Beware of greenwashing trucking operations

Many customers are asking trucking companies about plans to make operations greener, and in some cases even introducing contractual mandates to achieve environmentally friendly objectives within a certain amount of time.

As the financial incentive for companies to become more environmentally friendly rises, so does the risk of “greenwashing”. But there is a risk to using claims, adjectives, colors and symbols to make exaggerated, unsupported or false statements about environmental benefits.

It’s why trucking companies should understand the potential legal risks around making such claims.

Canada’s Competition Act, enforced by the Competition Bureau, is the primary legislation that regulates and prohibits false or misleading representations to the public. Claims regarding the environmentally beneficial qualities or characteristics of a product or a service fall under this protection and enforcement scheme.  

Canadian rules about greenwashing

Generally, claims must be true, based on adequate and proper testing, and not be materially misleading. When assessing whether a claim or representation is false or misleading, the bureau will look at the literal meaning of the representation made to the public, but also the general impression that is understood from a consumer’s perspective.

There is currently no separate test that would apply in a business-to-business service model. As a result, it is in the best interest of trucking companies to ensure their claims meet these standards.

In the past, the bureau had a set of guidelines that provided detailed information on how to make environmental claims without contradicting the Competition Act. These guidelines have been replaced by a more general set of material on “Environmental claims and greenwashing”, generally mirroring the default standard for claims. However, even with this change, the bureau is still actively interested in investigating concerns relating to greenwashing.

‘Eco-friendly transportation’

Claims such as “eco-friendly transportation” and “net-zero emissions” should be used with caution and expressed in very clear terms as to what these statements actually mean. These kinds of claims must also be substantiated and tested before being made.

Even aspirational claims such as promises to be an “all-electric fleet by 2040” should be made with caution. The business should, at a minimum, have a plan with actionable steps as to how this will be accomplished. The business should also ensure that it is meeting any milestones from a timing perspective to ensure such claims are accurate.

In general, broad, unsubstantiated claims should be avoided because they leave a much stronger chance of inadvertently engaging in greenwashing.

Trucking companies should also be aware of claims by suppliers, too. For instance, if a company were to say it offered “zero-emission vehicles”, this may be considered misleading unless all elements of the upstream vehicle production don’t produce emissions.

It is important to know where the products are coming from before making claims that relate to them, just like customers down the supply chain will want to know more about a transportation supplier’s operations and upstream production before making their own claims.

Any misleading claims made to the public may ultimately become engrained in contracts with customers. This could be in the form of representations or covenants that require a carrier to meet future obligations, such as being an all-electric fleet by 2040, or maintaining “net-zero emissions” throughout a contract’s duration.

Ultimately, trucking companies should be careful about what they are claiming from an environmental perspective, and what they are agreeing to in their contracts.

• A special thank you to Sandra Wright, articling student at Miller Thomson LLP who co-wrote this article.