The Indian regulatory landscape on greenwashing has taken a significant step forward with the Central Consumer Protection Authority (CCPA) issuing guidelines entitled Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024. Ashutosh Senger, an environmental policy researcher who is now an independent advocate, shares his expert opinion on the new guidelines.
Q1. What are the challenges in holding companies accountable on greenwashing under Indian consumer protection and environmental laws?
Prior to these guidelines making headway, the primary challenge was the lack of a specific legal definition of greenwashing in India, thereby hindering prosecution.
Despite these guidelines defining greenwashing, which indicates a company intentionally misleading consumers, rather than simply making an inaccurate claim, the burden of proof will remain a challenge.
The burden of proof in this case largely rests on the prosecution. Further obstacles include resource constraints for investigations and limited consumer awareness.
Q2. How can Indian regulators ensure that environmental certifications are credible and not used as tools for greenwashing in sectors like textiles, agriculture and energy?
To strengthen the credibility of certification, the government may consider undertaking the following initiatives:
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- Development of standardised criteria for various environmental certifications specific to each sector;
- Establishment of a robust accreditation system to evaluate the competence and impartiality of certification bodies; and
- Introduction and enforcement of stricter penalties for companies using fraudulent or misleading certifications.
Q3. How do the revised CCPA guidelines strengthen measures against unfair trade practices, particularly in misleading advertisements?
The guidelines directly strengthen measures against unfair trade practices in misleading advertisements, especially regarding environmental claims, by explicitly defining greenwashing, thereby, providing a clear legal benchmark for what constitutes greenwashing.
The key aspects of compliance under these guidelines include the following.
Clarity and substantiation. Generic terms such as carbon neutral, eco-friendly, etc., shall not be used in advertisements making environmental claims without adequate, accurate and accessible qualifiers, and substantiation and adequate disclosure. Further, all environmental claims shall be supported by accessible verifiable evidence based on independent studies or third-party certifications.
Accessibility. Advertisements making environmental claims that use technical terms such as environmental impact assessment, etc., are further mandated to use consumer-friendly language and explain the meaning or implications of those technical terms.
Relevance. While making disclosures in relation to environmental claims, data from research shall not be selected to highlight only favourable observations while obscuring others that are unfavourable.
Reliability and transparency. Specific environmental claims such as compostable, degradable, etc., must be supported by disclosure about credible certification, reliable scientific evidence, internal verifiable evidence, certificates from statutory or independent third-party verification.
Comparability. Comparative environmental claims that compare one product or service to another must be based on verifiable and relevant data.
Q4. How can businesses better align with the updated CCPA guidelines, and how can they ensure compliance?
To prepare for this new era of transparency and accountability, businesses should do the following.
Apply the guidelines. Build a framework for implementing theguidelines and thoroughly examine all marketing materials, verifying the substantiation for each environmental claim. Further, gather verifiable data and documentation to support claims and consider third-party certifications where appropriate.
Examine the product life cycle. Consider the whole life cycle and examine the sustainability impacts of a product at every stage from resource extraction to disposal. Businesses will avoid burden shifting from one stage to another and provide sustainability information to the consumer.
Consider long-term impacts. Encourage customers to adopt more sustainable consumption habits by going beyond simply providing information to consumers.
Embrace collaboration. Consider engaging in multi-stakeholder consultations to develop sustainability information. Consumers should be invited to participate and encouraged to feel as though they are part of a collaborative endeavour.
Stay informed. Consistently monitor regulatory developments and adapt strategies accordingly.
