Blog Post

This blog was authored by Vanessa Paesani, Executive Director, UNB’s Pond-Deshpande Centre

What New Brunswick Businesses Need to Know About Greenwashing

A few weeks ago, I was at an event where an organization was publicly accused of greenwashing. It was a reminder that this is no longer a theoretical risk. While there’s plenty of finger-pointing about who the real bad actors are, the regulatory landscape doesn’t care much about intent.

Scrutiny of environmental claims is increasing; enforcement pathways are multiplying, and the standard for what counts as substantiated is higher than most people realize. Small and mid-sized organizations are not exempt and must be thoughtful. Organizations doing the work should say so; customers care, and credible sustainability claims, done right, can be a real competitive advantage.

If your organization makes any kind of environmental or sustainability claim on your website, in a pitch deck, on your packaging, or in a social media post, Canadian law now has something to say about it.

As part of our Green Horizons Project, the PDC hosted Conor Chell, Partner and National Leader in Sustainability, Environment and Regulatory Law at KPMG Law LLP, for a session this spring on greenwashing and Canadian competition law. Here are the takeaways that matter most for our province’s business community:

 

Greenwashing Is Broader Than You Think

Greenwashing tends to conjure images of big corporations making claims they know to be false. But the legal definition reaches well beyond deliberate deception. It includes exaggerated or empty claims, vague language like “sustainable” or “eco-friendly,” misleading visuals, and data omissions. The problem cuts both ways: companies get scrutinized for overstating environmental benefits and for downplaying negatives. As an example, if 13% of your workforce in a male-dominated industry are women, and your marketing consistently leads with images of women in hard hats, that gap between impression and reality is the kind of thing regulators are now looking at. The Competition Bureau applies a “general impression test”, which means what’s important is not what you meant to say, but what a reasonable, ordinary consumer would take away from it.

New Brunswick businesses operating in forestry, energy, agri-food, and manufacturing, sectors where sustainability claims are increasingly common in marketing and funding applications, should pay particular attention.

The Law Has Real Teeth

Canada’s anti-greenwashing provisions under the Competition Act have been in force since June 2024. Penalties for corporations can reach millions of dollars, or three times the value of the benefit derived from the deceptive conduct, or 3% of worldwide gross revenues, whichever is greater.

On March 26, 2026, the Budget Implementation Act, 2025, No. 1 received Royal Assent, enacting key amendments to the Competition Act. These changes provide greater flexibility for businesses substantiating environmental claims and prevent private parties from directly challenging those claims before the Competition Tribunal. That is good news for businesses, but it does not mean the risk has gone away.

The core prohibition on deceptive marketing remains fully intact. The burden of proof is still reversed: it is on your organization to prove your claims are substantiated, not on the regulator to prove they aren’t.

A Nova Scotia renewable energy company was recently the subject of a public complaint to the Competition Bureau over claims about green hydrogen and near-zero emissions. For NB businesses exploring the clean energy space, that case is worth watching closely.

Supply Chains Are In Scope

Greenwashing liability extends to supply chain claims. If you say your product is responsibly sourced, or your suppliers meet certain environmental or social standards, those claims need to be substantiated, even if your suppliers hold certifications. For New Brunswick companies in sectors with complex or cross-border supply chains, this is a real exposure.

The same logic applies to origin claims. “Made in Canada” and similar labels are subject to the same scrutiny as environmental claims, which means if the materials, components, or labour behind your product don’t support that label, the claim can be challenged. For NB manufacturers and producers who use “Made in Canada” as a market differentiator, it’s worth making sure the story behind the label holds up.

Consumers and procurement decision-makers increasingly rely on third-party tools to verify what organizations are actually doing, because claims alone no longer carry the weight they once did. If your stakeholders need outside help to trust you, that’s worth reflecting on.

A Practical Path Forward

Chell outlined five practical steps for organizations navigating this landscape:

  • Formalize how you avoid greenwashing and put a process in place, so that you’re not relying on good intentions.
  • Track your product and service claims, and make sure whoever is responsible for marketing knows what can and can’t be said.
  • Compile documentation and evidence as you go.
  • Watch how you talk about your organization as a whole. Claims about your business overall, like net zero commitments or sustainability leadership, carry stricter substantiation requirements than claims about a specific product or service.
  • Monitor the landscape, because greenwashing rules are still evolving globally.

The law doesn’t stop you from marketing your sustainability work. It just requires you to be able to back it up. For NB businesses that are genuinely doing the work, that’s not a burden, it’s a competitive advantage. The goal, ultimately, is to increase trust between businesses and the public. And in a province where relationships and reputation travel fast, that’s worth something.

Follow Along

To learn more about these conversations and to receive updates, subscribe to the Pond-Deshpande Centre’s Newsletter, here.