Bill C-59: Striking a Balance Between Greenwashing and Greenhushing

In 2024, global sustainability regulations have intensified, holding businesses accountable for their environmental and social impacts. These regulations focus not only on how companies measure sustainability but also on how they communicate it to stakeholders. With growing concerns about greenwashing—where companies make vague or misleading sustainability claims—consumers are finding it increasingly difficult to trust corporate environmental messaging. Misleading “green” claims create confusion, erode trust, and undermine efforts to address critical issues like climate change and pollution. This has led many countries, such as the United States, United Kingdom, Australia, and the European Union, to regulate how companies communicate their sustainability efforts, ensuring greater transparency and reliability.

In Canada, the focus has sharpened with the introduction of Bill C-59, which targets misleading environmental claims and strengthens regulations on sustainability reporting. This legislation emphasizes clarity and accuracy in corporate communications, aiming to build trust with consumers and reinforce responsible business practices. 

About Bill C-59 

Bill C-59, came into effect in June 2024 and it amends Canada’s Competition Act to address misleading environmental claims, often referred to as “greenwashing.” The bill empowers the Competition Bureau to target misleading claims that promote the environmental, social and ecological benefits of using or supplying a product if the claim is not based on an adequate and proper test (Section 74.01(1)(b.1)) and environmental claims that promote the environmental and ecological benefits of a business or business activity that are not based on adequate and proper substantiation in accordance with internationally recognized methodology (Section 74.01(1)(b.2)). The legislation also enables private parties to bring cases against companies beginning in mid-2025.  

The Bill introduces significant monetary penalties for violation of these provisions. An administrative monetary penalty (AMP) can be assessed against a corporation for the greater of $10 million for the first violations and $15 million dollars for any subsequent violation, and 3% of the corporation’s annual worldwide gross revenues. 

How Companies Can Avoid Fines 

With increased scrutiny on corporate sustainability claims, it’s crucial for companies to disclose Sustainability plans and targets in a detailed, clear, and actionable manner. Establishing proper baseline measures and methodologies to track progress, along with evidence of ongoing actions, is essential.  

To avoid penalties, companies should:

• Develop Clear, Detailed Sustainability Plans: Ensure plans are specific, measurable, and achievable, with accessible resources and technologies, and clear evidence of progress.

• Verify All Claims: Use scientific evidence and recognized standards to substantiate environmental statements. 

• Conduct Regular Audits: Regularly review marketing materials, packaging, and product descriptions for accuracy. 

• Stay Informed: Follow the latest guidance from the Competition Bureau and avoid vague or exaggerated claims. 

• Be transparent: Acknowledge the areas that need work in your company and how you plan to improve them 

• Keep Documentation: Keep comprehensive records, such as life-cycle assessments, certifications, and testing data, to provide an audit trail for all claims. 

• Seek a third-party certification. This can help add trust to your organization 

By implementing these practices, companies can protect themselves from potential fines and build stronger trust with consumers and stakeholders. 

Perspectives on Bill C-59 

The Bill C-59 has provoked different perspectives, proponents argue that the bill is a necessary step toward greater transparency and consumer protection. They believe it will curb misleading practices and promote genuine sustainability efforts by requiring companies to back their claims with solid evidence. However, critics contend that the regulation could have unintended consequences, such as discouraging companies from communicating their sustainability initiatives altogether—a phenomenon known as “greenhushing.” I fear of facing penalties for making claims that might be perceived as misleading, some companies may choose to underreport or avoid disclosing their environmental efforts, limiting transparency and potentially slowing progress on climate goals. 

As the regulatory landscape around sustainability continues to evolve, the full impact and unintended consequences of Bill C-59 remain uncertain. However, this legislation marks a significant step in Canada’s commitment to transparency and consumer protection. It reinforces the need for honesty and clarity in corporate environmental claims, urging companies to verify their statements, maintain robust documentation, and prioritize transparency. By doing so, businesses can avoid legal risks and build stronger trust with consumers and stakeholders. Currently, Bill C-59 plays a pivotal role in advancing the solution by driving more transparent and authentic sustainability efforts, ensuring companies back their claims with real, measurable actions. In this new era of accountability, genuine action and transparent communication are not just regulatory requirements — they are key to long-term success.