By: Andrea Sutherland
Introduction
As exemplified by several multinational corporations, corporate social responsibility (“CSR”) is a key feature of modern marketing strategies.1 In some cases, it is a sign of environmental leadership; in others, it is unsubstantiated greenwashing.2 With a lack of regulatory oversight and the fragmentation of reporting approaches, it is difficult to distinguish between the two.3 High-profile cases, such as Exxon Mobil advertising an unapproved and under-supported carbon capture facility, suggest that legal frameworks are ill-equipped for this challenge.4 In response, many jurisdictions are amending their competition laws to improve accountability for misleading environmental statements.5
Canada adopted such changes in 2024.6 The Competition Act (the “Act”) was amended to require the substantiation of representations on the environmental benefits of business activities “in accordance with internationally recognized methodology”7 and to allow private applications for enforcement proceedings (the “2024 Amendments”).8 In 2025, the new federal government announced an intention to weaken these changes, citing their contribution to investment uncertainty and reduced environmental efforts.9 This was accomplished on March 26, 2026, with Bill C-15 (the “2026 Amendments”).10 The 2026 Amendments removed the requirement for an “internationally recognized methodology”11 and limited the private right of action for enforcement proceedings.12
This paper will show that, based on a comparative analysis of competition law in Australia and the United Kingdom, the most recent amendments to the Act detracted from the application and harmonization of anti-greenwashing law. Maximizing the Act’s potential as a CSR accountability measure necessitates further policy reform. To situate competition law as a promising accountability mechanism, Part I will discuss greenwashing and its international and domestic legal consequences. Part II will review competition law and its application in Australia, the United Kingdom, and Canada. Part III will conduct a comparative analysis of the Act as an accountability mechanism, with reference to its social, environmental and economic implications. Finally, Part IV will provide recommendations to improve anti-greenwashing accountability under the Act.
Background
Greenwashing
Greenwashing, also known as “faux CSR”13 and “environmental puffery”,14 does not have a precise legal definition.15 The term was coined in 1986 by Jay Westerveld to criticize the framing of a hotel’s cost-saving program as environmental stewardship.16 Since then, it has generally described a company’s misrepresentation of its activities as more environmentally conscientious than they really are.17 Some definitions limit the scope of greenwashing to the context of consumers18 or investors,19 but most academics recognize that greenwashing encompasses a company’s misrepresentations to any and all of its stakeholders.20 Stakeholders, broadly, are those within a company’s “sphere of influence” who affect and are affected by the corporation.21 They can include shareholders, investors, directors, employees, customers, suppliers, communities, non-governmental organizations (“NGOs”), and governments.22 The breadth of this list suggests that most of a corporation’s environmental misrepresentations may constitute greenwashing.
Greenwashing is also broad in how it manifests. At the product level, it may be identified in advertisements and labelling.23 In 2010, over 95% of self-proclaimed environmentally responsible products in Canada and the United States were found guilty of this type of greenwashing.24 At the firm level, greenwashing may arise from a corporation’s claims of its overall environmental performance.25 In its most obscure form, it can also result from the use of environmental imagery to evoke an assumption of environmental responsibility without any supporting evidence.26 This broad scope may complicate the development of effective regulatory regimes.
When unaddressed, the consequences of greenwashing, in any form, are significant. In the short term, corporations may realize economic benefits, but they will also create unfair market conditions, divert environmental funds to marketing initiatives, and frustrate accountability efforts by concealing unsustainable conduct.27 Moreover, as corporations’ statements are recognized as greenwashing, stakeholders may lose trust in CSR initiatives, and competing businesses may weaken their environmental action to reap the same benefits without the associated costs.28 To mitigate these consequences, legislators must adopt strong anti-greenwashing accountability mechanisms.
Accountability for Greenwashing
Although greenwashing is a significant challenge to CSR, it also offers a unique opportunity as an accountability measure.29 Accountability for CSR “is the joint product of externally imposed and internally incorporated legal obligations”.30 Anti-greenwashing legislation highlights how such obligations are not mutually exclusive. In the absence of mandatory environmental disclosure, corporations may disclose voluntarily.31 This provides discretion for corporations to delineate the scope and nature of their CSR initiatives.32 However, once they make a public representation of their environmental performance, anti-greenwashing legislation may impose sanctions for a failure to comply.33 This dynamic tests the mandatory-voluntary dichotomy of CSR, recognizing that voluntary commitments can, in some circumstances, be mandatory. In so doing, it combines the flexibility of the voluntary approach with the punitive mechanisms of regulations,34 creating a promising accountability measure.
International Legal Accountability for Greenwashing
Under international frameworks, substantive accountability for greenwashing is generally lacking. Voluntary initiatives – both government and industry-led – provide guidance for environmental performance and communications.35 This includes the Carbon Disclosure Process, the Global Reporting Initiative Sustainability Reporting Guidelines, the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, and the World Resources Institute Greenhouse Gas Protocol.36 Under these frameworks, the disclosure of key environmental metrics is inconsistent and incomplete, and their associated accountability mechanisms are underdeveloped.37
Regardless of these limitations, international law calls for states to implement effective environmental accountability mechanisms. Principle 11 of the “Rio Declaration on Environment and Development” of 1992 requires “effective environmental legislation”.38 Goal 16 of the “2030 Agenda for Sustainable Development” (the “2030 Agenda”) outlines specific targets for justice, including the promotion and enforcement of laws for sustainable development.39 As a member state, Canada has adopted both of these instruments.40 Additionally, Principles 5 and 6 of the “New Delhi Declaration of Principles of International Law Relating to Sustainable Development” recognizes transparency and accountability as principles of international sustainable development law.41 Given that greenwashing implicates both the environment (by concealing environmental impacts) and sustainable development (the principle underlying genuine CSR efforts42), these international frameworks suggest that states have a responsibility to develop effective anti-greenwashing law.
Domestic Legal Accountability for Greenwashing
States, including Canada, have developed diverse accountability mechanisms under domestic law. While legal systems were slow to adapt, anti-greenwashing frameworks now combine consumer protection law, securities law, advertising boards, and competition law.43 Each approach has its own opportunities and limitations, offering the potential to create a balanced anti-greenwashing framework.44
Consumer Protection Law
Consumer protection laws outline actionable misrepresentations, and they have been used by consumers to support private greenwashing claims.45 This accountability mechanism is particularly popular in the United States, which has seen several high-profile cases.46 However, given that it is generally regulated at the provincial or state level, variations between jurisdictions may challenge the efficiency of its application.47 Claimants may also encounter procedural barriers or struggle to prove stringent requirements with respect to materiality and harm, and even successful claims are limited by their focus on damages to consumers over the public interest.48 Consumer protection law, therefore, offers a potential but limited opportunity to address greenwashing.
Securities Law
Recent developments in securities law also provide a mechanism to regulate greenwashing. As a state-based or provincial regime, some jurisdictions have introduced mandatory environmental disclosures, but interjurisdictional consistency is lacking.49 Misrepresentations, voluntary or otherwise, may be pursued under securities fraud provisions.50 This provides a complementary but similar approach to consumer protection law.
Advertising Standards
Though lacking the enforcement capacity of legal bodies, self-regulated advertising standards associations ensure accountability for greenwashing with reputational sanctions. Typically, they are national, non-profit associations that develop advertising codes and adjudicate complaints about non-compliant advertisements.51 In some jurisdictions, they work closely with government agencies to prevent a duplication of investigative efforts.52 This provides a notable and complementary addition to government-led accountability measures.
Competition Law
Competition law is perhaps the most promising legal mechanism to address greenwashing. Administered by government agencies and tribunals, it circumvents the private costs associated with consumer-led action.53 Many jurisdictions have also amended their law to prioritize anti-greenwashing measures, addressing shortcomings in traditional consumer protection laws by clarifying the acceptable use of vague environmental language.54 It is these amendments that are at issue in Canadian reform efforts and that are the focus of this paper.
Competition Law
Although competition law offers a promising accountability measure for CSR, a comparative review of competition law in Australia, the United Kingdom, and Canada suggests that Canadian law is relatively underdeveloped and underenforced. In comparable regimes, the increased application of competition laws has provided a level of clarity that is lacking in Canada. The 2024 Amendments attempted to address this issue and harmonize Canada’s approach with other international anti-greenwashing leaders, including Australia and the United Kingdom. The 2026 Amendments largely reversed this progress.
Australia
Competition Law
In Australia, the primary anti-greenwashing competition law is the Australian Consumer Law (“ACL”),55 a schedule of the Competition and Consumer Act (“CCA”). It is administered by the Australian Corporate and Consumer Commission (“ACCC”).56 The ACL prohibits commercial activity “that is misleading or deceptive or is likely to mislead or deceive.”57 More specifically, section 29(1) prohibits false or misleading representations about goods or services, including with respect to their composition, standard, performance, characteristics, or benefits.58 Sections 33 and 34 prohibit misleading conduct as to the nature, manufacturing process, and characteristics of any goods or services.59 These provisions are strict liability offences and provide the basis for identifying and addressing greenwashing.60
To clarify how the ACL applies to environmental claims, the ACCC published “Making Environmental Claims: A Guide for Business” (“MEC”).61 It provides eight principles for trustworthy environmental claims and examples of compliant statements.62 To avoid attracting liability, claims should be accurate, supported by evidence, qualified, clear, and direct about sustainability transitions.63 They should not be overly broad, omit important information, or include misleading visual elements.64 In general, claims must be based on the full product life-cycle and require scientific validation.65 Claims related to environmental impact should be based on accepted methodologies and verifiable records.66 Emissions assessments, for example, should use established Australian or internationally recognized methodologies.67 Therefore, the scope of legally actionable greenwashing is broad.
The ACL also provides significant enforcement power to the ACCC. It applies a hybrid enforcement approach, allowing for administrative interventions, regulatory fines, and criminal prosecution.68 Under section 219, the ACCC may issue substantiation notices as a preliminary tool to request information to support an environmental claim.69 A financial penalty may be imposed if its recipient fails to comply.70 Under section 155 of the CCA, a more stringent notice may also be issued to request documents and oral evidence, enforceable under threat of imprisonment.71 If, on the basis of its investigation, the ACCC has reasonable grounds to believe that a person contravened provisions related to misleading representations or conduct, it may issue an infringement notice.72 This does not amount to a finding of a contravention, but if its recipient declines to pay the specified amount, the ACCC will likely pursue other enforcement options.73 This includes issuing a public warning notice, which is a public statement of their conduct, and initiating court proceedings.74
Court proceedings can attach significant accountability to greenwashing.75 Under section 224, a corporation found in contravention of its provisions on misleading representations or conduct may be fined the greater of $50 million (AUD)76 or three times “the value of the benefit that the body corporate, and any body corporate related to the body corporate, have obtained directly or indirectly and that is reasonably attributable to the act or omission”.77 If the latter cannot be determined, 30% of the corporation’s adjusted turnover during the breach turnover period for the conduct will be considered as an alternative.78 The court may order compensation for those harmed by the contravention, if an injured person applies or consents, and order redress for a class of non-parties likely to suffer loss or damage.79 Claimants are alternatively permitted to recover damages for contraventions by a private action.80 More broadly, the court has powers to issue injunctions and non-punitive orders, including orders for community service, mandatory disclosure, and corrective advertisements.81 This legislative regime enables broad and significant accountability for greenwashing.
Application of Competition Law
In 2017, the ACCC identified greenwashing as a priority for enforcement.82 It remains a priority in 2026, encouraging prosecution and the adoption of a clear, cooperative approach to accountability.83
In the past few years, the ACCC has been very active in investigating and prosecuting potential infringements.84 It has launched ongoing court proceedings against claims of “reef-friendly” sunscreen and “renewable” natural gas.85 When an infringement is found, however, the sanctions imposed are generally mild compared to the severity of those available.86 A fine of $50 million is the lowest threshold for a maximum penalty.87 The most recent court-ordered fine, which was based on the misrepresentation of plastic gathered 50 kilometres from shore as “ocean plastic”, totalled $8.25 million.88 Infringement notices imposed by the ACCC directly are much lower, at around $20,000 for a corporation or $200,000 for a public corporation.89
Despite the relatively low cost of non-compliance, consistent enforcement efforts have resulted in a clear framework to assess accountability. Precedent from court cases on misleading conduct has provided effective guidance, and, even if decisions are not rendered, the ACCC provides public documentation of its enforcement proceedings.90 The ACCC also encourages proactive accountability through internet sweeps, during which it identifies concerning claims and responds as necessary.91 This provides clear guidance on what constitutes greenwashing.
In addition to enforcement, the ACCC adopts unique investigative processes. Enforcement is prioritized with an online complaints process, where individuals and businesses can report alleged greenwashing.92 This approach recently expanded with the announcement of an Australian NGO as a designated complaints party.93 If the NGO provides the ACCC with sufficient complaints and evidence of greenwashing, the ACCC has an obligation to investigate and respond.94 This provides routes for enforcement and accountability.
Cooperation with other agencies also appears to advance the investigative process. Although the precise extent of their coordination is unclear, the ACCC and the Australian Association of National Advertisers (“AANA”) participate in information-sharing and concurrent enforcement.95 The AANA is a self-regulatory body that develops and applies marketing standards.96 In 2025, it published an updated Environmental Claims Code (the “ECC”) to address greenwashing. It bears key similarities and references to the ACCC’s MEC, suggesting a cross-institutional approach.97 The AANA will publish a case report outlining its analysis when an advertiser is in breach of the ECC.98 It may also publish a case report to provide clarity when a complaint is dismissed.99 As a self-regulatory approach, the AANA is limited by its voluntary nature, but, in cooperation with the ACCC, corporations may be held accountable for greenwashing without a complete duplication of enforcement efforts.
Through the development of guidelines and active enforcement, the ACCC has developed a legislative prohibition against misrepresentations into a clear and comprehensive anti-greenwashing framework. Under this framework, accountability for greenwashing is potentially severe, enforcement is creative, and cooperation with other regulatory bodies is encouraged.
United Kingdom
International Competition Law
The United Kingdom has a particularly unique approach to international competition law. Although it is no longer a member state of the European Union (“EU”), it has adopted several regulations and policies derived from EU competition directives.100 The most notable directive in this regard is the Green Claims Directive, which was proposed in 2023 to impose significant financial penalties on unsubstantiated environmental statements.101 It proposed a structured evidentiary threshold for representations and a forum for obtaining remedies.102 It was intended to promote a competitive European economy and harmonize anti-greenwashing regulations by applying a common list of methodologies with which to substantiate claims.103 The Green Claims Directive was withdrawn, but some member states were expected to transpose its provisions into national law before its strict entry into force.104 The United Kingdom, despite lacking any legal obligation, has made progress to this effect.
Domestic Competition Law
The domestic anti-greenwashing law in the United Kingdom is the Digital Markets, Competition and Consumers Act 2024 (“DMCCA”). It prohibits unfair commercial practices, which include inducing a consumer to enter a transaction based on a misleading action or omission.105 Section 226(1) defines a misleading action as the provision of false or misleading information or the deceptive presentation of a product, business, or matter relevant to a transactional decision.106 Section 227 defines a misleading omission as the omission of material or legally necessary information in commercial communications.107 Under sections 237 and 238, such conduct is punishable as a strict liability offence.108
The Competition and Markets Authority (“CMA”) is the United Kingdom’s competition regulator. It has provided regular anti-greenwashing guidance for corporations.109 This includes its Green Claims Code (“GCC”), which bears many similarities to the EU’s anti-greenwashing directives and provides guidelines for compliance with the DMCCA.110 The GCC outlines six principles to prevent misleading environmental claims.111 Claims must be “truthful and accurate”, “clear and unambiguous”, and “substantiated”, and any comparisons must be “fair and meaningful”.112 Additionally, claims must consider the full product life cycle and must not omit important information.113 Although the GCC does not explicitly require the use of internationally recognized methodologies to support environmental claims, they render compliance more likely.114 It includes several examples of compliant and non-compliant statements.115 Notably, the CMA also provides supplementary, industry-specific guidance with respect to supply chains, fashion, and heating and insulation.116
The enforcement regime under the DMCCA is multifaceted. The CMA and other public enforcers may apply to the court for interim and final enforcement orders.117 Under sections 155 to 168, the court is empowered to issue various remedies if it finds that a corporation has engaged in prohibited conduct.118 In 2025, the DMCCA expanded beyond this court-based model by providing the CMA with direct enforcement capacities. It allows the CMA to conduct, and issue public notice of, investigations.119 It also enables provisional and final infringement notices, with the former being rebuttable with the submission of evidence to substantiate a claim.120 With final infringement notices, governed by section 182, the CMA may administer penalties directly to corporations.121
If, through these processes, either the CMA or a court of competent jurisdiction determines that there was a breach of the DMCCA, there are several available remedies. They may issue an online interface notice, requiring a corporation to remove or change misleading statements from an online source.122 They may also issue monetary penalties of “a fixed amount not exceeding £300,000 or, if higher, 10% of the total value of the turnover (if any) of the respondent”.123 The 10% threshold is notably larger than the amount required under the EU Green Claims Directive.124 Finally, the CMA or court may also require a corrective notice or enhanced consumer measures, which entail additional requirements for redress and compliance assurances.125 Additional enforcement measures are also available under related regulations, including the right to redress126 and the potential for criminal prosecution.127
Application of Competition Law
The CMA has identified greenwashing, particularly with respect to climate-based claims, as a concern.128 However, evidence of strong enforcement action is lacking. Although complaints have been filed with the CMA, including recent allegations from an Opportunity Green that Scotland Gas Networks made misleading claims about “clean burning” and “zero-carbon” hydrogen heating, the regulator does not appear to have exercised its new powers to address greenwashing.129
Instead, the CMA applies a proactive, cooperative approach to assess and address greenwashing. This includes industry-specific compliance reviews. Its first industry-specific review was conducted in 2022 and focused on the fashion retail sector, which was selected for its carbon impact.130 The CMA reviewed claims from three major retailers – ASOS, Boohoo and George – and produced undertakings to address how each retailer promoted their environmental performance.131 It published industry-specific guidelines in 2024 based on its results.132 This approach allows for clear, industry-specific requirements under the DMCCA. The CMA also cooperates with key consumer protection institutions, such as the International Consumer Protection and Enforcement Network (“ICPEN”) and the Advertising Standards Authority (“ASA”), the United Kingdom’s independent advertising regulator.133
The CMA’s cooperation with the ASA is particularly extensive. The ASA investigates potential greenwashing in response to complaints and on its own initiative.134 In 2023, its Active Ad Monitoring System, an AI assessment tool, accelerated the latter by processing 500,000 advertisements per month and flagging suspicious claims.135 Whether claims are flagged by complaints or algorithms, the ASA analyzes them against its advertising codes and issues rulings on compliance to apply a reputational sanction.136 Both processes have been applied to penalize greenwashing. For example, in 2022, posters advertising HSBC’s net-zero and carbon offsetting measures were held to be misleading because, as noted by complaints, they omitted information about their emissions.137 In 2024, the Active Ad Monitoring System flagged Mazda’s claim that its hybrid car was “sustainable”, and the ASA found that it contravened the environmental provisions of the applicable advertising code.138 Importantly, these codes cross-reference the CMA’s GCC, suggesting that the GCC provides guidance for compliance and, conversely, accountability, under both the CMA and the ASA.139 This is indicative of a broader, cross-agency adoption of the GCC, but it is not the extent of the collaboration between the CMA and the ASA. Recognizing the CMA’s enforcement capacities and the ASA’s established investigative processes, their cooperation is governed by a public memorandum of understanding.140 It outlines responsibilities for communications and a referral system for potential infringements.141 This provides a unique and effective opportunity to maximize accountability with fewer enforcement costs.
Although lacking in direct enforcement, the United Kingdom has adopted creative and proactive enforcement measures to ensure the scope of actionable greenwashing is clearly defined. It is also distinguished by the (albeit partial) adoption of a proposed multinational regulation, the EU Green Claims Directive, into its domestic law to advance the harmonization of anti-greenwashing legislation.
Canada
Competition Law
In Canada, anti-greenwashing competition law is differentiated by the inclusion of environment-specific provisions in its governing statute, the Act, and the frequency of its recent amendments. The 2024 Amendments added paragraphs 74.01(b.1) and (b.2) to address environmental misrepresentations.142 Paragraph 74.01(b.1), addressing product-specific greenwashing, prohibits representations “of a product’s benefits for protecting or restoring the environment or mitigating the environmental, social and ecological causes or effects of climate change that [are] not based on an adequate and proper test”.143 Paragraph 74.01(b.2), addressing firm-level greenwashing, prohibited representations of “the benefits of a business or business activity for protecting or restoring the environment or mitigating the environmental and ecological causes or effects of climate change that [are] not based on adequate and proper substantiation in accordance with internationally recognized methodology”.144 Both place the onus of proof “on the person making the representation”.145 After the 2026 Amendments, claims under paragraph 74.01(b.2) only require proof based on “adequate and proper substantiation”.146 The reference to an “internationally recognized methodology” has been removed.
The Act is enforced by the Competition Bureau (the “Bureau”). To support businesses and accountability efforts, the Bureau has published an Environmental Claims Guide (“ECG”). Although the initial ECG was archived in 2021, with the Bureau citing its reliance on the outdated ISO Standard 14021 and its failure to reflect emerging issues, an updated version was published in 2025 to provide clarity on the 2024 Amendments.147 After the 2026 Amendments, the ECG is again outdated, but it provides important insight into the now-defunct requirement for an “internationally recognized methodology”.148 It asserts that this would likely include frameworks “from a variety of sources, including but not limited to standards-setting bodies, regulatory authorities, or even industries or other entities”, that are recognized in multiple countries.149 For example, it states that a company claiming to be working towards net-zero by 2050 should substantiate this claim with an internationally recognized methodology, but it does not provide a specific methodology.150 Under these guidelines, some uncertainties remain in the scope of potential accountability for greenwashing.
The 2024 Amendments also broadened the scope of potential enforcement mechanisms. Before these amendments, the Bureau could pursue enforcement directly through consent agreements under section 74.12.151 The Bureau could also refer matters to the Competition Tribunal (the “Tribunal”) and other courts for review.152 The 2024 Amendments added the possibility of a private application to the Tribunal.153 Under section 103.1(6.1), the Tribunal may grant leave to an application if it is in the public interest to allow it to proceed.154 This amendment caused particular concern among corporate actors, and, in response, the 2026 Amendments removed the right of action for environmental claims regarding business activities.155 The Act continues to permit six proponents to apply for an inquiry into any alleged greenwashing under section 9, and it allows for the criminal prosecution of egregious claims.156
These enforcement measures enable broad accountability for greenwashing. If a court or the Tribunal finds that a corporation has engaged in greenwashing, it may prohibit the misleading statement.157 If the defence of due diligence is not established, it may also require the corporation to issue a corrective notice or pay a fine not exceeding the greater of $10 million and three times the value derived from the deceptive conduct or, if such value cannot reasonably be determined, 3% of the corporation’s gross annual revenue.158 It may also require an amount to be paid to consumers.159 The Bureau is not limited to these terms when determining accountability measures under a consent agreement.160 This permits significant flexibility and creativity in enforcement.
Application of Competition Law
The Bureau has expressed that greenwashing is a key focus area, but accountability for greenwashing has been limited.161 Most of its public cases address more straightforward misrepresentations, including hidden fees, and the Tribunal has not published a single decision summary related to greenwashing.162 Despite its associated concern, the private right of action has also been underused. Complaints and applications for inquiry have been submitted to the Bureau, but no leave has been granted to a private applicant’s greenwashing claim.163
Instead, the Bureau has focused on accountability by consent agreements. This has included several agreements with car manufacturers, including Hyundai, Kia, Volkswagen, Audi, and Porsche, to address misleading emissions claims.164 More recently, Keurig Canada agreed to pay a $3 million penalty and donate $800,000 to an environmental charity to address claims about the recyclability of K-Cups.165 These cases approach the extent of the Bureau’s public enforcement efforts.
To guide enforcement, the Bureau purports to cooperate with other federal entities, but evidence of this effort is lacking.166 Ad Standards, Canada’s self-regulatory advertising body, has noted that it will consider the Bureau’s guidance when assessing environmental claims.167 However, its proceedings offer limited accountability, as they generally only identify a corporation and an advertisement in their decision if the advertisement is not withdrawn or amended.168
Without jurisprudence or proactive enforcement, there is limited clarity on what constitutes greenwashing under the Act. The ECG provides some guidance, but it is inherently limited and often outdated. The scope of actionable greenwashing, therefore, will not be adequately clarified until Canada increases judicial proceedings or harmonizes with more active jurisdictions, such as Australia and the United Kingdom.
Analysis
To conduct a cross-jurisdictional comparison of accountability for greenwashing under national competition law, this analysis will adopt the triple-bottom line framework. It will review the social, environmental, and economic implications of accountability under Canadian law as it compares to Australia and the United Kingdom.
Social Implications
A review of the social implications of the Act must recognize that a corporation’s social sphere of influence encompasses its stakeholders, those who are affected by or can affect a corporation.169 In the context of greenwashing, consumers are often the primary stakeholders, but greenwashing also implicates the environment, NGOs, communities, and even competing corporations. All of these stakeholders should be considered when assessing how and to whom corporations can be held accountable.
Procedural Implications: How Corporations are Held Accountable
Procedural implications consider how corporations are held accountable for greenwashing. The principal procedural concern under Canadian law is its private right of action, which was limited by the 2026 Amendments.170 Now, applicants may pursue enforcement for product-specific claims, but not firm-level greenwashing. In the context of current CSR marketing, which often features company-wide environmental and climate commitments, this is a significant limitation on how stakeholders can hold corporations accountable. A comparative analysis reveals that the private right of action was reasonable in the Canadian context, and its benefits outweighed its alleged risks.
Although Canada’s framework to compel investigations upon receipt of a sufficient number of complaints is not unique,171 the expansion of the Act to include a private right of action goes beyond the approaches of comparable jurisdictions and has been recognized as a litigation risk.172 However, these concerns are lessened by their interjurisdictional context and by the accountability benefits that such a provision would provide. First, it should be recognized that Canada’s corporate law is characterized by its broad scope for court-based stakeholder remedies.173 A private right of action merely expands this trend into the realm of greenwashing. It provides an opportunity a corporation’s stakeholders, including NGOs and watchdogs that are already identifying greenwashing, with a clear procedure for legal action.174 Their available evidence could surpass that which is generated through the Bureau’s limited investigative capacities.175 Notably, such opportunities for public participation in CSR enforcement have been called for in Australia and under Principle 5 of the New Delhi Declaration.176 Canada is not overreaching in its decision to expand the potential for stakeholder-led enforcement.
Moreover, the private right of action takes on particular importance in the Canadian context. Although both Australia and the United Kingdom lack a framework to enable enforcement initiated by a private actor, their regulatory bodies frequently impose accountability for greenwashing. Both pursue proactive enforcement through industry-specific reviews, and Australia’s ACCC has taken several corporations to court for misrepresentations.177 By contrast, in Canada, enforcement is limited, administrative, and subject to political will. When compared to Australia and the United Kingdom, it is also undermined by an apparent lack of cooperation with other anti-greenwashing bodies, including self-regulated advertising bodies.178 This perpetuates a lack of precedential case law and the resulting uncertainty about the scope of actionable greenwashing. Private actions would provide this clarity where public action fails. Both successful and unsuccessful actions will delimit the scope of appropriate CSR marketing.179 This framework imposes a degree of risk on both claimants and corporations, but its very application will lessen the risk over time. In the interim, these litigation risks could be mitigated by imposing lower penalties for test cases and ensuring the costs of claimants are reimbursed, where possible.
The alleged litigation risks are also tempered by two key dynamics. First, the Act states that the “Tribunal may grant leave to make an application … if it is satisfied that it is in the public interest”.180 This requires the claimant to prove they are acting in the public interest, and its permissive language provides the Tribunal with residual discretion to deny claims. Second, there are likely significant fees associated with a claim. This perpetuates concerns for low-income, affected communities, who may understand the nature of misleading claims yet lack the resources to oppose them, but it also imposes an additional barrier for all potential claimants.181 These dynamics undercut the risk of litigation, which remains highly speculative and unsupported by the current state of affairs. The Tribunal has yet to issue any decisions regarding leave, likely in part due to the regime’s barriers for claimants.182
In addition, these risks should be weighed against the potential of a private enforcement mechanism. Anti-greenwashing law offers a unique opportunity for accountability in the context of CSR. Its focus on misrepresentations overcomes many concerns with respect to finding the proper forum to address environmental harms. More specifically, the Act addresses accountability for claims accompanying imported products.183 A corporation can be held liable regardless of whether the representation originated from within Canada. A corporation can also be held accountable for extra-territorial environmental harms, provided it has misrepresented such harms. This mitigates the procedural barriers inherent in determining the appropriate jurisdiction.
A similar flexibility is adopted to determine the proper party. Although the party issuing a representation may not be clear, the Act provides for enforcement against persons both making representations and permitting them to be made.184 This prevents corporations from evading accountability through complex corporate structures. Moreover, the scope of proper claimants is virtually unlimited. While many accountability mechanisms for CSR are limited to consumers or affected communities, any stakeholder with sufficient resources could apply to the Tribunal for enforcement.185 Parties do not need to prove a specific type of environmental damage; they only need to show a misleading environmental statement. This is well-suited to the flexible, quasi-voluntary nature of CSR initiatives.
Therefore, although the private right of action does not have a comparable alternative in either Australia or the United Kingdom, it is an opportunity to address Canada’s lack of enforcement and increase the clarity of its anti-greenwashing framework. Competition law has significant potential as a CSR accountability measure; a private right of action ensures that Canada can realize this potential.
Remedial Implications: Accountability to Whom
An assessment of anti-greenwashing legislation as an accountability mechanism should also recognize which stakeholders benefit from its enforcement: in other words, to whom are corporations accountable for greenwashing? Greenwashing implicates a breadth of stakeholders, from consumers to NGOs, to the affected communities and environment. An effective anti-greenwashing regime should both recognize the significance of misleading environmental claims and redistribute their consequences among affected stakeholders. Canada has some potential for improvement in this regard.
To account for the significant consequences of greenwashing, monetary penalties must be substantial. Greenwashing does not merely deceive consumers; it creates scepticism and undermines support for genuine environmental initiatives.186 It decelerates government action and imposes a competitive disadvantage on legitimate CSR efforts.187 Its penalties must reflect these consequences. If they are modest, they approach greenwashing as a technical violation rather than a moral failure.188 If, in amount, they do not outweigh the potential profits of greenwashing, they are unlikely to influence corporate behaviour.189 Competition law has evolved to address this. Canada has introduced a set fine of up to $10 million (CAD), which surpasses the United Kingdom’s fixed amount of £300,000, but is significantly less than the $50 million (AUD) that may be imposed in Australia. Canada and Australia both impose an alternative fine of three times the value derived from the deceptive conduct.190 These fines are substantial, but that is necessitated by the severe consequences of greenwashing, and comparably, Canada is not an outlier.
As with the strength of its monetary fines, the Act falls squarely between its international comparators when assessing its capacity to distribute remedies between affected stakeholders. In Canada and the United Kingdom, remedial efforts maintain competition law’s traditional focus on consumers. Canada’s Tribunal and the United Kingdom’s CMA or courts may order an amount to be paid to affected customers, essentially mirroring a class-action system outside of the civil court system.191 In Australia, by contrast, the scope of potential court-ordered compensation is expanded to include any applicants or non-parties who have been harmed or are likely to suffer damage as a result of the greenwashing.192 Unique non-punitive orders, such as community service requirements, may also address harms to affected communities and the environment.193 Canada has the potential to adopt similar provisions in its consent agreements, which, unlike its court-ordered remedies, are virtually unlimited in their terms.194 In the past, the Bureau has ordered compensation to consumers for false fuel efficiency claims and a donation to an environmental charity for misleading claims on recyclability.195 This will not be an option for the new private right of action, which will be addressed by the Tribunal directly. Providing a broader scope of potential court-ordered remedies, similar to the approach taken in Australia, could allow for a recognition of all affected stakeholders through all the available enforcement procedures.
By adopting Australia’s approach, Canada could also address a frequent criticism of accountability under anti-greenwashing law. Under most regimes, remedies focus on eliminating misleading conduct, not addressing the misleading environmental impact.196 That is, if a corporation is found liable for greenwashing, it will remove the misleading statement from marketing materials.197 It will not alter their conduct to make the statement true. The implementation of creative enforcement orders can address this limitation. Corporations can conduct court-ordered community service to address their environmental impacts, as in Australia, or they can be ordered to pay into a government-held fund, such as the Environmental Damages Fund, which redistributes funding for environmental harms to environmental research, education, or remediation.198 The adoption of such court-ordered funding or community service offers an opportunity to address specific harms to key stakeholders, including the environment and affected communities, and account for the broad impacts of greenwashing.
Finally, brief reference should be made to the reputational sanction as a means of accountability to all stakeholders. In Canada, this option is relatively underutilized. While Australia and the United Kingdom issue reputation-based sanctions, such as infringement notices and proactive enforcement, where companies are publicly named and investigated, Canada does not implement comparable enforcement measures.199 In addition, Ad Standards, though not federally regulated, often does not identify companies that infringe its code with environmental claims.200 Without names, its “name and shame” approach understandably loses its significance.201 The national equivalents in Australia and the United Kingdom offer cooperative enforcement through reputational sanctions to complement legislative penalties.202 Both the Bureau and Ad Standards could improve accountability to all stakeholders with greater cooperation and publicity.
Recognizing that greenwashing implicates a breadth of stakeholders, accountability under Canadian competition law could redistribute damages to affected stakeholders and address environmental harms. Australia provides a possible model to strengthen Canada’s efforts in this regard.
Environmental Implications
Greenwashing, as its name suggests, also has key environmental implications. As governments strengthen their competition law to address greenwashing, a new phenomenon – greenhushing – has emerged.203 Greenhushing refers to a decline in corporate communications on environmental and climate initiatives.204 For example, one in four companies with science-based emissions reduction targets have stopped publicizing such initiatives.205 Similar conduct across industries was referenced in Canada’s recent decision to review its anti-greenwashing provisions.206
The environmental consequences of the proposed amendments, however, warrant further review. Greenhushing, when applied to genuinely misleading environmental statements, is an intended consequence of anti-greenwashing legislation. Corporations will refrain from advertising inaccurate environmental benefits, consumers will make better purchasing decisions, and the environment will indirectly benefit from responsible consumption. However, greenhushing may also be a response to a lack of clarity on what constitutes greenwashing.207 As a result, environmentally responsible corporations refrain from making accurate statements about their conduct.208 Consumers will no longer be able to make informed decisions, and environmentally responsible conduct will not be rewarded. Knowledge-sharing is limited, and corporations will adopt less ambitious emissions reductions targets.209 Such patterns are often followed by the demotivation of CSR initiatives.210 The environmental consequences of greenhushing are, therefore, not to be overlooked.
Anti-greenwashing legislation must find an appropriate balance.211 If greenwashing is not addressed, there will be minimal accountability for a corporation that does not deliver against its self-proclaimed CSR standards, and there will be environmental consequences.212 If greenwashing is addressed too broadly, corporations may refrain from publishing their environmental performance. The result is the same: no accountability for environmental harms under anti-greenwashing laws.213 To address this challenge, the anti-greenwashing provisions of competition legislation should be strict but clear.214 In addition, given that multinational corporations may be basing their marketing and disclosure strategies on the legislative frameworks of multiple jurisdictions, legislators should strive for interjurisdictional coherence. This increases clarity for corporations and decreases the risk of an international trend towards greenhushing. Canada’s 2024 Amendments, though appearing to impose more stringent requirements than comparable jurisdictions, provided such coherence.215 For example, the use of technical standards and international methodologies has been evolving in the judicial precedents and anti-greenwashing guidelines of Australia and the United Kingdom.216 Canada, lacking a similar body of greenwashing jurisprudence, incorporated the requirement directly into its governing legislation. Following an initial enforcement period, as guided by the ECG, this would have offered a balanced approach to address greenhushing, both within Canada and internationally.
To maximize its potential as an environmental accountability measure, anti-greenwashing law must be strong, clear, and, preferably, coherent across jurisdictions. This will encourage accurate environmental claims and a transparent market for environmentally responsible goods and services.
Economic Implications
The economic consequences of the 2024 Amendments, as cited by government and industry, were another key driver of the recent changes.217 However, a holistic, comparative analysis of both the costs of enforcement and the alleged investment risks suggests that these concerns were exaggerated or better addressed through other means.
Economic Costs of Enforcement
Enforcement of the Act inevitably entails economic costs, but as is often the case with environmental enforcement, agencies such as the Bureau lack the resources to effectively investigate and punish greenwashing.218 The 2024 and 2026 Amendments have not directly addressed this limitation, despite Canada’s responsibility under Goal 16 of the 2030 Agenda to enforce its sustainable development laws.219 Fortunately, as demonstrated by other jurisdictions, there are emerging opportunities for cost-effective enforcement.
First, enforcement measures have leveraged artificial intelligence (“AI”) and machine learning to detect greenwashing.220 AI can review complex datasets and satellite images against environmental marketing statements.221 It has already been implemented in the United Kingdom, with great success, by the ASA’s Active Ad Monitoring System.222 The Bureau could adopt this system, or develop its own, as a cost-effective investigative tool.
Second, enforcement can benefit from increased cooperation, providing greater consistency between regulators and reducing any duplicated work. To guide these efforts, the Bureau could publish a memorandum of understanding with Ad Standards, as seen in the United Kingdom, articulating their duties and their responsibility to maintain effective communication channels.223 The Bureau could also seek opportunities for international cooperation to reduce domestic enforcement costs. Both national and international cooperation will reduce the risk of superfluous spending.
Economic Investment Risks
The greater economic implication arises not from the cost of enforcement efforts, but from the risk of economic uncertainty. Corporations have expressed concerns about the lack of clarity in Canada’s anti-greenwashing rules and their potential to undermine investment, both domestically and internationally. On their face, these are valid concerns, but they do not necessarily reflect the reality of international anti-greenwashing frameworks.
In Canada, the poor clarity of greenwashing legislation is derived from its relative lack of case law.224 Canada has recognized that legislation will not be able to provide the level of specificity required to analyze evolving environmental claims.225 Similar to the United Kingdom and Australia, it has issued anti-greenwashing guidelines, but uncertainty is expected until cases are adjudicated.226 This is where Canada, through its virtually non-existent enforcement, is distinguished from other jurisdictions. Without jurisprudence, clarity is weak. Without clarity, environmental investments are hampered by the risk of anti-greenwashing litigation.227 This is a primary source of industry concern.
To address this lack of clarity and encourage investment, government bodies should develop clear frameworks that are consistent with domestic and international regulatory regimes.228 Despite industry opinions to the contrary, the 2024 Amendments attempted to achieve such consistency.229 Both Australia and the United Kingdom strongly encourage the application of internationally recognized methodologies and certification standards. The Act formerly imposed a similar requirement for substantiation with an “internationally recognized methodology”,230 which, although binding, accommodated the relative lack of case law. Canada had enforced through statute what comparable jurisdictions had enforced through the courts.
By removing the requirement for an “internationally recognized methodology”, the 2026 Amendments offered corporations more flexibility – and, therefore, more possibility for exploitation – in substantiating their green claims.231 This was framed as balancing Canada’s requirements with those of comparable jurisdictions, but it is better understood as reversing progress towards harmonization.232 The ramifications of this are particularly clear in the context of carbon emissions, where international methodologies that define common terms, such as “net-zero”, and outline processes for emissions accounting.233 Australia and the United Kingdom apply such methodologies; Canada does not. Although it is worth noting that an internationally recognized methodology does not immunize an environmental claim from criticism (methodologies vary in quality and their propensity for scandals), their incorporation into anti-greenwashing law allows for a consistent, harmonized, interjurisdictional framework.234 The 2026 Amendments reversed this approach.
Once it is recognized that the 2024 Amendments were an attempt to harmonize Canadian law with other anti-greenwashing leaders, the argument for economic competitiveness loses its vigour.235 Unclear legislation may discourage innovation and investment, but weak legislation disincentivizes and removes the competitive advantage of genuine corporate social responsibility.236 Canada sought guidance from other national frameworks to find a balance between the two. This approach was well-suited to greenwashing. Anti-greenwashing laws have primarily been enforced against large corporations, which can be difficult to regulate in a single jurisdiction.237 An internationally consistent approach is preferred.
To advance international harmonization, governments such as Canada, Australia, and the United Kingdom could take a considerable step by adopting a global anti-greenwashing framework. Similar to the proposed EU Green Claims Directive, such an approach could be explicitly harmonized and overseen by an international authority.238 It could ensure clarity and uniformity by enumerating which methodologies are appropriate to substantiate environmental claims.239 It would require substantial effort, but the costs associated with clarifying acceptable environmental claims would be shared between nations. Moreover, as shown by the repeated updates to environmental claims guides, the costs on a national level are already substantial.240 An international approach would also restrict state sovereignty, but large corporations already shown that they have the power to influence Canadian laws.241 Multilateral regulation would address concerns of both clarity and international competitiveness, undermining the arguments against stronger anti-greenwashing law.
A comparative review of anti-greenwashing frameworks suggests that many countries are taking steps towards international harmonization. This approach could be strengthened by explicit, multinational regulation, as attempted by the EU Green Claims Directive. A clear, consistent framework would mitigate the economic risks may arise from anti-greenwashing legislation.
Recommendations
Considering how Canada’s legal regime compares to other leading jurisdictions, three recommendations are provided:
- Enforcement: The Bureau should increase its enforcement efforts under the Act to decrease greenwashing and increase clarity. This could be accomplished with a variety of successful approaches from other jurisdictions, including initiating court proceedings, providing public documentation of the analysis underlying its decision to seek consent agreements, and undertaking proactive and industry-specific enforcement. To maximize the benefits of enforcement, its approach should include both sanctions and public guidance. Its associated costs can be mitigated with cooperation and artificial intelligence. Both Australia and the United Kingdom can be used as models for these cost-saving measures. In addition, to ensure accountability towards a variety of affected stakeholders, the Bureau should continue adopting creative consent agreements. The Act could be amended to allow similar creativity in court-ordered accountability.
- Private Right of Action: The private right of action should be reinstated for the Act’sgreenwashing provisions. This will allow for informed and affected stakeholders, including communities, NGOs, and consumers, to initiate enforcement actions, and it is particularly important in the context of the Bureau’s history of poor enforcement. This will ensure that greenwashing is both enforced and analyzed by the Tribunal, providing guidance on the appropriate scope of CSR marketing for well-intentioned corporations. Any concerns about the lack of clarity in greenwashing legislation or guiding documents can be addressed by issuing lower fines for novel claims or cases where the appropriate scope was unclear. To appease industry concerns, the Act could be amended to explicitly state that lower fines will be issued in those cases.
- Internationally Recognized Methodologies: The requirement for internationally recognized methodologies should be reinstated to increase harmonization and minimize the potential for problematic environmental accounting. Further, to address concerns of clarity and strengthen interjurisdictional consistency, an international government body or organization, such as the ICPEN, could enumerate acceptable methodologies. For climate-related claims, for example, these could include key frameworks such as the Carbon Disclosure Process and the World Resources Institute Greenhouse Gas Protocol. This would require the support and cooperation of other nations, such as Australia and the United Kingdom, but it would both enable the flexibility required by effective anti-greenwashing frameworks and alleviate the administrative burden of each state attempting to harmonize and clarify its own anti-greenwashing laws.
Conclusion
A comparative analysis of competition law in Australia and the United Kingdom reveals that the most recent amendments to the Competition Act reversed an attempt to increase the enforcement and international consistency of Canada’s anti-greenwashing legislation. Although the three countries adopt a similar base model, their enforcement approach and remedies differ. In Australia, active court proceedings and unique remedies ensure that greenwashing corporations are held accountable to a wide range of affected stakeholders. In the United Kingdom, anti-greenwashing regulators engage in creative investigations and proactive enforcement, providing industry-specific guidance as needed.
Canadian law, by comparison, is underdeveloped and underenforced. From a social perspective, it provides an opportunity to many stakeholders to seek accountability for environmental misrepresentations, but this is limited by its reduced private right of action and its narrow court-based remedies. From an environmental perspective, its underenforcement results in a lack of clarity, and the associated risks of greenhushing and poor environmental performance. Finally, from an economic perspective, this lack of clarity perpetuates an exaggerated fear of litigation that lowers investment certainty and perceived international competitiveness. From any perspective, reform is needed.
To maximize the potential of competition law as a CSR accountability measure, Canada should increase enforcement and reinstate the 2024 Amendments. It should also explore opportunities for multinational regulation, as proposed by the EU Green Claims Directive, to ensure a consistent, interjurisdictional approach to greenwashing. This will benefit both corporations seeking to comply with diverse legislative regimes and legislators seeking to keep pace with rapidly changing CSR concepts.