In an age where climate change, biodiversity loss, and environmental degradation are becoming increasingly critical, both consumers and companies are more aware than ever of the need for sustainable practices. Terms like “eco-friendly,” “natural,” and “sustainable” are frequently used to attract consumers looking to make environmentally responsible choices. However, the rise in false or misleading claims about the environmental benefits of products has made it difficult for people to trust these labels. In response to this, recently, the Central Consumer Protection Authority (CCPA) has issued “Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024”
Greenwashing
The term “greenwashing” is a play on the term ‘whitewashing’. It refers to the marketing tactic where companies falsely claim or exaggerate the environmental benefits of their products or services. They often use vague or unsubstantiated terms such as “natural,” “eco-friendly,” or “green” in order to lure environmentally friendly consumers. Hence, they are basically the deceptive and misleading advertisement tactics by the companies.
Nowadays, as environmental sensitivity is growing, consumers are becoming aware of the environmental footprints of the products and services that they use. They are gradually shifting their preferences towards the environment and health-friendly products. As per the report published in Times of India 2022, New Bain & Company research finds that 52% of Indians are willing to spend a premium on sustainable products. To tap this growth potential, companies are falsifying, exaggerating, and making bogus and dubious claims about their products being environment friendly.
Market growth for sustainable products in India is often impaired by the quality of information available to consumers to guide their choices; this information can be imprecise, unclear, noncomparable, unsubstantiated, misleading, or irrelevant. Greenwashing and misinformation on product sustainability undermine the transition to greater sustainability.
Volkswagen: In 2015, Volkswagen advertised the environmentally friendly and low-emission attributes of its vehicles in marketing campaigns. However, upon investigation, Volkswagen acknowledged installing ‘defeat devices’ in numerous vehicles. Subsequently, the Federal Trade Commission (FTC) found that diesel car engines were emitting nitrogen oxide pollutants at levels up to 40 times higher than the US regulatory limit.
McDonald’s: In 2019, the fast-food chain launched an initiative aimed at reducing the utilization of single-use plastics within its restaurants. However, the company’s newly introduced paper straws were determined to be non-recyclable. Additionally, concerns have been raised regarding the environmental impact of the company’s beef laden menu, which is purported to generate over 22 million metric tons of greenhouse gases annually.
CCPA Greenwashing Guidelines:
First, the guidelines provide for clear definitions of terms related to greenwashing. This will ensure that both businesses and consumers have a common understanding about the related issue. Second, manufacturers and service providers are required to substantiate their environmental claims with credible evidence providing details about the methodology and data used to support such claims. QR codes or URLs can be inserted in the advertisements, which will be linked to disclose the relevant material information. Third, the use of vague or misleading terms such as “eco-friendly,” “green,” and “sustainable” without proper substantiation is prohibited. Fourth,Third-Party certifications are allowed to be accepted in substantiation of the environmental claims. This gives companies the opportunity to operate within a standard framework. Fifth, these guidelines are applicable to all advertisements, regardless of form, format, or medium, including companies, advertisers, endorsers, and service providers. Sixth, in case of any ambiguity or dispute in interpretation of these guidelines, the decision of the Central Authority shall be final.
Present Status
Presently, in India, certification is a voluntary activity. The Ministry of Environment, Forests, and Climate Change has notified the Ecomark Certification Rules, a voluntary scheme that encourages manufacturers to transition to environmentally friendly products. The Central Pollution Control Board (CPCB) administers the scheme and verifies products that meet criteria set by the Bureau of Indian Standards.
Similarly, The Confederation of Indian Industries (CII) has its own voluntary scheme, called GreenPro, which adheres to benchmarks set by the International Organisation for Standardisation (ISO) for environmental labels and declarations. More than 9500 products in the Indian market have been awarded the GreenPro label.
The Advertising Standards Council of India had also released its own set of greenwashing guidelines earlier this year to dissuade the practice among advertisers. In the past, certain greenwashing activities have attracted penalties also.
“ASCI pulled up multinational conglomerate Godrej for claiming its soap was “100% natural” and eco-friendly when it was not.”
Further, the Securities and Exchange Board of India (SEBI) has made it mandatory for the top 1000 companies by market capitalisation to report on their investments and policies in Environmental, Social, and Governance (ESG) areas, in the interest of transparency. It includes disclosures on carbon emissions too.
Rights and penalties
According to Section 24 of the Consumer Protection Act, the CPCA can impose penalties for misleading corporate claims, with fines of up to ₹50,000, which may escalate to ₹1 crore for repeated violations. As per Section 21 of the Act, first-time offenders may face fines of up to ₹10 lakh, while repeat offenders can be fined up to ₹50 lakh with possible imprisonment of up to two years. Additionally, Section 40 protects the rights of consumers, allowing them to seek compensation for any damages or losses incurred due to violations.
Hindustan Unilever Limited (HUL): advertised its product ‘Surf Excel Easy Wash’ detergent as “100% natural” and “environment friendly,” despite containing synthetic ingredients. In 2011, Ministry of Environment and Forests, filed a case against HUL for making false claims in its advertising. Consequently, HUL was fined INR 10 lakhs by the Central Pollution Control Board.
Bharat Petroleum: In 2017, the ASCI issued a ban on Bharat Petroleum’s advertisement that claimed “Go Green With Speed For IT Reduces Emissions” due to unsubstantiated environmental assertions.
What next?
Current consumption and production patterns are a major risk factor for irreversible global crises related to climate change, biodiversity loss and all forms of pollution. All societies must move towards more responsible consumption and production patterns, as reflected in Sustainable Development Goal (SDG) 12 of the United Nations 2030 Agenda for Sustainable Development.
In this regard, India can make pre-approvals for green claims mandatory on the lines of the European Union. In the E.U., companies need to submit evidence and get preapproval from verifiers assigned by EU countries before using any claims for their products. Further, India should introduce minimum standards in product development to make nearly all products on its market sustainable, durable, and eco-friendly. Also, India can guarantee the right of consumers to have products repaired and promote repairing over throwing away and buying new products. Last but not the least, green literacy in India is still evolving. A lot of consumers are still not aware of the good and bad advertisement practices in general; leave aside the environmental claims. That is the reason that explains why India has not seen a large number of customer complaints in this regard. Hence, India must promote green literacy starting right from the school levels. Civil societies must be roped in to bring this behavioural change.
Conclusion
As India takes this crucial step to combat greenwashing, it sends a strong message about its dedication to a more sustainable future. In alignment with the United Nations’ goals, India’s proactive stance underscores the importance of responsible production and consumption, promoting a cultural shift towards sustainable living. By nurturing a truly eco-conscious society, India can contribute significantly to global environmental resilience, inspiring other nations to follow suit in building a healthier, more sustainable planet for generations to come.
