Archived — Environmental Claims: A Guide for Industry and Advertisers

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Backgrounder

June 25, 2008


The Competition Bureau and the Canadian Standards Association teamed up to produce Environmental Claims: A Guide for Industry and Advertisers. The goal of this initiative is to provide businesses with the tools they need to ensure their advertising practices are not misleading, which ultimately improves the accuracy of environmental claims in the marketplace today. This responds to increasing demand by consumers for clear information about environmental products.

The Competition Bureau and the Canadian Standards Association's roles relating to Environmental Claims

As part of its mandate, the Competition Bureau enforces the false or misleading provisions of the Competition Act, the Consumer Packaging and Labelling Act and the Textile Labelling Act. Environmental claims, like all other advertising and labelling claims, are subject to these laws. All environmental claims must be verified and substantiated with supporting data that is accurate and readily available to law enforcement agencies, such as the Bureau, on request.

CSA is a leading solutions-based standards organization that aims to enhance public safety, improve quality of life, preserve the environment and facilitate trade. In 2000, CSA adopted an international standard on environmental labelling, "ISO 14021." To help businesses interpret these standards, the Bureau and the CSA agreed to develop a best practices guide and to ensure that this information is easily accessible to businesses and consumers.

Purpose of the Guide

The Guide provides businesses making environmental claims with guidance on how to comply with the laws under the Bureau's jurisdiction by outlining best practices and guiding principles based on international standards. It will serve as the reference used by the Bureau when evaluating whether a claim is false or misleading under the Competition Act, the Consumer Packaging and Labelling Act, or the Textile Labelling Act.

The Guide is voluntary and deviation from it does not necessarily result in a contravention of the law. Advertising that complies with the best practices and principles outlined in the Guide is unlikely to raise an issue with the Bureau.

Key Concepts and Best Practices in the Guide

While the Guide does not address all environmental claims in use today, it does discuss a number of commonly used practices and claims, including "recyclable" and "biodegradable".

General or vague claims:

Terms such as "green", "environmentally friendly", "all natural", "environmentally safe" and "eco", are discouraged because they do not convey a precise or specific meaning to consumers and are difficult to effectively substantiate.

Substantiated and Verified:

The core principle of the Guide is that businesses should only make claims that are substantiated and verified. Substantiation refers to the existence and availability of supporting information for environmental claims while verification deals with the accuracy or reliability of such information.

Möbius Loop:

This symbol should be used to indicate "recyclable" or "recycled content" (or both). It can apply to the product or the packaging - but if there is any potential for confusion as to which part of the product it applies to, the symbol should be accompanied by an explanatory statement. If the symbol is intended to identify "made of recycled content," the percentage of recycled content should be stated in the centre of or right beside the symbol.

Example 1: Recyclable Symbol

Recyclable Symbol

Example 2: Recycled Content Symbol

Recycled Content Symbol

Other Examples of Guidelines:

  • Environmental claims should clearly indicate whether they apply to the complete product, to a certain component or to the packaging.
  • Substance "free" claims need to be literally true and cannot convey a general impression that is false or misleading (e.g. a product claiming that it is free of a certain chemical and is safe for the environment but fails to disclose that it contains a different harmful chemical could be considered false or misleading).

Transition Period

The Bureau recognizes that companies may wish to reassess their advertising and labelling in light of this Guide. It is therefore allowing for a one-year transition period. During that time however, if particularly egregious cases of false or misleading environmental advertising are identified, the Bureau reserves the right to take action.

Over the coming months, the Bureau and the CSA will be setting up meetings with businesses and associations to raise awareness and understanding of the guidelines and the false or misleading provisions of the laws enforced by the Bureau. In addition, businesses are encouraged to contact the Bureau should they be interested in attending a seminar about the Guide or to inform the Bureau of the establishment of their compliance programs.

Possible penalties for misleading advertising

Environmental claims that raise concerns of misleading advertising with the Bureau are examined on a case-by-case basis. Should the Bureau determine that further action is warranted, it may conduct an investigation or seek voluntary compliance from a business.

If the Bureau concludes that a business has contravened the misleading advertising provisions of the Competition Act, the Consumer Packaging and Labelling Act, or the Textile Labelling Act, it can take action either criminally or civilly, and the following penalties can be imposed:

  • Under the criminal regime, the maximum penalty for an individual or corporation is a fine at the discretion of the court and/or imprisonment for up to five years.
  • Under the civil regime, the maximum penalty for an individual is an administrative monetary penalty of up to $50,000 for an individual and $100,000 for a corporation.
  • Under the labelling statutes, there are provisions for product seizure, as well as potential criminal penalties for contravention of the Consumer Packaging and Labelling Act or the Textile Labelling Act, that could result in fines of up to $10,000, as well as imprisonment of up to one year.
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