Greenwashing Laws

The Bureau’s new powers allow it to review environmental marketing tactics commonly referred to as “greenwashing”:  environmental claims that are false, misleading or are not supported with adequate proof.

While the Bureau has previously reviewed such claims using their existing powers to review deceptive statements (see the Bureau’s $3 million settlement re: Keurig’s coffee pod recycling claims), new subparagraphs 74.01(1)(b.1) and (b.2) grant the Bureau expanded powers to tackle greenwashing concerns.

First, the Bureau has the power to review statements, warranties or guarantees about a product’s benefits for “for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change” if that statement is not based on adequate and proper testing.  Second, the Bureau has the power to review similar representations about a business or business activity if the statement is not based on “adequate and proper substantiation in accordance with internationally recognized methodology”.

It is important to note the new laws only affect representations made to the public.  The burden is on the business making theclaim to demonstrate there has been an adequate and proper test or substantiation.

Public Consultation

With great power comes great responsibility, and the Bureau is looking for input from the public on how it should use its new powers.  In particular, the Bureau has asked what challenges businesses may face in demonstrating they have “adequate proof”, what testing methods should be used (and their limitations), and what obstacles might businesses face when trying to comply. 

This is a great opportunity for businesses, including direct selling companies, who may make eco-friendly claims about their business or their products, to communicate their concerns and opinions to the Bureau in a way that might help shape enforcement policy. 

Interested parties should submit their feedback to the Bureau by September 27, 2024.

Takeaways

Businesses should be aware of the Bureau’s new greenwashing powers, and keep in mind its existing broad powers to review deceptive statements. It is particularly important for marketing/advertising teams to be aware of when preparing representations about your business or products to the public.

Legal counsel can advise businesses about compliance with these laws and help in the event the Bureau commences an investigation. 

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