guidelines on environmental claims
Advocacy organizations, such as Greenpeace Canada, have welcomed the new enforcement powers and signaled their intent to actively pursue legal action—particularly against companies in high-emission sectors such as oil and gas.
In response, many businesses have already begun reassessing their public-facing sustainability messaging. Some have scaled back or revised environmental claims to ensure alignment with the new standards.
Legal and compliance teams may have to look closer at ESG communications, marketing materials, and corporate disclosures to mitigate the growing risk of litigation and reputational harm under Canada’s tightened greenwashing regime.
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