Greenwashing<\/a> is when companies make misleading claims<\/a> about the eco-friendliness of their products or actions \u2014 making their environmental stewardship appear greater than it is. Lawmakers added the anti-greenwashing provisions to the federal Competition Act last year in part to address the issue<\/a> of companies advertising that they were headed towards net-zero emissions while not presenting evidence showing they were taking any significant steps toward cutting their carbon pollution.<\/p>\n But now, the government believes companies are \u201cwithholding information that could aid in attracting investment for green innovation,\u201d a departmental spokesperson said. Carney\u2019s budget claimed<\/a> the anti-greenwashing law, brought in under former prime minister Justin Trudeau, was leading to \u201csome parties slowing or reversing efforts to protect the environment.\u201d<\/p>\n When asked by The Narwhal, the federal department couldn\u2019t name any specific examples of companies slow-walking genuine environmental efforts as a result of last year\u2019s legal changes \u2014 which deal specifically with marketing unsubstantiated green claims, and not environmental action itself.\u00a0<\/p>\n One expert says any legal risks are being massively exaggerated. Wren Montgomery, co-founder of the Greenwash Action Lab<\/a> and professor at the Ivey Business School at Western University, believes awareness of how to comply with the law is already fairly widespread \u2014 and the companies still complaining may simply want to avoid being held accountable<\/a> for their lack of climate action.<\/p>\n \u201cThe only lawyers I\u2019ve heard complain about it are the lawyers actually working in these corporations,\u201d Montgomery said. \u201cSo it seems either just that [corporate lawyers] are too thinly spread, and don\u2019t really understand competition law or sustainability reporting very well, or that they\u2019re using it as an excuse.\u201d<\/p>\n The government\u2019s remarks come on the heels of a Nov. 16 open letter<\/a> released by Clean50, a collective of sustainability leaders, and signed by 144 of its members in business, academia, politics and the environmental sector calling on Carney to do more to tackle the climate crisis \u2014 including reversing plans laid out in the budget to dismantle some of Canada\u2019s anti-greenwashing rules.<\/p>\n The letter says it\u2019s the Carney government\u2019s proposed changes to the law, and not the law itself, that will undermine investor confidence and harm Canadian entrepreneurs who had already adapted to the changes.<\/p>\n \u201cRenewed greenwashing can distort competition and act as a barrier to entry to genuine green firms or drive them from the market,\u201d the letter reads.<\/p>\n It also comes as Canada signs on to an international pledge<\/a> to combat climate disinformation that commits to \u201cequitable access to accurate, consistent, evidence-based and understandable information on climate change.\u201d<\/p>\n Fossil fuel companies pushed back on Canada\u2019s anti-greenwashing law<\/p>\n The Carney government\u2019s concerns about the law revolve around a requirement added to Canada\u2019s Competition Act last year<\/a> for businesses to back up their environmental claims with evidence that conforms to internationally recognized standards<\/a> for calculating a company\u2019s carbon footprint.<\/p>\n The budget argued the requirement to adhere to internationally recognized standards, as well as another rule allowing private individuals or organizations to bring greenwashing complaints before a tribunal, were \u201ccreating investment uncertainty\u201d and \u201chaving the opposite of the desired effect.\u201d It proposed getting rid of both rules, while keeping the base requirement for businesses to substantiate their environmental claims.<\/p>\n The federal Competition Bureau, which enforces fair competition in the marketplace, says deceptive marketing about environmental efforts can lead to a distorted playing field where Canadian consumers make ill-informed choices<\/a> with their money. A spokesperson for the Competition Bureau said they were aware of the Carney government\u2019s proposed changes to the law, but declined an interview request from The Narwhal.<\/p>\n In Canada, voluntary disclosure standards for including environmental risk in financial statements, developed based on internationally recognized criteria<\/a>, refer to a framework called the Greenhouse Gas Protocol<\/a>. Other jurisdictions like the United States have put in place similar requirements<\/a> that green claims be grounded in evidence from relevant scientific fields or verifiable criteria.\u00a0<\/p>\n In June, the bureau issued guidelines<\/a> for organizations navigating Canada\u2019s anti-greenwashing rules, saying it would accept any carbon accounting standard recognized in at least two countries.<\/p>\n Montgomery said consultants and lawyers who have been working on sustainability reporting have told her they were already aware of what green accounting standards to use, or were already incorporating them into their work. She said it was important to stick to internationally recognized standards because of the risk of industry using third-party certification methods<\/a> that could prove dubious.<\/p>\n The government has the option of strengthening the law, Montgomery and other greenwashing experts have argued<\/a>, instead of repealing parts of it. Ottawa could change the language around the use of standards, the experts said, such as removing the \u201cinternational\u201d requirement or specifying precisely which standards to use.\u00a0<\/p>\n Suspending the third-party right of action until those changes were made, instead of cancelling it permanently, would be a way to provide clarity without stripping away the law\u2019s purpose, they added.<\/p>\n Federal government unable to name examples of decline in corporate environmental efforts<\/p>\n The government\u2019s concerns over uncertainty in the law echo complaints lodged by large oil and gas companies in Canada last year, many of which said the anti-greenwashing provisions had introduced significant \u201cuncertainty\u201d<\/a> and that the requirement to adhere to the standards in presenting their information was \u201cvague\u201d or \u201coverreaching.\u201d<\/p>\n The Narwhal asked the office of Industry Minister M\u00e9lanie Joly if it could name any examples of companies or organizations that were slowing or reversing genuine environmental efforts as a result of the law.<\/p>\n A departmental spokesperson, Andr\u00e9a Daigle, responded that the government had heard from \u201cnumerous stakeholders across various sectors of the economy\u201d that they felt unable to report on environmental achievements, but did not discuss the impact of those efforts.<\/p>\n The fossil fuel industry, as well as other businesses, civil society and government-run groups, had \u201cregularly raised what they and their legal counsel considered an unacceptable risk in making public statements\u201d when it was unclear what standards to use for backing them up, Daigle said.<\/p>\n \u201cThis has resulted in a trend \u2026 of withholding information that could aid in attracting investment for green innovation and informing consumers about good-faith efforts,\u201d she said.\u00a0<\/p>\n The goal of paring down the law was to \u201cease fears of heavy enforcement that could discourage companies from speaking up, while ensuring they remain accountable for showing their claims are genuine.\u201d<\/p>\n Last year, an official at Environment and Climate Change Canada told the Competition Bureau that \u201cuncertainty\u201d around the anti-greenwashing law \u201chas led to some challenges<\/a>\u201d in encouraging companies to voluntarily adopt net-zero commitments under a government-run program.<\/a><\/p>\n At the same time, the department said it was \u201creasonable\u201d to expect companies to come up with an environmental plan backed by \u201ccredible elements\u201d that includes carbon accounting \u201cbased on international methodology,\u201d like the law required.<\/p>\n Others at the time said the law seemed fine. The Canadian Renewable Energy Association, for example, said it supported the rules and said it would \u201cstrongly encourage<\/a>\u201d the adoption of the Greenhouse Gas Protocol as the internationally recognized standard of choice.\u00a0<\/p>\n![\"Animation](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/11\/Greenwashing-Parkinson.gif\"\/)
Under the Carney government\u2019s revised greenwashing law, fossil fuel companies will no longer be required to adhere to internationally recognized standards when substantiating their environmental claims. Illustration: Shawn Parkinson \/ The Narwhal<\/p>\n![\"An](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2025\/11\/ON-CanadaActionBillboards-Ottawa-Morozuk-0571.jpg\"\/)
Politicians and civil servants were met with pro-oil-and-gas messages during an advertising blitz in downtown Ottawa in 2024. Photo: Kamara Morozuk \/ The Narwhal<\/p>\n