Author: Krushna Bawa, a student at DES’S Shri Navalmal Firodia Law College, Pune.
Abstract:
Sustainability has taken center stage in shaping regulatory policies, corporate behavior, and consumption trends around the world today. With increasing consumer awareness regarding climate change and loss of biodiversity, the market preference is increasingly leaning towards eco-sustainable options. Corporations have been forced to adopt marketing strategies that portray their operations as being environmentally friendly. Regrettably, large percentages of such eco-friendly claims fail to pass the test of reality. Greenwashing, which involves the artificial exaggeration or creation of eco-friendly advantages by commercial firms, is emerging as a serious legal problem.
Greenwashing deliberately skews healthy competition and undermines environmental governance. To counter such distortions in the market place, India has further bolstered its regulatory framework with the Consumer Protection Act, 2019, and the Environment (Protection) Act, 1986. Notably, under the CCPA, the Guidelines for Prevention and Regulation of Greenwashing, 2024, have been brought into force. The specific guidelines clearly stipulate that all environmental claims must be factual, verifiable, and scientifically backed.
This paper discusses the legal definition of greenwashing, discusses the developing regulatory regime in India, discusses enforcement problems, and assesses corporate accountability processes within current consumer and environmental law.
To The Proof:
The phenomenon of green washing can be described as the misleading business activity of presenting products, services, operations as environmentally sustainable without proof. Businesses tend to use vague terminology, such as “eco-friendly,” “natural,” or “carbon neutral,” devoid of any credible facts.
The exponential rise in ESG Investments and sustainable consumption has made the value of environmental branding more significant in business. Therefore, some companies have misused terms related to sustainability to boost their reputation while conducting activities detrimental to the environment.
India resists the fraudulent business activity in the market through consumer protection laws and regulation. In India, the Consumer Protection Act, 2019 expressly prohibits unfair business practices and misleading advertisement while CCPA Greenwashing Guidelines 2024 requires that all environmental claims be factual and scientifically verifiable.
Despite these advancements in regulation, challenges continue to persist regarding enforcement when it comes to technological claims verification, digital marketing, corporate compliance, and public awareness. Eliminating greenwashing is possible through coordinated efforts from consumer protection agencies, environmental authorities, national industry bodies, and businesses dedicated to sustainability.
USE OF LEGAL JARGON:
Greenwashing:
Fraudulent marketing techniques in which companies make false environmental claims about their products, services, and corporate processes.
Misleading Advertisement:
Adverts carrying false, misleading, or confusing statements that may deceive customers about the actual environmental impact of a product.
Environmental Claim:
Any express or implied commercial claim about the sustainability, recyclability, carbon footprint, or environmental advantages of any product or service or business activity.
Unfair Trade Practice:
Any misleading commercial practice that is prohibited under the Consumer Protection Act, 2019.
ESG (Environmental, Social, Governance):
Compliance system used by regulators and investors to measure the extent to which an organization is environmentally responsible, socially influential, and internally governed.
Carbon Neutrality:
The state where there are equal amounts of greenhouse gases emitted and reduced or offset by an entity.
Sustainable Development:
Sustainable Development is the principle that Development should meet the needs the present without compromising the ability of future generations to meet their own needs.
Corporate Environmental Responsibility:
Legally and morally binding duty of corporations to ensure that there is minimal damage to the environment and the way business activities are conducted must be environmentally sustainable.
Transparency:
Legal necessity for having verifiable information when environmental claims are made.
Due Diligence:
Legal process through which corporations ascertain the validity of environmental claims before making such claims to consumers.
THE PROOF:
An Insight into Greenwashing and Market Distortion:
In the context of law, the notion of greenwashing became popular during the 1980s when businesses started using environmental themes in advertisements without making any concrete sustainability efforts. In modern times, greenwashing is an international legal issue impacting the interests of consumers, market competition, and environmental governance across borders.
Some common ways greenwashing is achieved include:
• Faking material recyclability.
• Misusing carbon neutral claims.
• Overstating sustainability claims by organizations.
• Partial disclosure of negative environmental impacts.
• Ambiguous terms such as “eco-friendly” lacking proof.
• Use of unapproved environmental icons.
This distorts consumer decisions because it manipulates them with false information and puts compliant businesses at a disadvantage.
Greenwashing as a Consumer Protection Law Matter:
Despite being a form of environmental claim, the legal duty for greenwashing rests mainly under consumer protection laws. There is an absolute legal requirement for consumers to be furnished with truthful information before making purchases.
Under the Consumer Protection Act, 2019, there is a prohibition against misleading advertising and unfair trade practice. Within this framework, both the manufacturers, corporate endorsements, and retailers can be legally responsible for misleading commercial product claims.
There is an establishment of the Central Consumer Protection Authority (CCPA), which has been assigned the power to examine fraudulent advertisements, direct executive orders, impose penalties, order withdrawal from the market and ensure market well-being.
Hence, greenwashing goes beyond being simply an environmental act, infringing on essential consumer laws.
Guidelines for Prevention and Regulation of Greenwashing, 2024 – CCPA:
In recognition of the increasing trend of greenwashing within the industry, the Central Consumer Protection Authority has come out with Guidelines for Prevention and Regulation of Greenwashing, 2024 in exercise of powers conferred under the Consumer Protection Act, 2019.
This specific regulatory measure provides India’s first ever comprehensive statute on deceptive environmentalism of corporations.
According to the Guidelines, any greenwashing claim must be:
• Truthful and verifiable on an objective basis.
• Supported by authentic scientific data.
• Specific about the premise behind the claim.
• Free from any ambiguous, exaggerated, or absolute claims regarding ecology.
• Disclose all qualifications, limitations, and certifications relevant.
• Not conceal any facts detrimental to the consumer.
These guidelines specifically prohibit generic advertising phrases such as eco-friendly and planet safe which have no substantial backing at all.
India’s Disjointed Statutory Framework:
Without a distinct legislation for greenwashing, India has a disjointed regulatory framework comprising laws relating to environmental regulations and consumer protection that can deal with greenwashing issues.
The key legislation that deals with greenwashing is the Consumer Protection Act of 2019. It prohibits unfair trade practices and misleading advertisements regarding the quality and environmental advantages of commercial goods. The CCPA has extensive powers of investigation and can direct the withdrawal of products.
Environmental representations are subject to indirect regulation by virtue of the Environment (Protection) Act, 1986 that enables the Central Government to impose requirements for environmental protection and to oversee sustainable development. In addition to being geared towards pollution control, the legislation is supportive of consumer interests in that it ensures corporate responsibility and accountability.
Additionally, the Legal Metrology Act, 2009 and the Competition Act, 2002 are the legislation that supports the above-discussed framework. The first one governs disclosure of information on prepackaged goods and the second one prevents anti-competitive and deceptive conduct.
Statutory Genesis of the 2024 Guidelines:
In view of the increasing prevalence of greenwashing, the Central Consumer Protection Authority issued the Greenwashing Guidelines, 2024 under Section 18 of the Consumer Protection Act, 2019. This is a special regulation that provides codified rules for the environmental claims made by companies.
With regard to the Guidelines, environmental claims have to:
• Always be entirely factual.
• Use reliable evidence.
• State their foundation clearly.
• Not use ambiguous, exaggerated, or unverifiable language.
• Make all qualifications known.
• Not suppress any misleading data.
The firm must be able to back up with full evidentiary proof its claims about actual performance in the course of any active advertisement. The Guidelines specifically forbid any unsubstantiated use of generic promotional language, including such phrases as “green,” “eco-friendly,” “natural,” or “sustainable.”
In line with the Guidelines, environmental claims should:
• Be accurate in facts.
• Relate to empirical evidence that can be verified.
• State clearly how they are based.
• Contain no ambiguity, exaggeration, or unverifiable language.
• Reveal any qualifiers of application.
• Never obscure deceptive statistics.
Firms should have full documentation to demonstrate that promotion is consistent with performance. The Guidelines categorically ban unsupported use of marketing jargon such as “green,” “eco-friendly,” “natural,” or “sustainable.”
Hurdles in Regulating Greenwashing from Jurisprudence Perspective:
In spite of the adaptation in legislation currently witnessed, some persistent barriers stand in the way of enforcement.
Absence of Unified Statutory Definitions:
There are many environmental terms that lack a unified legal definition. Terms such as “green,” “natural,” “clean,” or “eco-friendly” receive varying definitions within various industries, thereby making objective evidence difficult.
Assessing Corporate Environmental Assertions:
Environmental claims generally entail highly complex empirical determinations pertaining to emissions throughout their life cycle, carbon footprint, recycling and environmental impacts. This requires technical expertise on the part of the tribunal enforcing the claims.
Digital and Social Media:
Advertisement today is carried out using digital means and brand influencers. The dissemination of misleading environmental claims on social media makes enforcement much more difficult.
Administrative Costs:
Companies incur high costs in acquiring third party certifications, conducting environmental audits, maintaining archives for sustainability claims and verifying marketing claims. Small businesses carry heavier administrative burden than large capitalized multinationals.
Transnational Environmental Advertising:
Large transnational companies usually advertise same products in different jurisdictions. Different national environmental standards and regulatory frameworks complicate cross-border enforcement of misleading international advertisements.
Case Laws:
1. Hindustan Unilever Ltd. v. Reckitt Benckiser (India) Ltd. (2023):
In Hindustan Unilever Ltd. v. Reckitt Benckiser (India) Ltd. (2023), Hindustan Unilever appealed against certain orders restraining its comparative advertisements in respect of its cleaning agent, Domex. Hindustan Unilever claimed that the advertisements were not misleading or disparaging of its competitor, Reckitt Benckiser’s product called Harpic toilet cleaner.
Hindustan Unilever maintained that comparative advertising, where comparison of features of its product is done to highlight its superiority, is permissible under law. Reckitt Benckiser, however, asserted that these advertisements went beyond permissible limits because misleading statements were made and Harpic was disparaged instead of Domex being advertised.
The court held that while comparative advertising is permissible, the advertiser cannot mislead or disparage the competitor’s product. The court ordered removal of those portions of the advertisement which were found to be misleading and disparaging.
2. Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd., (2010)
In Dabur India Ltd. v. Colortek Meghalaya Pvt. Ltd. (2010), Dabur objected to a TV advertisement of ‘Good Knight Naturals’, a brand of mosquito repellent cream on the basis that it indirectly insulted its ‘Odomos’ product implying that other creams had the tendency of causing rashes, allergies, and stickiness.
According to Dabur, the above advertisement was unfair comparative advertising and also tarnished the image of its product while the respondents were of the opinion that the above advertisement simply brought out the special qualities of their product without targeting or insulting Dabur’s product in particular.
It has been held by the Delhi High Court that comparative advertising is perfectly acceptable only if there are no false statements about one’s product made against the competing product. Finding no such disparagement of Dabur’s product, the Court declined to pass any injunction as truth of commercial speech is covered under Article 19(1)(a).
3. Reckitt Benckiser (India) Ltd. v. Hindustan Unilever Ltd., 2021
In the case of Reckitt Benckiser (India) Ltd. v. Hindustan Unilever Ltd. (2021), Reckitt had raised objections to a series of advertisements conducted by Hindustan Unilever for Domex toilet cleaner and alleged that they were disparaging towards its Harpic product through comparisons and misrepresentations.
Reckitt claimed that the advertisements were not just limited to comparative advertising but rather disparaging Harpic by virtue of such advertisement and misleading and untrue in nature. HUL, on the other hand, argued that such advertisements only compared the superiority of Domex over any other product and hence were within the purview of comparative advertising.
Delhi High Court observed that though comparative advertising was a permitted practice, yet it could not consist of any statements that were false, misleading, and disparaging in nature towards the rival product.
4. Consumer Education and Research Society v. Union of India
Consumer Education & Research Society v. Union of India (2009) involved a petition regarding the constitutionality of the Parliament (Prevention of Disqualification) Amendment Act, 2006, where the petitioner alleged that the amendment arbitrarily allowed for certain offices to be exempted from disqualification based on the office of profit rule.
The petitioner alleged that the amendment was arbitrary, discriminatory, and unconstitutional in terms of its violation of Article 14. Union of India’s defense was that the parliament has legislative competence to define what kind of offices shall not fall under disqualification.
The constitutionality of the Amendment Act and consequently the petition was upheld by the Supreme Court, and it concluded that parliament has discretion in determining exemptions under the office of profit clause.
CONCLUSION:
One of the most notable challenges posed to environmental governance and consumer protection is greenwashing as it makes it possible for organizations to give off a false impression of their environmental performance which misleads consumers and creates an unfair competitive advantage. The legal environment in India, specifically the Consumer Protection Act, 2019 and CCPA Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 is definitely one of the most significant achievements in terms of ensuring the validity of environmental claims.
However, regulation of environmental claims goes beyond legislation itself. Effective enforcement, independent assessment of environmental claims, corporate governance, consumer awareness and advertisement ethics all play a critical part in preventing organizations from engaging in deceptive marketing. Given the rising environmental awareness, the validation of green claims will definitely be of high importance for promoting sustainable development.
FAQ
Q1. What is greenwashing?
Greenwashing is the practice of making false, exaggerated, or misleading environmental claims to create the impression that a product, service, or business is environmentally friendly.
Q2. Which law primarily regulates greenwashing in India?
The Consumer Protection Act, 2019, together with the CCPA Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024, forms the principal legal framework regulating greenwashing.
Q3. Why is greenwashing harmful?
Greenwashing misleads consumers, creates unfair market competition, undermines genuine sustainability efforts, and weakens public trust in environmental initiatives.
Q4. What role does the CCPA play in regulating greenwashing?
The Central Consumer Protection Authority (CCPA) investigates misleading advertisements, issues directions for their withdrawal, imposes penalties, and ensures compliance with consumer protection laws.
Q5. How can businesses avoid greenwashing?
Businesses should ensure that environmental claims are supported by credible scientific evidence, maintain transparency, disclose relevant qualifications, and comply with applicable consumer protection and environmental regulations.
Q6. Are environmental claims required to be scientifically verified?
Yes. Under the CCPA Guidelines, environmental claims should be truthful, evidence-based, capable of verification, and supported by reliable scientific or technical material.
Q7. Why is regulating greenwashing important?
Effective regulation protects consumer rights, promotes fair competition, encourages genuine corporate sustainability, and contributes to achieving broader environmental and climate goals.
