Canada Issues Final Guidance to Crack Down on Greenwashing in Business Claims

The Competition Bureau of Canada has released its long-awaited guidelines to help companies comply with strengthened anti-greenwashing laws, aimed at protecting consumers from misleading environmental claims.

The new rules require clear evidence and realistic plans behind any sustainability or environmental benefit claims — particularly those related to future goals like net zero by 2050. Vague or aspirational claims without proof are now considered potential greenwashing and could attract serious penalties.

The guidelines come after recent amendments to Canada’s Competition Act, which prohibit businesses from making environmental representations unless they are supported by “adequate and proper substantiation” based on internationally recognized methodologies. Companies making unverified claims can face fines up to $10 million (or more).

To be compliant, companies must now:

Have a verifiable plan with interim targets

Demonstrate meaningful progress

Use scientific evidence or third-party verification where applicable

The rules also apply to comparative claims, which must clearly state what is being compared and avoid exaggeration or vagueness.

Some major firms have already adjusted their marketing strategies. For example, RBC recently withdrew its $500 billion sustainable finance target due to the legal uncertainty introduced by these stricter standards.

The Bureau emphasized that green claims significantly influence consumer behavior and that the new guidance is designed to build transparency and trust in environmental marketing.

“Environmental claims matter to consumers and influence their decisions… Because these claims matter, it is important to get them right.”