India Drafts Guidelines Against Greenwashing

The Central Consumer Protection Authority of India released the draft “Guidelines for Protection of Consumers against Greenwashing” on February 20, 2024, in accordance with the Consumer Protection Act of 2019, and it is open for public feedback for 30 days from that date onwards. The term “greenwashing” describes the deceptive or fraudulent promotion of environmental benefits associated with specific products or services; restrictions against this type of advertising were included in the draft standards. The scope of application encompasses all forms, formats, and media of advertisements as well as service providers, product sellers, advertisers, advertising agencies, and similar entities.

Definition of “Greenwashing”

• Any deceptive or misleading practice, which includes concealing, omitting, or hiding relevant information, by exaggerating, making vague, false, or unsubstantiated environmental claims
• Use of misleading words, symbols, or imagery, placing emphasis on positive environmental aspects while downplaying or concealing harmful attributes.
  *provided that use of obvious hyperboles, puffery, or the use of generic colour schemes or pictures; either not amounting to any deceptive or misleading practice are not included.

Definition of “Environmental claims”

Any representation, in any form, regarding:

• A good (either in its entirety or as a component), the manufacturing process, packaging, the manner of use of the good, or its disposal
• A service (or any portion thereof) or the process involved in providing the service, suggesting environmentally friendly attributes

The concept of ‘Greenwashing’ in context of environmental claims

The Guidelines define what is ‘greenwashing’ in context of environmental claims. To make an environmental claim means to make a representation of goods or services suggesting their environmental friendly attributes. For example, when a business advertises that use of its home cleaning liquid spray results in “eco-friendly home cleaning”, it is making an environmental claim for the purposes of the Guidelines.

So, in the example of home cleaning liquid spray, if the claim of “eco-friendly home cleaning” cannot be substantiated by the business, it would amount to greenwashing by the business. 

To take another example, if a business claims that its product is made out of a certain percentage of recycled material, it is making an environmental claim, and if it cannot be substantiated by empirical data, it will amount to greenwashing for the purposes of the Guidelines

It is also essential to note that the Guidelines borrow the definition of ‘advertisement’ from the Misleading Ad Guideline, which means a statement made on the package label or wrapper of the product is covered by the scope of the Guidelines. Therefore, even a product label that makes environmental claims such as ‘sustainably procured’, ‘cruelty free’, etc., will be tested by the greenwashing parameters set out in the Guidelines.

Environmental claims mentioned above may include, but not limited to:

• Having a neutral or positive impact on the environment or contributing to sustainability
• Causing less harm to the environment compared to a previous version of the same product or service
• Causing less harm to the environment than competing goods or services
• Being more beneficial to the environment or possessing specific environmental advantages 

However, any advertisements that are not specific to any product or service will not be applicable to the guidelines. To illustrate, a company in its mission statement makes a statement that “its growth will be based on sustainability principles”. For the purpose of these guidelines this will not be treated as an environmental claim. However, if the company further makes a statement that “All its products are manufactured in a sustainable manner”, then such an environmental claim will be examined for greenwashing.

Substantiation of environmental claims

All advertisement making environmental claims shall comply with following obligations:

• Generic terms such as’ clean’, ‘green’, ‘eco-friendly’, ‘eco-consciousness’, ‘good for the planet’, ‘minimal impact’, ‘cruelty-free’, ‘carbon – neutral’ and similar assertions shall not be used without adequate qualifiers and disclosures.
• While using technical terms like Environmental Impact Assessment (EIA), Greenhouse Gas Emissions, Ecological Footprint, one shall use consumer friendly language and explain its meaning or implications.
• All environmental claims shall be backed by verifiable evidence.

When claiming an environmental benefit, bear the following in mind as well.

• Truthfulness and accuracy
  e.g. “Our packaging is made from 100% recycled materials.”
  Problem: Without verifiable evidence or certification, this claim might be misleading.
• Clarity and unambiguity
  e.g. “Harnessing the power of sustainable technology!”
  Problem: Specific details about how the technology is sustainable should be disclosed.

Fair and meaningful comparisons
e.g. “Our energy-efficient light bulbs outperform all others!”

• Problem: Claim lacks context and does not specify which bulbs are being compared. For fair and meaningful comparisons, the company should compare its bulbs to others with similar characteristics and intended uses.
• Claims should be absolute and relevant
  e.g. A packaged product is labelled with an unqualified claim, “recyclable”
  Problem: It is unclear from the type of product and other context whether the claim refers to the product or its package.
• Use of imagery without substantive changes
  e.g. A detergent advertisement showcases a family happily playing in an open grass ground, with the tagline, “Gentle on Clothes, Gentle on Nature”
  Problem: Without directly stating environmental friendliness, the imagery implies a connection between the product and a more eco-conscious lifestyle.
• Endorsement by environmental organizations or experts or other endorsers
  e.g. “Recommended by leading environmental experts!”
  Problem: This claim implies an endorsement by environmental organizations. This may constitute a violation if there is no backing as specified above.

Many more provisions of adequate disclosures are proposed. 

• All environmental claims shall be accurate and disclose all material information either in the relevant advertisement or communication or by inserting a QR Code, URL (or any such technology or digital medium), which will be linked to relevant information.
• While making disclosures in relation to environmental claims, data from research shall not be cherry picked to highlight only favorable observations while obscuring others that are unfavorable.
• Aspirational or futuristic environmental claims may be made only when clear and actionable plans have been developed detailing how those objectives will be achieved.

How can businesses comply with the Greenwashing guidelines?

• Make disclosures in support of environmental claims
• Ensure claims are verified by an independent and recognized third party
• Use easy to understand language for environmental claims
• Avoid cherry picking helpful data

What are the penalties if a business is found guilty of Greenwashing in India?

If any advertisement or statement containing environmental claims is found to be unsubstantiated, non-verifiable or otherwise contrary to the provisions of the Guidelines, it may attract imprisonment for a term extending to two (02) years and fine extending to ten lakh Rupees (INR 10,00,000). For every subsequent offence, the punishment may extend to imprisonment for up to five (05) years and a fine of up to fifty lakh Rupees (INR 50,00,000).

Are any environmental claims excluded from the scope of Greenwashing guidelines?

The Guidelines do not apply to obvious hyperbole, puffery and claims that are not specific to any product or service. For example, any statement by a company generally referring to its environmental goals or mission without substantiating it, or to its environmental initiative or achievements without disclosing their details, would not amount to greenwashing under the Guidelines, provided such statements are not related to its products or services.

Conclusion

The Indian Government has finally taken the first decisive step to counter the menace of greenwashing. Businesses in India should be prepared to face heightened scrutiny for every term and phrase they use which attributes environmental friendly character to its products and services. It may be prudent to invest resources now to review the Guidelines closely and take steps to align product and service advertisements and label claims with the Guidelines in order to avoid any issues when Guidelines are enforced, especially on account of the steep penalties.