- The Central Consumer Protection Authority (CCPA) issued guidelines called the Prevention and Regulation of Greenwashing or Misleading Environmental Claims, to control greenwashing in consumer markets.
- Companies can take the support of existing schemes to certify their products as environmentally beneficial, experts say.
- The impetus to address greenwashing is growing as awareness about the negative impacts of climate change and environmental degradation becomes more well known.
The Central Consumer Protection Authority (CCPA) issued guidelines to prevent greenwashing in an effort to curb false claims of environmental benefits arising from products and services. The guidelines, issued on October 15, seek to foster practices where “environmental claims are both truthful and meaningful, thus enhancing consumer trust and encouraging sustainable business practices,” the CCPA said in a statement.
Greenwashing is defined in the guidelines as a deceptive or misleading practice which “includes concealing, omitting, or hiding relevant information,” by “exaggerating, making vague, false, or unsubstantiated environmental claims.” It also includes the use of misleading words, imagery, and symbols that place an “emphasis on positive environmental impacts while downplaying or concealing harmful attributes.”
The guidelines were finalised after a draft version was introduced in February. While the draft version emphasised greenwashing in advertisements, the final version more broadly addresses all environmental claims in any form.
The casual use of terms like “green,” “eco-friendly,” “good for the planet,” and “carbon neutral,” among others, used without adequate qualifiers, is prohibited under the guidelines. Companies, advertisers, endorsers, and service providers making environmental claims on their products and services have to support it with “verifiable evidence based on independent studies or third-party certifications,” say the guidelines. The guidelines do, however, accept puffery and “obvious hyperboles,” as long as they don’t deceive customers.
Experts in industry and the private sector say that while the guidelines are a welcome step, addressing greenwashing needs a stronger regulatory framework. “Manufacturing sectors are highly regulated, where the regulatory framework prescribes good and bad practices. Greenwashing will also have to evolve similarly. We haven’t yet seen a large number of customer complaints. Green literacy will play a big role in this,” said Srinath Sridharan, a policy researcher and corporate advisor.
In a press release, the government said the CCPA “seeks to work closely with industry stakeholders, consumer organisations, and regulatory bodies to ensure effective implementation and compliance with the guidelines.” However, the guidelines do not outline what may happen in case of non- compliance.
Read more: [Explainer] What is greenwashing?
Rise in green labelling standards
The greenwashing guidelines accompany other measures that seek to make environmental claims more verifiable. Allowing entities to use credible certifications and third party verification to prove their claims is a progressive development, said Rijit Sengupta, CEO of the Centre for Responsible Business, a think tank focussing on the social, environmental, and economic responsibilities of businesses. “It gives companies the opportunity to operate within a standard framework, and to look more closely into their operations including down their supply chains,” he said.
Earlier in September, the Ministry of Environment, Forests and Climate Change notified the Ecomark Certification Rules, a voluntary scheme that encourages manufacturers to transition to environmentally friendly products. Products are eligible if they reduce pollution, are recyclable, reduce the use of environmentally unfriendly materials, or reduce the use of non-renewable resources in production and use. The Central Pollution Control Board administers the scheme and verifies products that meet criteria set by the Bureau of Indian Standards.
“We’ve seen demand for such labels rise over the last 10 years or so,” said S. Karthikeyan, Deputy Executive Director at Confederation of Indian Industry (CII). The CII has its own voluntary scheme, called GreenPro, which adheres to benchmarks set by the International Organization for Standardization (ISO) for environmental labels and declarations. More than 9500 products in the Indian market have been awarded the GreenPro label, Karthikeyan said.
The CII persuades companies to obtain the GreenPro label to improve their credibility and trustworthiness among consumers and investors. But the adoption of labels is very much tethered to a demand for them, Karthikeyan said. “The GreenPro label is most popular in the consumer goods sector, but other sectors are also showing an interest,” he said.
The GreenPro follows the ISO standard for type 1 labelling, which sets standards for and assesses the environmental impact of a product’s lifecycle – from raw materials used to recycling after the end of life. Labels falling under type 2 and type 3 of the ISO standard are based on self-declarations and tend to be less credible, said Karthikeyan. “These labels will pick up in manufacturing once demand for them grows,” he said.
At the moment, certifying products is a voluntary activity. Both Karthikeyan and Sengupta agree that under the newly issued guidelines, there needs to be a framework that also addresses enforcement. “When it comes to regulations, we have seen a slow movement of voluntary actions becoming mandatory after an initial nudge by the government, like with the National Guidelines on Responsible Business Conduct. Hopefully, these guidelines will see a similar evolution,” said Sengupta.
The Advertising Standards Council Of India, an independent, ad-industry led watchdog, had also released its own set of greenwashing guidelines, earlier this year, to dissuade the practice among advertisers. “I think we may see the government leaning on the ASCI to help govern these claims. Releasing its own guidelines is a very important step, but the government will need to address how quickly it will resolve false environmental claims, and also determine who within the government is responsible for governing them,” said Sridharan.
Greening the supply chain
Greenwashing is a practice that can pervade market activity at every level – from corporations to manufacturing to point-of-sale. The impetus to address greenwashing is growing as awareness about the negative impacts of climate change and environmental degradation becomes more well known.
At the COP27 in Egypt’s Sharm el-Sheikh, an expert group assembled by United Nations Secretary General, Antonio Guterres, made a set of recommendations for non-state actors making net-zero emissions pledges, so they avoid greenwashing. The United Nations Environmental Programme also released a report in 2023 on regulatory frameworks that governments can use to combat greenwashing.
Identifying greenwashing at the end-consumer and product level has attracted penalties in the past in India, in the interest of consumer protection. For example, ASCI pulled up multinational conglomerate Godrej for claiming its soap was “100% natural” and eco-friendly when it was not. But greenwashing at the macro and corporate level is more challenging to detect. It took years before it was revealed that carbon credits sold in the global carbon market, issued by certification company Verra, were overstating their impact, for example.
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. The ESG disclosures follow the SEBI’s Business Responsibility and Sustainability Reporting (BRSR) format and include disclosures on carbon emissions.
“The ESG reporting and greenwashing guidelines complement each other because ultimately this is the direction that reporting on sustainable consumption and production needs to move in,” said Karthikeyan.
But reporting on ESG in India lacks proper definition, Sridharan pointed out. “The BRSR doesn’t have a standardised or prescribed weightage when it comes to disclosures. Without standardisation and homogenisation, it is easy to use fancy language to obscure the extent and impact of disclosures. India needs to come up with its own standards for ESG reporting,” he said.
Banner image: Activists protest against an oil company that engages in greenwashing. Image by Devon Buchanan via Flickr (CC BY-NC-SA 2.0)