The Circular Future - A Quantum Lifecycle Partners podcast
Welcome to the Circular Future – a podcast that facetimes you with the challenges of e-waste and its impact on the world. Join Stephanie McLarty, Head of Sustainability at Quantum Lifecycle Partners, as she interviews industry thinktanks who share their insights on the trends in reuse and recycling of technology. This podcast is for you if you are responsible for managing your company’s electronics or are simply curious about all things e-waste, sustainability, carbon emissions, data security and more. Each episode finishes with actionable advice for business managers and leaders to do their part in helping build a circular future.
The Circular Future - A Quantum Lifecycle Partners podcast
36. What Canada’s new greenwashing legislation means for your business
Canada has introduced new legislation to counter greenwashing, which is already in effect. The legislation, called Bill C-59, is a significant amendment to Canada's Competition Act and aims to address false or misleading environmental and social claims. The penalties for greenwashing can be severe, ranging up to $10 million or 3% of the company's global annual gross revenue. The legislation applies to every business operating in Canada, regardless of size or industry. Organizations can take steps to counter greenwashing, such as educating themselves, reviewing their communications, and using existing standards and certifications.
Takeaways
Canada has introduced new legislation, Bill C-59, to address greenwashing
The penalties for greenwashing can be severe, up to $10 million or 3% of global annual gross revenue
The legislation applies to all businesses operating in Canada
Organizations can counter greenwashing by educating themselves, reviewing their communications, and using existing standards and certifications
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Canada just announced new legislation to counter greenwashing that is already in effect. Is your business ready for it? Welcome to the circular future, your access to thought leaders and innovations. To help you be a business sustainability champion, even if it's not your core job, I'm your host, stephanie McLarty, head of Sustainability at Quantum Lifecycle Partners. This new legislation on greenwashing represents a significant shift in Canada's regulatory landscape, and I've heard folks reference it as the most significant change for businesses in two decades.
Speaker 1:I have to admit, when I saw the announcement of the greenwashing legislation, I thought great. And I honestly didn't think a whole lot about it, since we're mindful at Quantum to really walk our talk and, after all, courageous integrity is one of our core values. And it was a few weeks later, when I really dove into the details of this legislation, that I was really astounded by the weight and the implications of it. I immediately shared the info with our senior leaders and thought every business really needs to know this. So hence we're here on the podcast. So let's dive into what the legislation is, who it's for, why it's important and what you can do at a high level to manage the risk associated with it. And hey, of course I'm not a lawyer, so always consult your own legal counsel for your specific business.
Speaker 1:Okay, bill C-59, that's what it's called is a significant amendment to Canada's Competition Act and it's aimed at addressing greenwashing, which is the practice of making false or misleading environmental and social claims to promote your products, services and or business interests. And there's really two key aspects to this legislation. Firstly, regarding environmental and social claims for products and services Okay, we're talking products and services here. Proof must be provided by the company making the claim based on an adequate and proper test. Secondly, regarding the environmental claims for companies and brands so this is companies and brands we're talking about now the company must prove the claim is based on an internationally recognized methodology. This legislation came into effect on June 20th 24 and is effective immediately. So anything you say or put out into the market on or after June 20th 2024 is applicable. There is no waiting period for this to prepare, but anything previous to June 20th is not applicable.
Speaker 1:Okay, so why is this important? Why should businesses really care? First of all, let's talk about the penalties. They are severe. Penalties for greenwashing can range up to $10 million or three times the value of the benefit derived from the claim, or 3% of the company's global annual gross revenue, whichever of these numbers is greater. So let me say that again up to $10 million, or three times the value of the benefit, or three times of global revenues, whichever is the biggest number. And of course, that doesn't include long lasting impacts, such as harm done to your brand, which may be difficult to quantify. Another important factor is this bill is characterized by reverse onus. The onus is on you to prove your claims. In other words, the burden is on you, the advertiser, to ensure everything you say is substantiated, and if there's a complaint, it's almost as if you're guilty until you prove you're innocent. And before you go thinking that your organization may be exempt, know this the legislation applies to every business operating in Canada, regardless of size or industry, and really that includes any international business that does business in Canada or advertises in Canada. So what should you be careful of?
Speaker 1:There are several types of greenwashing and as I've been learning more about this legislation and the implications, I'm going to point to KPMG, who I think has done a great job of summarizing them into five common types of greenwashing. Firstly, empty or exaggerated claims, saying something which is usually aspirational without the proof to back it up. Number two selective disclosure or hidden trade-offs, so choosing to only share data or practices that look good rather than a complete picture. Number three omitting data or having outdated info, so that could be not referencing methodology or pointing to limitations that a data set may have. Number four irrelevant or misleading graphics or visuals, so this could be suggestive images without the substance to back it up. The example I heard was showing women in hard hats to show diversity in the trades, but without having actual data or substance to go with the image. This could be seen as greenwashing. And finally, number five, vague wording or unspecific goals or targets.
Speaker 1:What are some of the key words to be cautious around here? Think about the words like clean, sustainable, green, low carbon climate leader, carbon neutral, climate friendly or net zero. So the words themselves are not so much the issue, but when you say them without definition or substance to back them up. That's when it's problematic. So, for example, what does it mean when you say your product is quote unquote sustainable? Or what does it mean when you say your product is quote-unquote sustainable? Or what does it mean when you say you're on the path to net zero? Explain it and substantiate it.
Speaker 1:So how have organizations reacted to this legislation. Well, like most things, there have been mixed reactions. There are many companies and organizations who celebrate a move like this. This is needed in the market and it will separate the companies doing the right thing versus those who pay lip service to it. There are other organizations who have been very critical, and one of the biggest criticisms is that the legislation does not define certain key terms. Criticisms is that the legislation does not define certain key terms, such as what adequate and proper evidence really means or what are internationally recognized standards, and this all leads to great uncertainty. Regardless of what organizations may think, know that this legislation is here today and there are significant potential risks for your business. It is worth looking into.
Speaker 1:I've already hinted to some of the things you can do to counter greenwashing, but here are three simple steps. Number one educate yourself. Hey, you're listening to this podcast, so you're already on your way there. Keep educating yourself, and it's not even just about this whole greenwashing legislation In general. The whole space of ESG, environmental, social governance and circularity as a whole is constantly evolving. Number two review your current communications to ensure everything you say is substantiated. If you can't prove it or if you are uncomfortable with it, then take it down.
Speaker 1:Number three use existing standards, frameworks and certifications where possible. For example, quantum uses the Global Reporting Initiative framework for our sustainability reporting, the GHG protocol for reporting on greenhouse gas emissions and the US EPA's WARM model as the basis for calculating avoided emissions. The biggest thing pay attention to this legislation. And, hey, ensuring you're not greenwashing is the right thing to do, and there are now significant, tangible risks for every business if you do participate in greenwashing. And remember, if you're looking for a leader in electronics reuse and recycling, we'd love to chat. Head on over to quantumlifecyclecom and contact us. This is a Quantum Lifecycle podcast and the producer is Sanjay Trivedi. Thank you for being a Circular Future champion in your company and beyond Vlogging off.
