The Central Consumer Protection Authority has issued the Guidelines for Prevention and Regulation of Greenwashing and Misleading Environmental Claims, 2024 (‘Guidelines’) in furtherance to the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 issued under the Consumer Protection Act, 2019. The Guidelines have come amid the growing concerns over misleading advertisements for green and environment friendly products.

“Greenwashing” is a term modelled on the word ‘whitewashing’. It refers to the marketing strategy whereby companies make false and deceptive claims regarding the environmental benefits of their products or services, often using vague or unsubstantiated terms such as “natural,” “eco-friendly,” or “green.” As a result, companies create an illusion of environmental sensitivity and mislead well-intentioned consumers. The guidelines aim to combat this issue by bringing transparency in advertisement practices and protecting the interests of growing number of eco-conscious consumers.

KEY FEATURES OF THE GUIDELINES

Definitions: The terms ‘environmental claims’ and ‘greenwashing’ have been clearly defined to prevent any ambiguity.

Environmental claims mean any representation in any form regarding any goods (including the manufacturing process, packaging, the manner of use or disposal) or service suggesting environmentally friendly attributes aimed to convey a sense of environmental responsibility or “eco-friendliness”.

Greenwashing has been defined to include any deceptive practice including concealing, omitting or hiding relevant information by exaggerating or making vague, false or unsubstantiated environmental claims. It would also include the use of misleading words, symbols, or imagery to emphasize its positive environmental aspects while downplaying its harmful attributes.

The use of obvious hyperbole, use of generic pictures or color schemes not amounting to any deceptive or misleading practice or a company mission statement that is not specific to any product or service would not come within the definition of greenwashing.

Aspirational or futuristic claims may be made only when clear and actionable plans have been developed detailing how those objectives would be achieved.

Applicability: The guidelines are applicable to all “environmental claims” (i.e., claims suggesting environmentally friendly attributes), and all manufacturers, service providers and traders whose goods or services are the subject of the advertisement, as well as the advertisement agencies whose services are engaged for such advertising.

Prohibition against greenwashing & substantiation of environmental claims:

(a) The Guidelines prohibit any person from engaging in greenwashing or making misleading environmental claims.

(b) Any environmental claim which uses generic terms such as “eco-friendly,” “green” and “sustainable” is prohibited unless supported by proper substantiation and adequate, accurate and accessible qualifiers.

(c) Environmental claims can be substantiated through statutory certifications, independent studies, or third-party certifications.

(d) Technical terms shall be explained in a consumer-friendly language.

 Disclosure of material information:

(a) Advertisements must disclose all material information regarding the environmental claims, which should be backed by reliable and verifiable scientific evidence.

(b) Any environmental claim must be accompanied by adequate disclosure of all material information either by inserting a QR code or a URL to such information, in the advertisement or communication.

(c) Disclosures cannot be selective to highlight only favorable observations while obscuring others that are unfavorable.

(d) Specific environmental claims such as “compostable”, “free-of”, “100% natural”, “recyclable” etc. must be supported by credible certification either from a statutory or independent third-party verification that is made part of the disclosure.

(e) A guidance note is provided as Annexure -1 to the Guidelines, which provides various aspects to keep in mind regarding while making environmental claims such as being truthful, clear, relevant, making fair and meaningful comparisons, not making claims of endorsement by experts or environmental organizations that are non-existent or misleading etc.

The Guidelines have laid down the foundation for a transparent and accountable advertisement ecosystem, ensuring that companies can no longer make vague and misleading environmental claims. It will enable easy access to verifiable information, thereby fostering an environment of consumer trust and sustainable business practices. Ultimately, these measures will pave the way for a more responsible marketplace, where environment integrity is prioritized, and greenwashing is effectively curbed.

Authors: Arunav Guha Roy – Partner and Priyanshu Jain  – Associate

Disclaimer: This alert only highlights key issues and is not intended to be comprehensive. The contents of this alert do not constitute any opinion or determination on, or certification in respect of, the application of Indian law by Talwar Thakore & Associates (“TT&A”). No part of this alert should be considered an advertisement or solicitation of TT&A’s professional service