Many Canadians are very concerned about the environment and climate change. It is very likely that environmental representations could influence a consumer’s decision to purchase a product or service and therefore considered “material representations” subject to consumer protection legislation. As such, it is essential to ensure that environmental promises are not false or misleading. To this end, environmental claims should not be vague or too broad; they must be precise and verifiable. There has been a recent change such that environmental claims will increasingly be classified as a type of performance claim in the future. It is therefore important that they are based on adequate and appropriate testing in accordance with the requirements of the Competition Act.
A significant challenge with environmental commitments is their temporal scope. They often span multiple years and are based on variables that may change over time (including applicable regulations, supply chain constraints, availability of municipal programs and facilities, etc.). Therefore, it is important to adequately qualify an environmental commitment (especially a long-term commitment) to account for this variability. Similarly, it is important to develop and implement a credible plan to anticipate, monitor and overcome challenges that could threaten your ability to meet your commitment. Finally, it is important to integrate your plan into your supply chain. To do this, supplier agreements should clearly define the obligations of your respective suppliers in relation to your environmental claims, but should also clearly state that compliance is relied upon to substantiate environmental claims (so that non-compliance will trigger indemnification obligations that cover regulatory enforcement and private actions).
Engaging in a certification program can help organizations develop a promise and a plan for successfully achieving it. Additionally, certification marks often add credibility to an environmental claim and its specificity (i.e. the certification standard delimits the scope of the claim). However, they will not necessarily eliminate all risk. Again, to reiterate – the keys to success are: Be specific. Be verifiable. To be engaged. Be conservative.
Greenwashing can lead to blacklisting
Greenwashing is a term used to label false or misleading environmental claims, including presenting a product or service as having more environmental benefits than it actually does. Greenwashing is sometimes obvious; for example, a statement “100% biodegradable” which is not true. It is often more subtle; for example, calling a product “ecological” when it is simply recyclable. Companies want to brag about being an environmental ally, but they can’t over-promise and under-deliver. Making broad environmental claims without equally broad grounds is the essence of greenwashing.