Decade Webinar: Greenwashing, Greenblushing, and Implications of Bill C59 for Canadian Businesses
Kristy O’Leary, Chief Strategist
Thank you all for coming. Today, we're going to talk about greenwashing and greenblushing, and specifically how companies can navigate Canada's new greenwashing legislation.
For those of you that don't know us, we are Decade, and we're very happy to be able to share this information with you today.
Before we get started, we do want to always acknowledge the land. We're speaking to you today from Vancouver, BC, which is situated on the unceded, stolen and never surrendered territories of the xʷməθkʷəy̓əm (Musqueam), Sḵwx̱wú7mesh (Squamish), and səlilwətaɬ (Tsleil-Waututh) Nations. These Coast Salish people have been stewards of the land since time immemorial. This land acknowledgement is just one small but very important step towards reconciliation. We have lots of opportunities to engage in reconciliation and encourage you to look at the truth and reconciliation commissions’ recommendations. Our invitation to everyone with us today, as we approach the National Day for Truth and Reconciliation in Canada, is to reflect on your own relationship with the Indigenous territory and lands that you occupy, and to consider how you can actively support indigenous rights and sovereignty in your daily life and work.
At Decade, we’re in business because we believe this is the most important decade in human history and we all have a part to play in in leaving the world better. Our thesis is that every business can leave the world better than they found it, every person deserves to feel the delight of change making, and absolutely anything is possible.
And we have a Code to share with you; that first element is perfect as the enemy of good. We don't have to solve all the problems right away. We just need to get things moving.
Next, Goodbye Ego. Ego's kind of got us into this. Hopefully, we put our egos aside, we can move through this and get out of it.
Yes, and. We're generative thinkers. I think the world tells us, no, you can't use business to leave the world better. We believe we can. We believe a lot of things that are seemingly impossible are possible.
Don't be afraid of the shadows. This is really important when we're thinking about impact measurement and awareness and understanding what our companies are made of and the real value we're creating. We approach that with a very generative mindset, but we also understand that sometimes we find things that make us uncomfortable.
Change making is delightful. Don't do it alone. Do it with your team. Do it with your community. And because this is the most important decade in human history, move fast - time is of the essence.
I want to just highlight my colleagues today on the call. Michelle Austin is here with us. She's our Manager of Impact Strategy here at Decade, and Mairin is actually going to be taking us through this whole presentation today and put a lot of love into the preparation. She is our Senior Impact Consultant here at Decade.
One thing I’ll say before handing it off to Mairin is that we have a lot of content to cover, this is a very dense presentation. We want your questions and we have reserved space at the end of our call for those questions. So please feel free to put them in the chat, write them down on notes, and we'll do our best to answer any questions at the end with about 10 minutes left at the end of the presentation.
Mairin Shields-Brown, Senior Impact Consultant:
Super excited to be here with you all today. I’m going to be guiding us through our session today focused on greenwashing as well as the new Canadian legislation that focuses on it, what that means for all of us today, and how we can move forward.
So just quickly our agenda, we are going to start with if anyone's been to a decade session or in a workshop with us, we love context setting so we'll start with a brief history of greenwashing so where we've been in the past and where we are today.
Then we'll focus on what the landscape of policy advancements and implications for businesses looks like internationally and then as well in Canada focusing on Bill C-59.
Then we will switch gears to our solutions-oriented part of the session focused on impact reporting, both as a tool for risk mitigation and delightful storytelling. We'll share some tips and tricks for all of you on how to get started with this as well as some amazing examples we always love to share. And lastly, we will share our recommendations next steps for those in our Decade client community, as well as all of you who have attended today. We will reserve a little bit of time for a Q&A at the end of the session. So please feel free to put your questions or thoughts in the chat as we go along.
So, starting with our brief history and a few definitions. On the slide here, we have Mark Twain and a quote of his that we love so much.
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
Which is so true when it comes to greenwashing and, as consumers and business owners, the things that businesses and industries communicate to us, it's hard to know what's true and to know who to trust. Today, we'll address both these greenwashing and green blushing, and how to avoid them and approach them within your business.
To provide a little further context on greenwashing, as a concept, this is something that we love to cover in some of our other workshops as well, is these seven deadly sins of greenwashing.
First, the sin of the hidden trade-off, committed by suggesting that a product is green based on an unreasonably narrow set of attributes without attention paid to other important environmental issues. For example, paper is not necessarily environmentally preferable just because it comes from a sustainably harvested forest.
Next, the sin of no proof. This is simply committed by an environmental claim that cannot be substantiated by easily accessible supporting information or a reliable third party certification. That's a really important one that we will focus on when it comes to the new legislation in Bill C-59.
The sin of vagueness, third, which is committed by every claim that is so poorly defined or broad that it's real meaning is likely to be misunderstood. For example, when we see “all natural” claims made by companies.
The sin of irrelevance, so this is committed by making an environmental claim that might be truthful but is unimportant or unhelpful for consumers when seeking environmentally preferable products.
The lesser of two evils kind of speaks for itself but is committed by claims that might be true within the product category but risk distracting the consumer or the kind of reader from the greater environmental impacts of the category as a whole. Organic cigarettes would be an example of that if they exist.
The sin of fibbing, committed by making environmental claims that are just simply false.
And, the last sin there of worshiping false labels, is committed by a product that either through words or images gives the impression of third-party endorsement where no such endorsement actually exists.
Now, we’ll get into some examples that really help to contextualize what greenwashing looks like in practice starting in the early days. While the term greenwashing wasn't coined until later in the 20th oil and gas companies and the fossil fuel industry, Standard Oil is just one example.
Since the late 1800s, fossil fuel companies have been using imagery and advertising to soften their industrial image. Specifically speaking about gasoline, which today it's kind of interesting how these companies were able to get away with things like that.
In the 1930s, Shell Oil also explored environmentally focused advertising showcasing the company within natural environments and their logo all over it, which is quite interesting.
And when we think about greenwashing and its history, we did want to highlight today that for multiple decades, the fossil fuel industry has been perpetrating a multi-billion dollar disinformation propaganda and lobbying campaign to delay climate action by confusing the public and policymakers about the climate crisis and its solutions.
This has involved a remarkable array of advertisements with crazy headlines ranging from lies they tell our children to unsettled science and other stuff like that.
Again, this is really challenging because it puts and has put for years consumers, the public, in a tough position of who can we trust and what information is true.
And another contextualizing piece here with the fossil fuel industry is that at the intersection of the fossil fuel producers, climate change, and greenwashing, the fact that it is just 100 companies that are responsible for 71% of global emissions.
That's a really powerful statistic, and these more or less are the same companies from the same industry that has been running these ads clouding climate denial since the 1980s, AND so many of which are hoping that we will forget that because they're the same companies that have recently had to take down so many of their sustainability claims from their websites as a result of the greenwashing legislation.
So, switching gears a little bit, we jump forward. to the 1970s, 1980s. This is when we start to see in response to greenwashing, but also just, you know, generally, the rise of the Grassroots Mobilization, the first Earth Day in 1970, and the actual term greenwashing was coined in 1986 by Jay Westerveld here on the screen.
The term was inspired when Westerveld was looking at hotel practices and the fact that they always highlight and ask guests to reuse their towels for environmental reasons, while at the same time the hotel industry, was expanding their operations, heavily emitting, and having a large environmental impact. But when it came to marketing environmental claims, hotels choosing to focus on that very small kind of piece related to towel reuse.
Jump forward again to the 1990s early 2000s, the 20th anniversary of Earth Day, we saw a huge surge in environmental product claims at this time. Approximately one fourth of all new household products advertising themselves is either recyclable, compostable, environmentally friendly. During this decade, we also saw BP (British Petroleum) rebranded, very famous example of greenwashing, to Beyond Petroleum, despite the fact that very minimal to no investment in renewables, compared to of course their investment in fossil fuels as a producer.
And this is the era in which we really do start to see increased scrutiny and first drafting of guidelines and certifications for environmental claims.
I'm sure this is an example that's familiar to many of you. We'd love to highlight this one. 2015, Volkswagen's emissions cheating scandal. As shown on the screen here, this is when Volkswagen got caught and that they revealed systematic cheating on carbon emissions tests.
It became one of the most significant examples of greenwashing to date. They installed defeat devices in millions of diesel-powered cars. This advertisement was just one of many – an example of a really well-known company getting caught greenwashing.
So, that inspired further kind of crackdown on greenwashing. Enter the 2010s, significant increase in public awareness of greenwashing and for responding for brick criticism.
In addition to the Volkswagen scandal happening in this decade, this is the first time that lot of fast fashion brands started being called out for launching sustainable collections amid unsubstantiated sustainability claims. All of this also occurred in the same decade that the Deepwater Horizon disaster happened, which was shortly after British Petroleum rebranded to Beyond Petroleum. Little bit of irony there.
And this is also when we start to see the rise of green blushing, which at the end of the day is bare because at this point so many things have happened that would potentially instill fear for companies to make claims and when they're not sure how to substantiate them, and maybe it feels safer to stay silent rather than and share about the things that they're doing socially or minimally.
Present day, we are now seeing increasingly large and significant complaints filed against big actors, including banks and large corporations, lawsuits over greenwashing, etc. We are also seeing increasingly stricter legislation to mitigate greenwashing and require transparent reporting, which is what we're going to get into when we talk about Bill C-59. Consumers and environmental activist groups alike are demanding action, coming out and standing tall to criticize what a lot of these companies have been doing for many years.
A case study of this in the last few years is Stand.Earth asking Canada's competition tribunal to scrutinize Lululemon and some of the claims that they make about environmental impact in their supply chain as well as labor practices.
There are so many examples that we could share, but really the takeaways that greenwashing has been happening for a long time and we were finally seeing government of Canada as well as civil society and consumers generally wanting to demand better and that there are finally kind of real consequences for this.
And for green blushing - we actually don't have any examples of this because the green blushes stay silent and so these are companies that don't share the positive impact that they're creating through their product services or business model. These are the shy guys!
A little later, we’ll discuss the antidotes to both greenwashing and greenblushing and how to leverage transparent reporting as a solution for all of you who are impactful out there to share where you're at in your impact journey and the amazing things you're doing in one way or another.
Now we're going to switch gears a little bit from the history of green blushing and bring us forward to today and what the landscape of policy and legislation looks like in the specific context when it comes to reporting on sustainability and claims made by corporations or other entities.
There have been more introductions to climate disclosures required. for some climate related financial disclosure has been around for a while, but it is being kind of rolled out more frequently.
The EU has had regulations around due diligence for environmental impact in human rights for many years, and the West is now kind of starting to catch up with the regulations that are being introduced, one of which through Bill C-59.
In Canada, corporate diversity reporting is also being mandated and introduced on a voluntary basis by many companies. We've also seen Bill S-211, Canada’s act on modern slavery introduced a year or two ago for supply chain reporting as well.
This is in addition to many other frameworks and fund disclosures, some specific to large kind of emitting industries, some specific to the financial industry.
Generally, we are seeing this rise in policy specific to sustainability related impacts and operations of businesses. And so – we want to just share a little clip of the UN Secretary General Antonio Gutierrez, which is powerful.
Antonio Gutierrez, UN Secretary General (Video Transcript)
“Before I begin, allow me to say a quick word about the announcement yesterday from several members of the oil and gas industry as is the first public occasion in which I can do it.
The fossil-fuel industry, the giant behind the climate rises, is finally starting to wake up. But the promise is made clearly fall short of what is required. The commitment on the elimination of methane by 2030 is a step in the right direction. But the announcement to achieve net zero by 2050 says nothing about eliminating emissions from fossil-fuel consumption, the so-called Scope 3.
Science is clear. We need to phase out fossil fuels within a time frame compatible with limiting global warming to 1.5 degrees Celsius. In addition, yesterday's announcement provided no clarity on the pathway to reaching net zero by 2050, which is absolutely essential to ensure integrity.”
There must be no room for greenwashing.”
Mairin Shields-Brown, Senior Impact Consultant
And that's what we wanted to share from that little clip. Antonio goes on to speak for many, many minutes on a lot of these important topics related to climate action and the urgency of businesses and sees governments worldwide to act now.
We thought that anecdote he gave about fossil fuel companies and greenwashing tied really well into framing this legislation in Canada that has been introduced as of this year.
Bill C-59, the new Canadian greenwashing legislation as some are calling it and some articles online are speaking to it about. It reflects amended sections of Canada's Competition Act. It received a Royal Ascent on June 20, so it's been in place now for a few months.
Essentially, the provisions in the bill, include increased requirements for businesses, corporations, when it comes to the claims they make related to social and environmental impact.
So, those new provisions will highlight a few of these pieces today in the webinar. I will also say as a caveat, that at Decade, we're experts and in sustainability advisory for businesses, as well as supporting companies through a B Corp certification and many other things as well. We are not experts from a legal perspective with respect to the changes to the competition act. And as I'll highlight on this slide, there are a few areas that require further clarity from Canada's competition bureau and the competition journal on bill C 59 specifically so happy to discuss questions at the end of this. Ultimately, we do just want to give you a little insight into our understanding of what this legislation really means.
To highlight the three main changes that have to do with getting the green washers out of here, the first is that now adequate and proper testing requirements have been introduced for any environmental claim or benefit of product or service. Any claim made must be substantiated through reliable and scientifically acceptable methods. If you are going to make a claim related to something environmental or social related to your business impact, companies should be prepared to provide transparent documentation of how things were tested, what data was collected, the analysis performed, and conclusions drawn.
The second provision requires alignment with international standards. To ensure uniformity and reliability, any environmental or social claim or benefit must align with or conform with internationally recognized standard. This is a specific area that when it comes to which internationally recognized standards are allowed here, further clarity is needed from Canada's Competition Bureau and Competition Tribunal.
There has not been a case law example of this bill being brought forward in Canada's Supreme Court or other courts as well and so we'll give a few examples from our perspective, some credible and really strong international standards that we would recommend to map or align your sustainability claims with.
The last new provision is related to private rights of action. In simple terms, Bill C-59 now permits and allows individuals, environmental advocacy groups, and other passionate folks to bring forward greenwashing claims directly to the Competition Tribunal, which will just further accelerate the opportunity for companies to really be kind of brought to the stand and consequences where appropriate.
To highlight from our perspective and our expertise, some of the more well-known internationally recognized methodologies for mapping social and environmental impacts of your business. We have the ISO standards, which I'm sure many of you are familiar with, greenhouse gas protocol, science-based targets initiative, global reporting initiative, so GRI, carbon disclosure project, CDP, task force on climate-related financial disclosures, TCFD, and a few other kind of third-party certifications here, including the B Corp certification.
We'll get into a few of these a little bit more later. But when it comes to internationally recognized methodologies, this is the guidance we would give at this time. Again, there is further information and clarity required from the government on what ones are officially recognized, but from our expertise today this is what we offer.
So, as I said before, the bill did receive relevant in June of this year, that means that it is real today here in September.
Who needs to comply with the requirements in this bill? All businesses of all sizes, making any kind of benefit claims, environmentally or socially, need to be acting in compliance with Bill C-59. One thing I will say from a “re-between the lines perspective”, is that the provisions in the Bill are definitely there to focus on reducing greenwashing claims made by heavily emitting industries, including fossil fuel producers.
There is a particular focus on carbon emissions reduction, sustainable sourcing and production, waste reduction and energy efficiency. And when it comes to legal and financial repercussions for non-compliance, when it comes to fines and penalties and companies or industries being brought forward to have these consequences implemented, the focus from our understanding will be first, of course, on these very heavily emitting industries that are having a large, large impact on the environment and society in a negative way.
So companies that fail to meet the substantiation requirements of any claims, that they're making the first instance, either $10 million or 3% of annual worldwide gross revenues, whichever is larger. Those are the penalties for the first offense and then for subsequent offenses, penalties can be as large as $15 million or again, 3% of annual worldwide gross revenues. For individuals with these claims, the penalties can be greater than $750,000 Canadian or $1 million for each subsequent order as well and same whatever's larger, 3% of annual worldwide gross revenues.
So, when it comes to who is really first facing these repercussions and consequences, fossil fuel giants are already feeling it. Pathways Alliance, the largest coalition of major oil sands companies in Canada. has already taken down all of their public claims related to sustainability online
A lot of this has come with criticism of the legislation by fossil fuel giants, that the legislation being implemented by the government is silencing them, etc. Simultaneously, see many environmental and health organizations as well as the government welcoming Bill C-15-9's passage into law and really backing it up.
While there are still aspects that require clarity from the government around what does the legislation mean and what are some of those internationally recognized methodologies that we can lean on for mapping our business impacts, the short-term impacts of this bill are already clear.
In conclusion, it’s really good to see that this is something the government has acted on. It's been passed through and we're looking forward to seeing where it goes. Lastly, I’ll just mention here that all reporting, certainly in Canada when it comes to environmental and social claims, still remains voluntary. Thus, fossil fuel companies could just pull all of this information down from their websites as needed, because the reporting was voluntary from the beginning to have that information on their websites. Bill C-59 is the first time we are seeing legislation with potential to stop the spread of misinformation and false truth-telling to consumers and the world by green washers.
So, to share some quick tips to consider when just engaging in your day-to-day business operation as antidotes to greenwashing, first, start with the truth! Green claims or social claims shouldn't start in the marketing department before spending a better story, build positive practices in your business from the inside out.
Making your claims material and great sized, so not overemphasizing on one green attribute, if you're more significant areas of business don't follow suit.
Transparency is key. We have some great examples of companies who have been engaging in impact reporting, and transparency, for better or for worse, has really helped grow their businesses.
Again, engaging your stakeholders, so continuing to an active corporate citizen and engaging with your consumers, your team, community, environmental stakeholders, investors, etc.
And lastly, seeking third-party verification. This is a really important one. I know many companies in the room today business owners do have third-party verification at the level of their company or are interested in it! We see this one as a very important antidote to greenwashing.
All of these antidotes aim to underpin trust, and the idea of building this with your consumers, the users of your products and service, your team, the community, and everyone who interacts with your business.
The antidotes to greenblushing are very similar to greenwashing. The only real difference I would say is that you've got to just start, and so our hope today is that for those of you who might feel like you're in the space to begin sharing more about the impact story of your business and the great things you are doing. We hope to provide a little bit more guidance on how to share some of those claims and feel strong about them!
That's what we're going to get into now and talk about impact reporting and some best practices there. This is the solutions-oriented part of this webinar, as a key antidote to greenwashing and to comply with Bill C-59. We see this as a tool to support risk mitigation, and engage in delightful storytelling at the same time about our unique kind of impact we're having on the world and our businesses. At Decade, we feel very passionate this topic and get a lot of joy from supporting companies through the process.
A quote from Joseph Campbell is that “people forget facts, but they remember stories.” Every brand communication that you have through your business is an opportunity to report on impact. Stories are always, and so the time is now for us to live into those stories and give people a reason to believe in something. Just like Antonio, who was saying is that the urgency is unbelievable right now with what's happening in the world.
And so, the time is now, this is your call to action to tell your story to the world! When brands don't have anything to say or, you know, communicating anything related to impact, it's likely because they aren't doing anything inspiring or we're talking about.
All of you impact business leaders in the room can say differently – and we want to be able to support you in knowing where to start.
Maybe some of you in the room have explored impact reporting before, especially those of you who are B Corp certified and maybe haven't specifically done impact reporting but are aware of the concept and already have so much of the data required.
We recommend starting with communicating your unique mission, vision, and values to level sets. And then as we talked about with Bill C-59, describing the way that you impact the world socially or environmentally with specific and verifiable claims.
Those metrics and data pieces that you're measuring within your business, whether it's to report for your B Corp certification, or just for other things on an annual or quarterly basis, those metrics are incredibly powerful.
And we will show some examples of some really great impact reports from famous impact companies that are effectively communicating the positive impact they're having on the world, often through metrics. We'll also show some examples of companies sharing their goals with truthful and measurable progress. Something important to mention is that Bill C-59 doesn't necessarily mean that companies aren't allowed to share their goals or ambitions that they have around emissions targets or changes they want to make within their supply chain – the requirement is more around these goals and claims being substantiated with measurable indicators for progress and truthful storytelling around how your company is going to get there, and progress made to date.
The first example I’ll share, which I'm sure many of you are really familiar with, is Dr. Bronner's. They are an iconic impact company, with a legacy stretching from the 1940s all the way to today. Their bottles adorned with a very unique philosophical kind of manifestos reach everything about the impact story of the company which is amazing.
And when it comes to their impact reporting in 2017, they released this very metrics and graph and visual kind of delivery that is reflective of their manifesto on their bottle designs, quite interesting!
Just another few screenshots of what their impact reports have looked like to date, really highlighting the importance of these metrics.
The numbers tell an amazing story as well, and when it comes to what's required to substantiate environmental or social claims, metrics are a really, really good way to do that.
When it comes to more social claims and Dr. Bronner's response to the Black Lives Matter movement in the 2020s as well, they did leverage their impact report to communicate and tell their own powerful story about what this means for their business and how they're going to go about addressing it and moving forward as well.
Your impact report is just another way for you to create something beautiful that your users, potential future team members, consumers, and others can engage with and learn more about your business.
One other example I'll show which we love so much is Patagonia, another impact company that has been around for a long time. Their origin story goes that an old dirtbag climber takes on the climbing industry to create better products, fights the haters and evangelicals, tells the world not to buy stuff, they do anyway, sues the president of the United States and then gives away a billion dollars.
The crazy story of Yvon Chouinard is up there in terms of Decade icons and folks that we look up to.
Here are some metrics shared in recent Patagonia impact reports, metrics similar to Dr. Bronner's that they shared in their impact report. In 2020, Patagonia actually found themselves at the center of a little bit of a controversy when they openly shared information about how in internal audit of some of their vendors overseas, the labor conditions weren't up to the standards that maybe they had been claiming before that they were aware of.
They openly communicated in a transparent way about what they were going to do about it, which actually led to a 25% increase in sales that year. Not necessarily perfect correlation and causation here, but nevertheless it's a great example of how a company confronted and addressed its shortcomings to build trust with its customers. And, you know, hopefully is inspiring other companies to do the same as well.
That’s the short and sweet on the impact reporting we love! We do want to leave time for questions and answers, but I'll just share a few key recommendations and next steps before we get into that as well.
So, start your impact reporting. That's where we want to leave all of you from the session today going forward.
If you're a B Corp or you're looking into B Corp certification or other impact frameworks, you already have so much of what's required and what’s required to substantiate a really strong impact report through the metrics that you need to be tracking to report on the certifications.
When it comes to setting those metrics, they are the proof points to your commitment. When it comes to deciding what metrics to measure or to set, think about what makes you you as an impact business, what are the things that you're really proud of that you want to be able to share progress on, what's important for your audience, and what do you want to be held accountable for.
So, when it comes to some of these impact measurement frameworks, especially B Corp certification, at Decade we do have expertise in supporting companies through measuring their impacts of their business through B Corp, the UNSDGs, JUST Label, Living Wage Certified, and a few of these other ones on the screen there as well.
So, we're always around to talk through impact reporting and support businesses as well, and hopefully we can answer some of your questions in the chat.
Q&A period as well. So lastly, I'll just repeat that quote from Joseph Campbell again that “people forget facts, but they remember stories.”
Impact reporting is real talk and sharing your impact story whether that's celebrating wins, setbacks, progress that you've made no matter how large or how small is really, really important.
We encourage all of you to identify your alignment with a trusted impact framework like the B Corp certification, the UN SDGs, etc., start kind of deciding what are those meaningful metrics that we want to share publicly, and just embrace the mindset around the fact that clarity is kindness - transparency and honesty with all of those who your business impacts really builds trust.
So that's what we want to leave you with today! I'm going to stop sharing my screen and Michelle and Kristy, think I've been monitoring the chat through the session, so maybe I'll pass it off to one of you if you want to open up for questions.
We're always happy to chat with you about what impact looks like in your business, how to really do that measurement piece and build the systems to create more impact in your business. Thank you so much and have a wonderful day.
