CHILE Trends and Developments Contributed by: Juan Pablo Halpern, Arturo Pino, Francisca Zuccone and Carolina Schiele, Clyde & Co Chile
Greenwashing bill Chile is currently debating a bill aimed at regu - lating greenwashing ( “the greenwashing bill” ). Until it is enacted, Consumer Law No. 19,046 on misleading advertising remains in force. The bill seeks, among other objectives, to define green - washing and introduce measures to penalise those who fail to comply with the regulations. Within the framework of ESG sustainability strat - egies, numerous institutions and market actors have implemented initiatives to reduce the envi - ronmental impact of business activities. These measures range from adopting cleaner produc - tion methods to promoting circular economy principles. However, alongside these genuine sustainability efforts, a paradox has emerged: greenwashing, a deceptive practice that distorts the true intent of environmental responsibility, leading to a false perception of corporate com - mitment to sustainability. Greenwashing can be defined as a commer - cial strategy in which companies falsely claim, exaggerate or create misleading impressions about the environmental benefits of their prod - ucts, services or operations. This practice often manifests in marketing campaigns, branding efforts and product labelling, where terms such as “eco-friendly,” “biodegradable,” and “100% natural” are prominently displayed without ade - quate substantiation. These practices not only mislead consumers and the market, but also slow progress toward sustainability by allowing companies to benefit reputationally without making meaningful envi - ronmental improvements. In Chile, a bill to regulate greenwashing is cur - rently being discussed. For the time being, Con -
sumer Law No. 19,046 on misleading advertising remains applicable. As for the bill, its objective is, among other aspects, to define the concept of greenwashing and establish tools to sanction those who violate the regulation. If approved, the bill will require companies to provide information in their advertising that is not only truthful and not misleading but also verifi - able, establishing the obligation to maintain per - manent and updated information on their web - sites regarding their environmental practices in the country, as well as in other countries where they operate or invest. A novelty in the regulation is linked to the burden of proof at trial, as the bill alters the traditional rule on this. Thus, instead of the burden of proof falling on the complainant, the bill establishes that companies must prove the veracity of their statements in the challenged advertisement. In terms of penalties, the bill establishes fines of up to 9,000 Unidad Tributaria Mensual or’UTM’, (approximately USD640,000) and a ban on any kind of advertising for a period of one to five years. The court may also order the offender to carry out the necessary corrective publicity to amend the errors or falsehoods in the challenged pub - lication. Additionally, the verdicts will be pub - lished in the National Environmental Information System (SINIA). Furthermore, the bill intends to sanction the media that broadcast advertising classified as greenwashing, establishing fines equivalent to twice the economic benefit gained by such pub - lication.
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