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The Impact of Canada’s New Greenwashing Law on Climate Marketing by U.S. Companies

“Canadian Crackdown on Greenwashing: New Law Raises Stakes for Companies”

The Canadian government has taken a significant step in the fight against greenwashing by amending the Competition Act to regulate environmental claims in marketing materials. This move comes as a response to the increasing pressure on businesses to be environmentally friendly and the rise in deceptive marketing practices related to green actions.

The new provision added to the Competition Act classifies environmental claims as within the scope of deceptive marketing practices. This means that companies making claims about protecting or restoring the environment or mitigating the causes or effects of climate change must now substantiate those claims in accordance with internationally recognized methodology. Failure to do so could result in heavy fines and legal consequences.

The Competition Act applies to both Canadian-based companies and foreign companies doing business in Canada. Enforcement is carried out by the Competition Bureau, similar to the U.S. Federal Trade Commission, and penalties can be civil or criminal.

The amendment has already led to some companies in Canada taking drastic actions to avoid potential violations. Pathways Alliance, a consortium of Canada’s largest oil sands producers, scrubbed their website and social media accounts in response to the new law. Other companies, such as lululemon athletica inc, have faced complaints from climate activists for allegedly engaging in greenwashing.

Climate activists are using the new provision to hold companies accountable for their environmental claims. By filing complaints with the Competition Bureau, activists are challenging companies to provide evidence to support their green actions. This increased scrutiny is expected to lead to more regulation and litigation in the coming years.

Overall, the new legislation in Canada aims to bring transparency and accountability to environmental claims made by businesses. Companies operating in Canada need to be aware of the new regulations and ensure that their marketing materials and sustainability reports are backed by credible evidence. Failure to comply could result in legal consequences and damage to their reputation.

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