How to Make Defensible Environmental Claims Under Canada's Bill C-59

Canada's Bill C-59, the Fall Economic Statement Implementation Act, 2023, took effect on June 20, 2024, amending the Competition Act to introduce new anti-greenwashing provisions. The changes affect any business making public environmental claims in Canada, whether in advertising, on product labels, on a website, or in a sustainability report used for marketing purposes.

The law is not designed to stop companies from talking about their environmental performance. It is designed to ensure that what they say can be backed up. The Act requires that certain environmental claims about a business or its activity be adequately and properly substantiated before they are made. This blog is not a legal guide. It is a practical explanation of what that substantiation requirement means, which types of claims carry the most risk, and what defensible environmental claims look like in practice.

What changed under Bill C-59

The amendments introduce two new substantiation requirements for environmental claims, both of which came into force on June 20, 2024.

• Section 74.01(1)(b.1) covers product-level claims. Parties making public statements about a product's environmental benefits must support those statements with an adequate and proper test.
• Section 74.01(1)(b.2) covers business-level claims. Parties making representations about the environmental benefits of a business or business activity must base those statements on adequate and proper substantiation in accordance with internationally recognised methodology.

Critically, both provisions reverse the burden of proof. Under the old regime, the regulator had to prove a claim was false. Under Bill C-59, the company making the claim must be able to prove it stands up to scrutiny. 

Starting June 20, 2025, that exposure extends further. Private parties including environmental groups, competitors, and consumers can bring greenwashing claims directly before the Competition Tribunal, with actions able to cover claims made as of June 20, 2024.

Penalties for non-compliance

The Competition Bureau has made clear that the penalties for non-compliance are significant. An administrative monetary penalty can be assessed against a corporation for the greater of $10 million for the first order and $15 million for any subsequent order, and 3% of the corporation's annual worldwide gross revenues. The penalty applied is whichever of these figures is higher.

Beyond financial penalties, the Competition Tribunal can order a company to cease making the claim, publish a corrective notice, and repay affected parties. Even where no penalty is ultimately imposed, a Bureau investigation or private Tribunal application carries significant reputational and legal costs that are difficult to quantify in advance.

What "internationally recognised methodology" means in practice

The phrase "internationally recognised methodology" is not defined in the Competition Act, which creates real uncertainty for businesses trying to assess their exposure. The Competition Bureau published draft guidelines in December 2024 and finalised them on June 5, 2025. The final guidelines provide the clearest direction currently available.

For emissions-related claims, the Bureau points to established GHG accounting frameworks, particularly the GHG Protocol, as the recognised standard. For offset-based claims, Verra's Verified Carbon Standard (VCS) and the Gold Standard are referenced as credible substantiation frameworks. Where a recognised sector-specific methodology exists, for example in the built environment or financial services, using it strengthens the substantiation for claims within that sector. The Bureau's position is that businesses should choose substantiation that is suitable, appropriate, and relevant to the claim, and thorough enough to establish it. Third-party verification will be required where it is called for by the methodology being relied upon.

The more ambitious the claim, the more rigorous the substantiation required to support it. A specific percentage reduction claim against a defined baseline requires less documentation than a carbon neutrality claim, which demands full scope coverage, verified offsets, and a documented residual emissions position.

Common claim types and their risk profiles

Carbon neutral

Carbon neutral is one of the highest-risk claims a company can make. A defensible carbon neutrality claim requires full Scope 1, 2, and 3 emissions measurement, clear documentation of what residual emissions remain, and verified, high-quality offsets to cover them. Companies that claim carbon neutrality based on Scope 1 and 2 data only, without disclosing that Scope 3 is excluded, are most exposed.

Net zero target claims

Announcing a net zero target is not the same as substantiating one. The claim needs a documented reduction pathway behind it, not just a date. Validation through the Science Based Targets initiative (SBTi) is one recognised route. Without that pathway, a net zero commitment is a future claim with nothing currently behind it, and the burden of proof sits with the company making it.

X% reduction in emissions

Relative claims are lower risk than absolute ones, but only when the basis is transparent. A 30% reduction claim is defensible if the baseline year, the emissions boundary, the methodology, and the data sources are clearly stated and auditable. The most common vulnerability is presenting a Scope 1-only reduction as a company-wide figure without disclosing that Scope 2 and 3 are excluded.

Sustainable / eco-friendly / green

Vague terms with no measurable basis behind them carry the highest risk. Without a specific standard or criterion to point to, these claims are very difficult to substantiate under any recognised methodology and are the most likely to attract attention from the Competition Bureau or private litigants.

What defensible looks like: the documentation test

A useful way to assess whether a claim is defensible is to consider what documentation exists to support it if the Competition Bureau were to investigate tomorrow. A defensible claim typically has the following elements in place:

• A defined emissions boundary. State clearly what is included and what is excluded. If Scope 3 is omitted, say so. If the claim covers only part of the product lifecycle, declare the boundary.
• A recognised methodology. The GHG Protocol, ISO 14064, ISO 14067, or a recognised sector-specific standard should be the basis for any calculation. The methodology should match the type of claim being made.
• Documented data sources. Record where the underlying emissions data came from, including which emission factors were used and where primary supplier data was or was not available.
• Third-party verification where possible. Not always required, but it strengthens the claim significantly and is mandatory under some methodologies. Where verification has been obtained, state who carried it out and under which standard.
• Claims that reflect what the data actually shows. Selecting a favourable baseline year or a narrow boundary to make performance appear stronger than it is creates direct exposure under Bill C-59. 

Building and maintaining documentation is not just a substantiation requirement. It is the foundation of the due diligence defence available under the Act. That defence protects businesses that can show they took genuine, documented steps to ensure claims were properly supported before making them.

What this means for sustainability programmes

Bill C-59 does not prevent companies from talking about their environmental performance. It requires that what they say can be backed up. Companies can only claim what they can show, and every public environmental claim is now a potential liability without the data and methodology to support it.

The businesses most exposed are not those that communicate too much, but those that communicate things they cannot substantiate. Better data supports better claims, stronger disclosures across frameworks including CSRD and CSDS, and more informed business decisions. Measurement rigour is not a compliance cost. It is what makes a sustainability programme credible.

How Zevero can help

Defensible claims under Bill C-59 depend on three things: a recognised methodology, traceable data, and documentation that can be produced on demand.

Zevero's carbon management platform produces GHG Protocol-aligned emissions calculations across Scope 1, 2, and 3, with full methodology documentation and traceable data sources built into every calculation. For companies that need to structure existing data into framework-aligned disclosures, our AI-powered ESG Reporting Tool converts your documents into audit-ready reports.

For companies assessing whether their current data meets the Bill C-59 substantiation standard, speak to the Zevero team.