Greenwashing: What Happens When Competition And Securities Laws Intersect?

Public companies have long developed best practices and legal expertise in drafting compliant securities disclosure documents. With the increase in required and voluntary disclosure by public companies regarding environmental, social and governance ("ESG") matters, disclosure has become more difficult to navigate, particularly disclosure around green claims such as carbon emissions reduction targets and net-zero commitments.

For over 14 years¹, the Canadian Securities Administrators have provided guidance on how to best disclose such information effectively while avoiding misleading investors.

The introduction of specific greenwashing provisions under the Competition Act last year, and the private rights of action thereunder which will come into force in June of this year, have increased the complexity of considerations regarding ESG disclosures.