On November 4, 2021, the Competition Bureau archived Environmental claims: A guide for industry and advertisers, stating that:
“The Guide may not reflect the Bureau’s current policies or practices and does not reflect the latest standards and evolving environmental concerns. The guide will remain available for reference, research and recordkeeping purposes, but it will not be altered or updated as of the date of archiving. Please consult Environmental claims and greenwashing for information about false, misleading and unsubstantiated environmental claims.”
The Competition Bureau is an independent law enforcement agency, responsible for the enforcement of the Competition Act, which forbids companies from making false or misleading claims about a product or service; and takes aim at environmental claims that are vague, non specific, incomplete, or irrelevant and that cannot be supported through verifiable test methods.
The practice of making false or misleading environmental claims is known as “greenwashing,” and it is illegal in Canada and many other jurisdictions.
And under the Competition Act, Canadians can apply to have the Bureau investigate a greenwashing claim.
This blog talks about recent greenwashing investigations and activities, the importance of evidence-based claims, and PPEC’s commentary about how recent developments are signalling increased awareness and enforcement around environmental claims.
Competition Bureau Investigates and Fines Canadian Beverage Company over Recycling Claims
The Competition Bureau investigated Keurig Canada, a producer and distributor of hot and cold beverages, over its environmental claims on the recyclability of their K-Cup pods.
According to the Bureau’s January 6, 2022 news release, “Keurig Canada to pay $3 million penalty to settle Competition Bureau’s concerns over coffee pod recycling claims,” it reached an agreement with Keurig Canada “to resolve concerns over false or misleading environmental claims made to consumers about the recyclability of its single-use Keurig® K-Cup® pods.”
The Bureau’s investigation concluded that the company’s recyclability claims for its single-use coffee pods were “false or misleading in areas where they are not accepted for recycling.” Outside of British Columbia and Quebec, K-Cup pods are currently not widely accepted in municipal recycling programs.
As part of the settlement, Keurig Canada agreed to pay a $3 million penalty; donate $800,000 to a Canadian charitable organisation focused on environmental causes; pay an additional $85,000 for the costs of the Bureau’s investigation; change its recyclable claims and the packaging of the K-Cup pods; and publish corrective notices about the recyclability of its product on its websites, on social media, in national and local news media, in the packaging of all new brewing machines and via email to its subscribers.
Reaction to Competition Bureau Investigation and Other Potential Inquiries
Ecojustice, a Canadian environmental law charity, called it a “major win for consumers and the environment,” in their January 14, 2022 blog post Keurig’s $3 million fine highlights thepervasive issue of greenwashing, writing:
“This victory comes following a 2019 submission by Ecojustice and the University of Victoria Environmental Law Clinic to the Competition Bureau which highlighted several instances of false and misleading marketing of K-cups as a ‘green’ and easily recyclable product for Canadian consumers.”
In addition to the Keurig inquiry, Ecojustice “has also prompted the Competition Bureau to open two other inquiries into greenwashing claims: about so-called ‘flushable’ wipes and the Sustainable Forest Management Standard.”
Ecojustice believes that the Canadian Standards Association’s Sustainable Forest Management Standard (CSA Z809) “is patently false and misleading,” and in July 2021, they called for an investigation into ‘sustainable’ logging in B.C., regarding their concerns that “it is not at all possible to sustainably log 800-year-old trees.”
Ecojustice hopes that “the Keurig case signals the Competition Bureau will take meaningful action to hold companies to account for greenwashing.”
Italy’s First Greenwashing Case
On January 13, 2022, law firm Clifford Chance reported on Italy’s first greenwashing case between corporates, where an Italian Court upheld a company’s request for an interim injunction against a competitor.
The case was brought forward by Alcantara S.r.l., a textile manufacturer – who recently hosted the 6th edition of the International Symposium on sustainability entitled “Greenwashing and Sustainability: a growing trend that needs to be addressed” in October 2021 – against Miko S.r.l., one of its competitors, who markets a microfibre product.
The claims made by Miko included statements such as: “environmentally friendly,” “100% recyclable,” and “natural choice,” to name a few. The Court ruled that the statements were “vague, generic, false, and non-verifiable and needed to be immediately removed.”
Forbes’ December 8, 2021 article, Alcantara Wins Major Court Battle Against Greenwashing, states that Judge Francesca Clocchiatti cited the “rapid expansion of the pathological phenomenon of greenwashing.”
Words Matter: The Importance of Evidence-Based Claims
So why is the Canadian association for paper-based packaging talking about an Italian court case?
Because it is a reminder of the importance of terminology, and that environmental claims must be clear, accurate, and based on fact and data.
PPEC has written about this issue before – see Clarifying some of the confusion over “recyclability” and Nothing is 100% recyclable or 100% compostable – but in terms of environmental labelling, what matters is whether the consumer can actually send the product or material for recycling or composting. It does not matter whether the product or material is technically capable of being taken apart and broken down so it can be properly recycled or composted. It does not matter what the actual recycling or recovery rate of that material might be.
What matters is how many Canadians have access to the recycling (or composting) of that product or material.
In Canada and in the U.S., the definition of the word “recyclable” for environmental labelling purposes has been understood to mean that a reasonable proportion of the population – which is 50% in Canada, according to the Competition Bureau; and 60% in the U.S., according to the Federal Trade Commission – has access to the recycling of that package or packaging material.
In Canada, we know that 96% of Canadians have access to recycling for corrugated boxes and paper bags, and 94% for boxboard cartons, determined through an independent third-party study. Knowing that, PPEC has stated that Canadian box, bag and carton manufacturers can print the word “Recyclable” and use the Recyclable logos on their packaging. However, we do not currently have the same data available for access to composting in Canada.
It’s also important to note that while most Canadians have access to recycling facilities, there are some who live in remote regions who do not have easy or convenient access to recycling. Therefore, it is important to remember that 100% access for Canadians will likely never be achieved, which make claims like “100% recyclable,” misleading and untrue.
In the U.S., 94% of Americans have access to community paper recycling programs, and 79% have access to residential-curbside recycling programs, according to the American Forest & Paper Association’s (AF&PA) recent 2021 Access to Recycling Study.
Recyclable and compostable claims, then, are based on whether and to what extent consumers have access to recycling or composting facilities. While we have data on access to recycling, we do not currently have the same data available for access to composting in Canada.
These recent developments signal increased awareness and enforcement around environmental claims.
Any company which puts forward environmental claims on their products or packaging are reminded that they need to know the applicable laws to ensure they are making informed legal decisions and evidence-based claims.
PPEC members are no exception, and we have historically pointed our members in the direction of the Competition Bureau’s now archived Environmental Claims guide, in addition to providing them with information and data about access to recycling.
So, what does it mean now that the guide has been archived? And if the guide “may not reflect” current policies, practices, or standards, what does?
At first, we took the archiving of the Competition Bureau’s guide in the most literal sense of the word – “archive” as in put aside, put in storage, basically shelving it – which felt confusing and unexpected during a time when there has been a significant increase in “greenwashing” news.
But knowing that the opposite of archive means to remove or delete, we are now taking this move to mean that the guide is still here and “will remain available for reference, research, and recordkeeping purposes,” as the Competition Bureau put it.
While we recognize that the guide is not going anywhere, PPEC encourages the Competition Bureau to provide updated guidance as it becomes available.
Meanwhile, we remind PPEC members to ensure they are aware of, and comply with, existing obligations when making environmental claims, and to refer to the Competition Act, the Competition Bureau’s Environmental claims and greenwashing, and its January 2017 news release, Calling it “organic”, “green” and “eco-friendly” isn’t enough, that’s greenwashing, and it’s against the law, for additional information.
Multinational companies may also need to consider guidance available in other jurisdictions, including, but not limited to:
- The U.S. Federal Trade Commission Guides for the Use of Environmental Marketing Claims;
- The European Commission’s Guidance on the implementation/application of directive 2005/29/EC on Unfair Commercial Practices; and
- The U.K.’s Competition & Markets Authority’s Green Claims Code.
In general, PPEC advises against using vague claims, broad terms, “100%” claims. Environmental claims should be clear, accurate, evidence based, and comply with existing obligations.
Consumers are increasingly environmentally conscious, aware, and informed, and in many jurisdictions, including Canada, they are empowered to take action.
We believe the news reported on in this blog signals more than just a trend, but a concerted pushback against greenwashing, both here in Canada, and globally.