NEW DELHI: New guidelines for the prevention and regulation of ‘greenwashing’ promise to protect the interests of consuers and promote sustainable business practices.
Consumers have long been misled by many exaggerated or false or deceptive claims through advertisements, especially related to environmental and health benefits, which the new guidelines seek to regulate and prevent by demanding the disclosure of reliable scientific evidence and accurate qualifiers to establish the claims.
Greenwashing is a term that plays on the word ‘whitewashing’ and refers to a marketing tactic where companies tend to inflate the environmental benefits of their products or services, often using vague or unsubstantiated or generic terms such as natural, organic, pure, eco-friendly, clean, green, eco-consciousness, good for the planet, minimal impact, cruelty free, carbon-neutral, sustainable, regenerative and other such claims.
Nidhi Khare, Secretary, Department of Consumer Affairs, and Chief Commissioner of the Central Consumer Protection Authority said these guidelines will enhance consumer trust and encourage sustainable business practices. It was prepared after consultation with consumer rights activists, academia, industry representatives and practitioners.
However, the government clarified that these guidelines are not designed to stifle companies, manufacturers and service providers but to ensure that such claims are transparent and made with integrity.
What’s new
The latest Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims 2024 replaces the Guidelines for Prevention of Misleading Advertisement Endorsements for Misleading Advertisements 2022. They will apply on all environmental claims made by a manufacturer, service provider or trader whose goods, products or services are the subject of an advertisement.
Substantiation of environmental claims
The new guidelines prohibit the use of generic terms without accurate and accessible qualifiers, substantiation and adequate disclosures. They prohibit using technical terms like Environmental Impact Assessment (EIA), Greenhouse Gas Emission and Ecological Footprint, and encourage consumer-friendly language to explain the meaning or implication of technical terms.
Moreover, all environmental claims shall be supported by easily accessible and verifiable evidence based on independent studies or third-party certification. Finally, it will also regulate aspirational or futuristic claims or any comparative environmental claims.
Kinds of disclosures
The guidelines make it mandatory to disclose all material information in the relevant advertisement either by inserting a QR code or URL or any such technology or digital medium.
It also underlines that disclosures shall not mean selective data from any research by highlighting only favourable observations while obscuring others that are not so. More importantly, the disclosures shall specify whether they refer to the goods as a whole or a part of it. For instance, whether the environmental claims relate to the manufacturing process or packaging or disposal,
The shortcomings
The new guidelines have several robust provisions to curb greenwashing. It has a clear definition, brings transparency, prohibiting misleading terms, third-party certification and strong provision of adequate disclosures related to claims. However, it has some shortfalls like the lack of sector specific guidelines and pre-vetting of claims.
“There should be sector-specific guidelines to address greenwashing, as well as globally recognised standards and certifications,” said Anindita Mehta, Chief Operating Officer at the Consumer Education and Research Centre (CERC) and also Board Trustee, Consumer International, UK.
Mehta explains that companies can use different sustainability standards and messaging in different regions, which can contribute to greenwashing. “For example, the Securities and Exchange Board of India released guidelines for issuers of green debt securities in 2023. There can similarly be sector-specific guidelines in the food sector, building, electrical products, personal care products etc.,” said Mehta.
Going forward, the government should also look into adoption of the concept of prevetting of any advertisement. “Pre-vetting concept has yet to be discussed in India, which is quite prevalent in Western countries,” said Anusha Iyer of Grahak Sathi, an advocacy wing of CERC.
“By ensuring thorough review before market entry, pre-vetting protects consumers, fosters transparency and holds business accountable, ultimately promoting trust and fair competition in the market.”