Making false and misleading claims can land you in a lot of trouble with the Competition Bureau of Canada. The Bureau is taking a particular interest in green washing and that can change the industry in a big way.

The main point: if you’re saying you’re green, you need to back it up!
A false green claim can cost you $10,000,000 in Canada.

Importantly for green companies, a claim that your product’s sustainable requires life cycle analysis or needs to be verifiable!

Growing Pains

Let’s face it. Green washing is that the acne of the green industry. It’s held green products back for decades as the industry grew from its infancy in the 1970’s to its awkward teens in the early 2000’s.

What better example than the now ubiquitous CFL light? The CFLs introduced in the 70’s in the wake of the energy crisis were a disaster. Overpriced under-performers, they failed to meet expectations and it took 40 years and millions of ad spend for CFLs to regain trust in the public eye.

 greenwashing-1-1-1The electric car industry had their fair share of busts before Tesla

Current State

Fast-forward to 2017, the green industry has grown: 1 in 5 products in 2013 has a green claim associated with it (Mintel 2014). But like adult acne, green washing still sticks around. False and misleading claims have led to consumers failing to connect with green products and hampered the rise of the industry. While consumers are eager for more green products, they have also lost confidence in them. In fact, there is a significant gap between consumers who intend to buy a green product and those who do.

The Competition Bureau

As the world has been grappling with this problem using approaches such as labeling, the Canadian Government’s Competition Act takes a hammer to the issue. Here’s a breakdown of the legislation:

  • The penalty for false claims is $750,000 for an individual and $10,000,000 for a corporation.
  • You cannot make claims about a product which are not based on a proper test. You say your new product is sustainable? You need to back it up!
  • The test itself should be repeatable, free of outside factors, have meaningful and significant results, and should have concluded before you make any claims. You can find out more here.

The act has been around for some time, but as the green industry gains momentum, its significance will increase. This was highlighted by the recent reminder put out by the Competition Bureau and can be considered a shot across the bow for companies engaging in green washing.

What’s Next

Like it or not, it’s exciting times ahead. It’s great to see Canada leading the way on environmental legislation and finding new ways to diversify its economy.

How will the Act impact you and your green business, and what can you do about it? I have a round-up of that coming soon!