How Will New Anti-Greenwashing Laws Affect the Forest Industry?
What counts as “misleading” can be subjective. However, the forest industry is well-positioned to tell its story.
Greenwashing (noun): the act of making false or misleading statements about the environmental benefits of a product or practice.
While defining greenwashing in a sentence is straightforward, defining it in legislation is much less so. Outright lies can be readily spotlighted, but what about green claims that are vague, selective (i.e., that disclose only part of a product’s environmental impact), or lack concrete proof?
A growing legislative trend is to put the onus of proof on the companies doing the marketing. But even then, there is a “gray area” in determining what is required under the law. How much proof is enough? Different counties are taking different approaches to determining this.
Canada vs. the EU: Two Approaches to Anti-Greenwashing Legislation
Several countries around the world have introduced anti-greenwashing policies in recent years. While this article provides just two examples (Canada and the EU), anti-greenwashing and related laws have also been emerging in the UK, the US, and many Asian countries.
In Canada, Bill C-59 (which became law on June 20, 2024) expanded upon the deceptive marketing practices provisions of the Competition Act. In brief, the law now requires environmental claims about products, businesses, and business activities to be accompanied by “an adequate and proper substantiation in accordance with internationally recognized methodology.” Further, as of June 20, 2025, the law’s “Private Rights of Action” provision will allow individuals or groups to file complaints directly with the Competition Tribunal. Previously, complaints had to be advanced by the Commissioner.
In the EU, two laws are emerging: the EU Directive on Empowering Consumers for the Green Transition (ECGT), and the EU Green Claims Directive (GCD). Both are expected to become law in EU member nations by 2026.
The ECGT sets out requirements for green claims in advertising and requires consumers to be informed about the durability and repairability of products. Vague claims (i.e. “environmentally friendly”) are banned, and specific claims must be backed by verifiable evidence. Further, firms cannot claim to be “carbon neutral” if those claims are based on carbon offsets rather than actual emissions reductions.
The Green Claims Directive (GCD) provides further detail about exactly what sort of evidence is required (see Box 1). Companies will be required to have third parties verify their claims.
Box 1: Excerpt from an EU briefing note on the Green Claims Directive
In both jurisdictions, fines for non-compliance will be steep: up to C$10 million (or up to 3% of the company’s worldwide gross revenue) in Canada, and up to 4% of the company’s annual revenue in the affected member nations in the EU.
Vague Definitions vs. Exhaustive Requirements
Both the Canadian and the EU legislation have been cause for concern in the business community.
In Canada, the vague wording of the legislation has been companies’ primary complaint. Shortly after Bill C-59 was finalized, the Pathways Alliance, a consortium of Canadian oil and gas producers, removed all content from its website in protest of the new legislation. At issue is the wording of the new legislation. What exactly constitutes an “adequate and proper” substantiation, and what happens if there is currently no “internationally recognized methodology” for the environmental claim in question (or there are multiple, contradictory standards)? The companies in the alliance have been working towards reducing their carbon footprint through carbon capture and storage, a yet unproven technology. Under the new legislation, their environmental claims could be deemed as “unsubstantiated” and hence illegal.
In the EU, the ECGT and GCD have yet to come into effect. However, the International Chamber of Commerce (ICC) has publicly expressed concerns over the GCD. In particular, the requirement that environmental claims be third-party verified before companies can state them publicly (also referred to as an “ex-ante verification process”) is expected to result in an increased administrative burden and costs for ICC members. Third-party certification could also lull companies into a false sense of security, as the verification certificates cover specific environmental claims and not the marketing messaging as a whole.
The result of both the Canadian and EU legislation is expected to be the same: rather than risk being branded as “greenwashers,” companies instead may opt to truncate their environmental marketing campaigns. While consumers will see less greenwashing, they will also see less information in general. This will make it harder for them to assess the environmental impacts of the products they buy.
Greenwashing Accusations in the Forest Industry
Should the forest industry be worried about emerging anti-greenwashing laws? While we’re not necessarily at greater risk than other industries, we do make public claims about the “greenness” of our industry. These claims will likely be carefully scrutinized by environmental organizations.
To date, the most common accusations of greenwashing in the forest industry have been toward sustainability certification systems, particularly industry-initiated systems such as the Sustainable Forestry Initiative (SFI) in North America and the Programme for the Endorsement of Forest Certification (PEFC) in Europe. For example, in December 2022, a group of eight environmental organizations filed a complaint against SFI to the Canadian Competition Bureau. In brief, they alleged that SFI’s sustainability claims were misleading, as in their opinions the system emphasized process-based criteria at the expense of outcome-based criteria. SFI responded that the complaint was unfounded, as the SFI system does indeed include outcome-based criteria, as well as process-based criteria.
Given that similar complaints filed with US Federal Trade Commission (FTC) found SFI was not misleading the public, the Canadian complaints will also likely result in a “no violation” decision. However, the complaint is an example of how environmental claims can be vulnerable to criticism. If we state that our practices are sustainable, the next questions will be “says who?” and “prove it.” When this happens, the industry must be ready with answers.
The Forest Industry Is Well-Prepared for Scrutiny
While emerging anti-greenwashing laws will make doing business more complicated for everyone, the forest industry may in fact be better prepared than many other industries. While external scrutiny of our marketing messages may be relatively new to us, we have had to respond to scrutiny of our operations for a long time. As we don’t expect our stakeholders to unquestioningly accept our forest management, we are aware that many people may be critical of our environmental claims, too.
In addition to thinking about our marketing messages, we’ll also need to consider our marketing processes. The forest products supply chain has many links. Those of us who work at the “upstream” end of the chain (i.e., in logging or primary manufacturing) may need to communicate more frequently with our downstream counterparts – such as those in secondary manufacturing and distribution1. That way, the environmental messaging that emerges will truly represent all the links on the chain.
While marketing the green benefits of forest products is about to get more challenging, the forest industry can’t let these challenges dissuade us from our efforts. Wood building materials have plenty of competitors, as do paper and other forest-based products. Furthermore, the media is rife with not-so-accurate negative pictures of our industry. If we don’t tell our own story, someone else will tell it for us.
Disclaimer: This article is not meant to constitute legal advice.
Note that the two new EU anti-greenwashing laws cover business-to-consumer (B2C) marketing only. B2B marketing is actually covered by a separate EU regulation.