Imagine a government that passes laws preventing it from enacting its own agenda. That’s exactly what Canada’s new greenwashing provisions have accomplished.
For those unfamiliar with the term, “greenwashing” is when someone tries to market something that isn’t as environmentally friendly as they say it is. As with existing laws prohibiting deceptive marketing practices, anti-greenwashing laws are meant to ensure businesses are telling the truth about their environmental performance and climate ambitions.
Last June, the federal government passed Bill C-59, introducing new anti-greenwashing amendments to the Competition Act. The Business Council of Alberta opposed the move, arguing that these ill-conceived amendments will kill Canadian business ambition and innovation. We said the amendments would limit companies’ ability to talk about their environmental aspirations and, by so doing, the government is undermining its own climate goals.
How can businesses raise capital to invest in emissions reduction if they can’t communicate their case? It’s like trying to raise money to cure cancer and being told that you need a detailed plan for how exactly cancer will be defeated. And if you fail to cure cancer, you face massive fines. Good luck finding someone to take you up on that offer.
Some might see our response as being a tad dramatic. But what if these concerns weren’t overblown? Wouldn’t it be crazy if the federal government agreed?
Well, a recent submission to the Competition Bureau from the ministry responsible for executing Canada’s environmental agenda, Environment and Climate Change Canada (ECCC), took aim at the new greenwashing provisions.
ECCC writes, “Decarbonization technologies are not fully known or fully tested, and required regulatory changes may be nascent or incomplete.” As such, private sector planning for net-zero operations “should be looked at as an evergreen process.” Also, “We believe that it is too soon to expect companies . . . to have fail-proof plans today to achieve the full path toward net-zero emissions from all sources by 2050.”
In essence, ECCC is saying that businesses are discouraged from participating in government support programs because the Competition Act could make it a legal risk to communicate their net-zero ambitions when their pathway isn’t yet certain.
Surely the greenwashing provisions won’t go that far, will they? The Competition Bureau’s recently released draft guidance states that “claims about the future can be considered greenwashing if they represent little more than wishful thinking.”
That seems fair. Nobody wants businesses presenting environmental plans that are little more than wishful thinking. But how can environmental claims avoid this accusation? In response, the Bureau reiterates many of the same points ECCC is railing against, advising businesses should only make net-zero emissions claims if they have:
- A clear understanding of what needs to be done to achieve what is being claimed;
- A concrete, realistic and verifiable plan in place to accomplish the objective, with interim targets; and
- Meaningful steps underway to accomplish the plan.
How can businesses have a clear understanding of how they can get to net zero if, as ECCC puts it, “decarbonization technologies are not fully known or fully tested, and required regulatory changes may be nascent or incomplete”?
That strikes at the heart of the climate challenge: there’s a gap between the emissions that are feasible to reduce in today’s policy environment and the emissions that need to be reduced to reach net-zero by 2050.
BCA agrees with ECCC’s warning to the Competition Bureau: “It may be counterproductive to potentially hamper the ambition of companies and create a situation where they are reluctant to announce well-intentioned aspirational commitments and take real action for fear of legal risk.”
By seeking stronger protections against greenwashing, the government has, without a hint of irony or self-reflection, undermined its own ability to pursue its climate ambitions.
That’s why BCA is calling for the next federal government to rescind these ill-conceived provisions. After all, even the current government agrees.
Mike Holden is vice-president of policy and chief economist at Business Council of Alberta.
Dylan Kelso is a policy analyst at Business Council of Alberta.
As appeared in The Calgary Herald.