C-59: Government intentions vs. market reactions

A Briefing Note released today by the Institute for Sustainable Finance analyses market responses in the aftermath of C-59 passing into law, highlights important elements of industry feedback, and assesses the Competition Bureau’s compliance guidelines which were finalized June 5, 2025.

Download the Briefing Note, “Bill C-59: Government intentions vs. market reactions,” here.

“C-59 has caused a commotion in the marketplace,” said ISF Executive Director (Academic) Thomas Walker. “The government’s attention to cracking down on deceptive practices is certainly welcome. But there’s still work to be done to ensure there isn’t a chilling effect on the kinds of sustainability reporting that investors count on to move capital to climate solutions.”

“It is important to design consumer protections in a way that makes sense with sector-specific realities, and the goals of other regulatory bodies. For example, it does not make sense to increase the legal risks associated with voluntary disclosures, while other government agencies work with the private sector towards enhancing those disclosures,” said Prateek Sood, ISF Research Associate.

Key takeaways from the Briefing Note:

• The legislation addressed growing public concern about pervasive greenwashing by companies operating in Canada and empowered Canada’s Competition Bureau to ramp up regulatory enforcement with stiff penalties, a reverse onus provision and private right of action.
• Initial reactions across sectors of the economy were mixed, with the energy sector being the most vocally opposed. As of September 2024, at least 34 companies (15%) listed on the S&P/TSX Composite Index had issued disclaimers or outright removed their environmental disclosures as a result of the amendments.
• A feedback period resulted in hundreds of submissions. Four major themes emerged: unintended consequences (mentioned in 173 responses), difficulties in compliance (mentioned in 140 responses), the need for further clarity and guidance (mentioned in 109 responses), and policy recommendations (mentioned in 88 responses).
• Participants from the financial sector consistently highlighted the importance of distinguishing between environmental claims made to market a product or service and the data that companies disclose regarding their ESG performance.

While compliance guidance provided by the Competition Bureau should go some way to allaying industry concerns, in many cases uncertainty remains. Addressing these remaining issues should be a priority for the Competition Bureau and for the federal government. It is also now particularly urgent to establish mandatory sustainability disclosure regulations for Canadian firms under standards proposed by the Canadian Sustainability Standards Board to ensure clarity for business and certainty for investors.