From ‘greenwashing’ to ‘green hushing’ — companies complain new law stifles environmental efforts

Are Greenwashing Laws Truly Beneficial or Harmful?

In recent years, there has been a growing concern over the issue of greenwashing, where companies misrepresent the environmental benefits of their products or practices. In response, new anti-greenwashing legislation, such as Bill C-59 in Canada, has been introduced to prevent companies from making false claims and to hold them accountable for their environmental actions. However, some corporate leaders argue that these laws are doing more harm than good, as they are dissuading companies from taking meaningful climate action.

One of the key changes brought about by Bill C-59 is that companies are now required to conform to “internationally recognized methodology” when making environmental or climate-related claims. While this was meant to provide clarity and prevent false advertising, critics argue that it leaves too much room for interpretation and makes companies vulnerable to legal action. This has led to what some call “green hushing,” where companies are hesitant to promote their environmental efforts due to the fear of legal repercussions.

For example, Maple Leaf Foods, a leading food company, has expressed concerns about the new legislation, stating that it creates obstacles and consequences that discourage companies from showcasing their sustainability initiatives. Similarly, the Canada Pension Plan’s investment arm has scaled back its commitment to invest in line with Canada’s net-zero targets, citing “recent legal developments” as a reason for this decision.

Despite the backlash from corporate leaders, environmental organizations assert that companies should be motivated to act sustainably because it is the right thing to do, not just for public image. They argue that the legislation is necessary to hold companies accountable for their environmental claims and ensure transparency in their actions. Additionally, they point out that many of the companies complaining about the legislation were previously accused of greenwashing, suggesting that the laws are indeed effective in combating false advertising.

While there are valid concerns about the practicality and effectiveness of the new legislation, experts from organizations like Ecojustice argue that it is not overly burdensome for companies to meet the requirements set forth in the law. By following established principles from accounting and the scientific method, companies can easily establish a basis for their environmental claims and avoid legal pitfalls. Moreover, the Competition Bureau has provided guidance and a mechanism for companies to seek opinions on their claims for a nominal fee, making compliance more straightforward.

In conclusion, while there may be challenges and unintended consequences associated with anti-greenwashing laws, they play a crucial role in ensuring corporate accountability and transparency in environmental claims. By striking a balance between preventing false advertising and providing clarity for companies, these laws can encourage responsible environmental practices and help combat the growing issue of greenwashing in the corporate world.