“Clean Beauty” Claims: Litigation Risks for Cosmetics Manufacturers

As the demand for "clean beauty" and sustainable personal care products continues to grow, so too does the risk of deceptive advertising and greenwashing claims. In this blog, we describe the current litigation landscape facing the industry and outline practical steps businesses can take to help reduce their exposure.

Key Takeaways

• "Clean," "natural," and environmental claims may attract increasing scrutiny from regulators and plaintiffs.
• Businesses should consider the overall impression conveyed by their marketing, not just the literal accuracy of individual statements.
• Environmental representations may require substantiation under the Competition Act.
• Product safety claims can become central issues in litigation involving allegedly harmful ingredients.
• Manufacturers should regularly audit marketing materials and maintain evidence supporting consumer-facing claims.

What Laws Create Litigation Exposure?

Litigation exposure in the cosmetics and personal care sector arises from a combination of federal and provincial laws governing advertising and consumer-facing representations.

At the federal level, the Competition Act prohibits false or misleading representations made to promote a product. Following amendments introduced under Bill C-59 in June 2024, representations concerning the environmental benefits of a product must be based on an "adequate and proper test," while representations concerning the environmental benefits of a business or business activity must be properly substantiated.  

Further amendments under Bill C-15 in March 2026 revised this framework by removing the requirement that business claims accord with an "internationally recognized methodology."

While Bill C-15 provides businesses with greater flexibility in how they substantiate environmental claims, the underlying obligation to substantiate those claims—and mitigate greenwashing risk—remains. Similar substantiation requirements also appear in the Cosmetics Regulations, which require manufacturers to possess evidence supporting certain claims made on cosmetic labels and in advertising.

Corporations that contravene the civil deceptive marketing provisions of the Competition Act may face administrative monetary penalties of up to the greater of $10 million (or $15 million for subsequent orders) and three times the value of the benefit derived from the conduct. Where that amount cannot reasonably be determined, penalties may reach 3% of annual worldwide gross revenues.

Provincial consumer protection legislation creates additional, concurrent exposure. For example, the B.C. Business Practices and Consumer Protection Act prohibits deceptive acts or practices in consumer transactions.

A representation is considered deceptive under the statute if it has the capability, tendency, or effect of deceiving or misleading a consumer. Certain provisions also create particular challenges for defendants. Section 5(2) alters the ordinary burden of proof by requiring the defendant to establish that a representation was not deceptive, while section 172(1) permits public-interest proceedings without proof of personal loss.

Similar legislation exists across Canada, although the specific requirements, remedies, and procedural rules vary from province to province.

Why Exposure is Increasing

Litigation risk is escalating due to a combination of evolving plaintiff strategies and the commercial uniformity of modern personal care marketing.

1. The "General Impression" Standard: As established by the Supreme Court of Canada, allegedly misleading representations must be assessed from the perspective of a "credulous and inexperienced" consumer. Courts consider both the literal meaning of a representation and the general impression it conveys, recognizing that consumers do not undertake a detailed analysis of advertising before forming an impression of its meaning.
   For manufacturers, this means that the risk analysis should extend beyond the accuracy of individual statements to the overall message conveyed by the marketing.
2. Product Safety Representations: Courts have shown a willingness to scrutinize representations concerning product safety. Descriptions such as "tested" and "hypoallergenic" may be alleged to convey affirmative representations regarding a product's safety and may become central issues in litigation involving allegedly harmful ingredients.

Insights from United States Litigation Trends

Recent litigation in the United States provides insight into the types of claims that may increasingly emerge in Canada.

In Finster v Sephora USA Inc, a plaintiff challenged Sephora's "Clean at Sephora" designation, alleging that products bearing the designation contained ingredients inconsistent with the plaintiff's understanding of clean cosmetics.

Similarly, in Anderson v Almay Inc, plaintiffs challenged representations that products were "clean" and formulated using "safe, effective ingredients," alleging that certain products contained PFAS chemicals.

Although these decisions arise in a different legal and regulatory environment, they illustrate a willingness by plaintiffs to challenge representations concerning ingredient composition, product marketing, and alleged greenwashing.

As demand for products marketed as clean, natural, and environmentally responsible continues to grow, manufacturers should expect continued scrutiny of similar claims.

Operational Steps to Reduce Risk

With regulatory scrutiny and class action litigation poised to increase, cosmetics manufacturers should implement several proactive operational steps to reduce their liability risk:

• Substantiate all claims: Test and verify environmental and safety statements before publishing them on packaging or social media.
• Audit existing materials: Review campaigns and online statements to ensure they remain accurate under modern regulatory rules.
• Monitor external partners: Ensure influencers and retailers use approved messaging that matches your verified data.
• Keep thorough records: Maintain organized files of all testing materials to proactively defend against regulatory inquiries and establish accuracy of statements.
• Track scientific developments: Product safety requires continuous vigilance. Watch global scientific trends to anticipate future Canadian litigation risks.

How We Can Help

Our team of litigators has a wealth of experience advising clients on minimizing the risk of, and defending, claims involving allegations of deceptive advertising and product liability.  If you would like to learn more about how we can help your business reduce litigation risk and respond to claims relating to product marketing and safety, please contact us.