Bill C-59’s anti-greenwashing provisions are expected to pass in early 2026. Canada’s sustainable investment taxonomy guidelines aren’t expected until the end of 2026. That timing gap creates a real governance challenge for directors.

When the law takes effect, companies will face a new substantiation standard for environmental claims. The original Bill C-59 language required an “internationally recognized methodology.” That’s been removed and replaced with a general requirement that claims be “adequately and properly substantiated.”

KPMG describes this threshold as “surprisingly high,” requiring objective, measurable, replicable, independently verifiable evidence directly linked to the claim. Many organizations are unprepared to meet this standard.

Here’s what this means for directors:
The removal of “internationally recognized methodology” was intended to create flexibility, but it has instead created more legal risk and uncertainty.

Environmental claims that once seemed reasonable may now subject companies to regulatory scrutiny and legal challenges.

Directors have a fiduciary duty to oversee risk. Climate-related legal risk has increased considerably.

Boards without climate-literate directors are now operating with a governance gap at the precise moment when expertise is most needed.

I’ve long believed in the Power of Three: one woman in the boardroom is a token, two is a presence, and three is a voice. I see the same dynamic with climate competency on boards. One director with ESG expertise is a start. But this regulatory environment requires a critical mass of directors who understand climate risk, disclosure frameworks, and the evidentiary standards that will be applied to environmental claims.

Credentials such as the GCB.D and CCB.D from Competent Boards reflects the kind of directorial competency that boards need right now. For nominating committees recruiting in 2025 and 2026, climate literacy should be a core competency in the director search brief.

The guidance is coming, but the legal obligation will arrive first.

Read the full KPMG analysis here:
Changes to Canada’s anti-greenwashing law will increase risk for companies