Last week, the European Commission confirmed it plans to scrap its so-called “Green Claims Directive.” The proposal was designed to crack down on corporate greenwashing — companies making vague or misleading claims about how environmentally friendly their products are.
At first glance, that might sound like a worthy goal. Who wants false advertising? But the plan quickly ran into trouble, especially from smaller businesses who warned it would add layers of red tape, compliance costs, and legal risk.
In fact, the Commission itself admitted that as many as 30 million micro-enterprises could end up having to comply with the rules. Even with exemptions written in, the direction of negotiations pointed to increased burdens, not clarity. The result? A lot of businesses — even the well-intentioned ones — would stop talking about their environmental practices altogether, just to stay out of legal trouble.
Czech economist and tax expert Danuše Nerudová, a member of the European Parliament and a lead negotiator on the file, put it plainly: “I welcome the fact that the Commission has listened … and hope this opens the door to a more balanced and effective approach.” The proposal, she said, was “overly complex.”
If that sounds familiar, it should.
Canada’s own Bill C-59, which came into force this month, is already having a similar effect. The bill, which changes the Competition Act to target “greenwashing,” makes it legally risky for companies to say anything about their climate efforts unless they have airtight, independently verified proof — the kind often only available to large companies with big legal budgets.
At Resource Works, we’ve heard from organizations who’ve made the decision to stop communicating about environmental performance entirely. Not because they’ve done something wrong — but because the rules are vague, expensive to follow, and expose them to complaints even when acting in good faith.
That’s a loss. For consumers, for environmental progress, and for transparency.
Canada should be encouraging companies to communicate openly and credibly about their sustainability performance — not shutting down those conversations with threats of litigation. The European Commission has now acknowledged that its own approach, despite good intentions, risks backfiring. It’s time for Ottawa to take a similar step back.
With Prime Minister Mark Carney under pressure to unleash Canadian potential in the resource sector, revisiting Bill C-59 would be a sign of both good faith and practicality. Canada needs more innovation, more investment, and more real progress — not more reasons to say nothing.
It’s time to recycle Bill C-59 into something that actually supports good environmental practice instead of stifling it.
