By : Arpita Sondhi

Abstract 

With sustainability slowly becoming a key factor influencing consumer choices, greenwashing has become a tactic for companies and businesses to boost their image. In order to curb this, the Central Consumer Protection Authority of India issued the Guidelines on Prevention and Misleading Environmental Claims mandating transparency, substantiation, and accountability from the companies. By setting stricter regulations dealing solely with the issue of greenwashing, there is a genuine attempt to protect consumers from being exploited and promote corporate responsibility in the sphere of environmental sustainability efforts. This article aims to take a deep dive into the provisions of these guidelines while also exploring their possible implications for businesses and consumers alike. 

Introduction

Recently, we have seen a trend where words such as “sustainability” and “eco-friendly” have evolved from mere buzzwords, to become powerful drivers in consumer behavior and purchasing patterns. Businesses face mounting pressure to prove their environmental credibility and commitment to sustainability practices, and consumers have begun to base their purchasing decisions on the perceived ecological and sustainable qualities and impacts of products and services. To keep up with this trend, companies have turned to green labels, sustainability claims, and environmental benefits through their marketing campaigns to showcase to the world their environment-friendly credentials. But how many of these claims and advertisements are true? This surge of advertisements aimed at demonstrating an ecologically friendly personality of the companies has given rise to the concept of “Greenwashing”- any deceptive or misleading practice or unsubstantiated environmental claims that highlight positive environmental aspects while minimizing or hiding the harmful environmental impacts. Greenwashing is, in fact, done to create an ecologically friendly persona of the company.  

A brief overview of the Guidelines 

Issued on  15th October 2024 by the Central Consumer Protection Authority of India (CCPA), the Guidelines on Prevention and Misleading Environmental Claims 2024 comprise ten clauses that provide key definitions of key terms, application, and scope of the guidelines, along with new regulations that must be adhered to by companies. These guidelines apply to all environmental claims made by manufacturers, service providers, and endorsers whose product/service is the subject of an advertisement, ensuring that sustainability and environment-based assertions are substantiated by evidence. 

In response to this growing problem, the Central Consumer Protection Authority of India (CCPA) has issued “Guidelines on Prevention and Misleading Environmental Claims 2024” i.e. a set of specialised guidelines that are focused on curbing rampant greenwashing. This set of guidelines and regulations seeks to foster and promote truthful market practices where environmental claims are verifiable and meaningful, while also enhancing consumer trust and corporate transparency. 

Understanding Greenwashing 

Green marketing, a practice that once started as a way to gain an edge over competitors in the market, is gradually being misused to create a misleading and false eco-friendly brand image in the eyes of consumers. By creating this false image, businesses ultimately exploit consumers who are influenced by the growing need for environmental responsibility and sensitivity. This is known as greenwashing. For example, in recent years there has been a surge in the marketing of ‘Green Firecrackers’ as an alternative to the traditional firecrackers that emit a large amount of toxic pollutants. However, there are often instances where companies make unsubstantiated and frivolous claims of reduced emissions, and low noise pollution, to promote these products. Experts argue that despite these claims, green firecrackers still release pollutants and contribute to air pollution. Critics further argue that labelling these products as ‘green’ misleads consumers into buying them, making this a clear example of greenwashing. 

The guidelines recognize that greenwashing takes its form in numerous ways. In its broad definition under clause 2(f), it encompasses a wide array of deceptive practices including any deceptive/misleading practice such as omitting or hiding relevant information, exaggerating, making false or unsubstantiated environmental claims, along with using words, symbols, or imagery. At the core, it includes practices that place strategic emphases on positive environmental aspects of a certain product/service while downplaying or concealing harmful attributes. However, the use of obvious puffery, hyperboles, or generic color schemes are not included within its ambit. 

“Environmental Claim”: Scope and Restrictions 

To determine the scope of these guidelines, it is essential to first establish a basic understanding and understand what constitutes an “environmental claim”. The entire framework applies to statements, representations, or implications that fall under the definition of an environmental claim. 

One of the key features of these guidelines is its comprehensive definition of an environmental claim (clause 2(e)), covering a representation of the basic characteristics of a product, including its manufacturing process, packaging, usage, and disposal, along with any service or process involved in providing the service that claims to have a positive or reduced negative environmental impact, and project an image of environmental responsibility or eco-friendliness. 

This broad definition ensures that both the consumers and the companies have a shared understanding regarding what forms of marketing constitute greenwashing, thereby effectively limiting the claims companies can make regarding their environmental footprint. 

Clause 5 of the guidelines establishes a crucial requirement, necessitating all environmental claims to be substantiated. In simpler terms, this essentially means that companies making any claims must provide adequate, accurate, and accessible qualifiers to ensure and prove that their statements are not misleading. It lists down a set of generic terminologies that are frequently used for advertising – such as ‘clean’, ‘green’, ‘cruelty-free’, ‘carbon-neutral’, and ‘organic’ amongst others – that cannot be used without sufficient supporting evidence. To avoid deceptive practices and the use of false and frivolous data, all environmental claims need to be supported by accessible, verifiable evidence that is either based on independent studies or third-party certifications.  For claims involving complex technical terms such as Environmental Impact Assessment, Greenhouse Gas Emissions, Ecological Footprint, etc., companies are obligated to use simple language and explain the meaning of the terms in a way that the everyday consumer can understand and gauge the environmental impact. 

Under Clause 6, businesses making any environmental claims are mandated to disclose all material information regarding the same in the advertisement itself through technological mediums such as QR Codes, etc. These disclosures must be easily accessible to the consumer and shouldn’t contradict the relevant environmental claims. These disclosures must specify whether the good is being referred to as a whole or in part, as well as the manufacturing process, packaging, etc. 

Environmental claims that are aspirational and set in the future can be made only when there are actionable plans set in place detailing how these objectives are to be met. 

Practical Implications for Businesses 

For businesses operating in India, these guidelines require significant adjustments in the way they approach advertising, production, and product development. Moving forward, companies will not be able to use vague or unsubstantiated environmental claims as marketing tactics, instead, they will have to disclose verifiable evidence substantiating these claims.

At a glance, it may appear that these guidelines have restricted the ability of companies and businesses to market and promote their product. The Government has clarified that the aim is not to hinder the businesses, producers, and service providers, instead, the guidelines simply seek to ensure environmental claims are made in a transparent manner with integrity.  Consumers must now make informed decisions and evaluate the true environmental cost of their choices. With more transparency, consumer trust and consumer position in the market will likely be strengthened. 

Challenges

Anindita Mehta (Chief operating officer at the Consumer Education and Research Centre) highlights two shortcomings in these guidelines, i.e., lack of sector-specific guidelines and pre-vetting claims. She calls for introducing sector-specific (food, electrical, clothing, etc.) guidelines that deal with matters of greenwashing. Different sectors have different ways of product designing, manufacturing, packaging, marketing, etc., and a more detailed set of guidelines leaves less room for non-compliance and ambiguity. She also suggests recognizing global standards and certifications. Lastly, Mehta also goes on to suggest adopting the practice of pre-vetting claims, i.e. a thorough review before market entry to avoid greenwashing and accountability. 

Conclusion 

While implementation of these rules across various sectors and industries will pose challenges, there is no denying that the Guidelines on Prevention and Misleading Environmental Claims, 2024, represent a significant step towards corporate environmental accountability and sustainability. These guidelines aim to not only empower consumers but also encourage businesses to adopt genuine sustainability practices. However, its effectiveness is heavily dependent on strict enforcement of the guidelines and increasing consumer awareness for the same. If implemented effectively, it has the potential to not just curb greenwashing but also promote a healthy marketplace in India. 

Authors Bio 

Arpita Sondhi is a second-year law student at Jindal Global Law School, with a keen interest in corporate law and corporate social responsibility. 

Image Source : https://www.un.org/en/climatechange/science/climate-issues/greenwashing