Over the last decade we’ve witnessed a shift when it comes to CSR and ESG initiatives. Sustainability is no longer just a marketing angle, it’s a mandate. With the passing of recent legislation, businesses making environmental claims now face greater scrutiny, higher stakes, and a clearer set of expectations. Here's what you need to know to avoid greenwashing, build trust, and lead with confidence.

What is Greenwashing?

First things first, how is greenwashing defined? Greenwashing refers to the act of misleading consumers about the environmental practices of a company or the environmental benefits of a product or service. It erodes trust, damages reputations, and ultimately undermines real climate progress.

What Happens to Companies Accused of Greenwashing?

Whether intentional or accidental, companies caught greenwashing face significant risks: public backlash, legal action, and lasting reputational damage. In today’s world of social media and vigilant watchdog journalism, even minor missteps can rapidly escalate and have long-term consequences.Here are a few recent examples of businesses that faced significant repercussions for lacking the data and evidence to back up their environmental claims:

Edgewell Personal Care (Hawaiian Tropic & Banana Boat)‍

In July 2025, Australia’s ACCC filed federal court proceedings against Edgewell, accusing the company of labeling over 90 sunscreen products as “reef-friendly” despite containing ingredients like octocrylene and homosalate which are scientifically proven harmful to coral reefs. Regulators found these claims lacked independent scientific verification and misled consumers for years. The case is ongoing.

Source: https://www.theguardian.com/australia-news/2025/jul/01/hawaiian-tropic-banana-boat-sunscreen-accused-of-greenwashing-by-accc-reef-friendly

Clorox Australia

‍In April 2025, Clorox Australia was fined AUD $8.25 million (approximately CAD $7.3 million) by the Australian Competition and Consumer Commission (ACCC) for misleading consumers about its GLAD “50% Ocean Plastic Recycled” garbage bags. The bags were marketed as containing recycled plastic collected from the ocean, but in reality, the plastic was sourced from communities up to 50 km inland. The court found that the misleading claims deprived consumers of the opportunity to make informed purchasing decisions.

Sources:

‍https://www.reuters.com/sustainability/australian-regulator-sues-clorox-over-false-claims-ocean-plastic-bags-2024-04-18/

https://www.accc.gov.au/media-release/clorox-ordered-to-pay-825m-in-penalties-for-misleading-ocean-plastic-claims-about-certain-glad-products?

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Tyson Foods ‍

In 2024, Tyson Foods was sued in the U.S. for promoting “climate-smart” beef and ambitious net-zero goals without credible plans to achieve them. The lawsuit alleges these claims mislead consumers by overstating the company’s environmental progress. This case reflects growing legal scrutiny over agricultural and food-sector climate claims that rely on speculative or unproven sustainability promises.

Source: https://www.reuters.com/sustainability/climate-energy/green-group-sues-tyson-foods-allegedly-false-climate-claims-2024-09-18

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What’s the Risk to Consumer Sentiment?

Today’s consumers are skeptical and rightfully so. When a company is found to be greenwashing, trust plummets and loyalty is difficult to regain. Over half (54%) of consumers say they would stop buying from a company if they were found to have been misleading in their sustainability claims, according to a 2023 study from KPMG UK. Similarly, a 2023 survey by Deloitte found that 57% of Canadian consumers don’t believe most green claims brands make.

Worse yet, the fear of being called out has triggered a trend known as greenhushing—when companies stay silent about sustainability efforts to avoid scrutiny. While intended to mitigate risk, it often backfires by stalling transparency, eroding trust, and slowing progress on real climate action.

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Is greenwashing now illegal in Canada?

With the passage of Bill C-59, the answer is increasingly yes. This legislation marks a major shift in how environmental claims are regulated, amending the Competition Act to prohibit vague or unsubstantiated green claims, like “eco-friendly,” “climate neutral,” or “sustainable”, unless backed by adequate and proper testing.

Crucially, the burden of proof now lies with businesses: companies must be ready to substantiate their environmental messaging with credible, globally accepted evidence. The Competition Bureau has also been granted expanded powers to investigate, challenge, and penalize misleading claims, making reputational and legal risks far more likely for those who can’t provide sound, verifiable proof.

While the law doesn’t prescribe a specific methodology, it demands transparency, scientific rigor, and adherence to recognized standards. For companies of all sizes, this is a wake-up call to rethink how they communicate climate impact and to ensure every claim can stand up to scrutiny.

How Can Companies Move Forward with Confidence?

Compliance today means going beyond good intentions. It’s about substantiating every claim with evidence, transparency, and accountability. To avoid both greenwashing and greenhushing, companies must take a proactive, credible approach to sustainability communications.

Here’s what that looks like in practice:

• Ground Claims in Science: Use methodologies aligned with peer-reviewed literature and recognized standards. For example: A company claiming carbon neutrality should publish its lifecycle emissions calculations, the offset methodology used, and details of the verified carbon project.
  

• Provide Transparent Data and Reporting: Share not just the outcomes, but the process and supporting data. For example: A tree planting initiative should disclose species-level data, planting dates, GPS coordinates, and survivability metrics.
  
  
• Seek Third-Party Verification: Validation from credible, independent organizations strengthens trust and reduces regulatory risk. For example: A brand promoting sustainable packaging should back it up with certification from recognized bodies like FSC (Forest Stewardship Council) or BPI (Biodegradable Products Institute).
  
  
• Avoid Vague or Generic Claims: Replace feel-good buzzwords with clear, specific language and quantifiable results. For example: Instead of saying “planet-positive,” say: “Our packaging is made from 100% post-consumer recycled paper and is recyclable curbside in 95% of North American municipalities.”
  
  
• Communicate with Confidence and Clarity: Don’t let fear of scrutiny lead to silence. Instead, speak transparently, with honesty about where you are today and how you plan to improve tomorrow. In a regulatory environment that demands proof, clarity is safer than silence.

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How veritree can help

At veritree, we’re committed to making it easy for businesses to take credible, transparent climate action:

• Scientific integrity: Our CO₂ sequestration estimates are grounded in species-level allometric equations and peer-reviewed literature.
  
  
• Verification and transparency: Every tree planting activity is supported by an evidence-based audit trail.
  
  
• Biodiversity insights: We’re integrating third-party data layers, including bioacoustics aligned with IUCN status, to measure ecological impact beyond carbon.

• As a B Corp, we adhere to rigorous standards of environmental and social responsibility.

As regulation increases and consumers become more discerning, businesses need partners they can trust. With veritree, you don’t just make claims, you back them up.

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Final Thoughts: Turning Risk Into Leadership

Bill C-59 is more than a compliance hurdle, it’s a call to raise the bar. In a world where trust is currency and scrutiny is high, the companies that will thrive are those that lead with transparency, back their claims with science, and invest in credible partnerships.

Greenwashing may carry a high price, but credible sustainability is a long-term investment, in brand equity, consumer trust, and climate impact. The path forward is clear: act boldly, communicate clearly, and prove every promise.

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