Author: Suhani Arora
College: Svkm’s NMIMS, School Of Law, Mumbai
LinkedIn Link : https://www.linkedin.com/in/suhani-arora-a62902257
Abstract
Environmental sustainability has become a powerful marketing tool, with businesses increasingly promoting products and services as “eco-friendly,” “sustainable,” or “carbon-neutral.” While many of these claims reflect genuine environmental initiatives, others exaggerate or misrepresent a company’s environmental performance, a practice commonly known as greenwashing. Such claims not only mislead consumers but also undermine businesses that invest in genuine sustainability.
India has traditionally addressed environmental harm through statutes such as the Environment (Protection) Act, 1986, the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981. More recently, the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024, issued by the Central Consumer Protection Authority (CCPA) under the Consumer Protection Act, 2019, have extended regulatory attention to misleading environmental representations. This article examines how environmental and consumer protection laws collectively strengthen corporate accountability by regulating both environmental conduct and environmental communication.
To the Point
Greenwashing is fundamentally a form of corporate misrepresentation. Businesses often promote environmental responsibility through advertisements, labels, packaging, or sustainability claims that may not accurately reflect their actual practices. Such representations influence consumer choice, distort fair competition, and weaken confidence in genuine sustainability initiatives.
For decades, India’s environmental framework primarily focused on preventing pollution and penalising environmental damage after it occurred. Although these laws regulated industrial activities, they were not specifically designed to examine whether environmental claims made to consumers were truthful. This regulatory gap has become increasingly significant as sustainability has emerged as an important factor influencing consumer behaviour and investment decisions.
The CCPA’s Greenwashing Guidelines, 2024 address this concern by requiring environmental claims made in commercial communications to be clear, specific and capable of substantiation. Rather than replacing environmental legislation, they complement it by recognising that corporate accountability extends beyond environmental performance to the accuracy of environmental representations made to consumers. This reflects a broader shift in Indian regulation, where preventing consumer deception is becoming an important aspect of environmental governance.
Use of Legal Jargon
Corporate environmental accountability in India is shaped by constitutional principles, environmental legislation and consumer protection law.
The constitutional foundation lies in Article 21 of the Constitution, which the Supreme Court has interpreted to include the right to a clean and healthy environment. In Subhash Kumar v. State of Bihar (1991), the Court recognised that the right to life includes the enjoyment of pollution-free water and air. This interpretation was further strengthened through the M.C. Mehta decisions, which firmly established environmental protection as an integral component of fundamental rights.
The principal statutory framework is provided by the Environment (Protection) Act, 1986, enacted after the Bhopal Gas Tragedy. It empowers the Central Government to prescribe environmental standards, regulate industrial activities and issue binding directions against polluting industries. Complementing this legislation are the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981, both of which require industries to obtain regulatory consent and empower Pollution Control Boards to monitor compliance and initiate enforcement action.
Environmental disputes are adjudicated by the National Green Tribunal (NGT), established under the National Green Tribunal Act, 2010. The Tribunal is required to apply the principles of sustainable development, the precautionary principle and the polluter pays principle while deciding environmental disputes.
Recognising the growing use of sustainability-based marketing, the CCPA issued the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 under the Consumer Protection Act, 2019. The Guidelines require environmental claims appearing in advertisements, labels, packaging and other commercial communications to be truthful, specific and supported by credible evidence. Although the Guidelines themselves do not create independent criminal offences, misleading environmental claims may attract regulatory action under the Consumer Protection Act where the statutory requirements are satisfied.
Three judicial doctrines continue to underpin Indian environmental jurisprudence. The polluter pays principlerequires polluters to bear the cost of preventing and remedying environmental harm. The precautionary principleencourages preventive action where there is a credible risk of environmental damage, while the doctrine of absolute liability, evolved in the Oleum Gas Leak Case, imposes strict responsibility upon enterprises engaged in inherently hazardous activities without permitting the traditional exceptions recognised under English law.
The Proof
The need to regulate greenwashing is evident from the growing use of environmental claims as a marketing strategy. Misleading sustainability claims distort consumer choice, disadvantage businesses that genuinely invest in environmentally responsible practices, and weaken confidence in environmental governance.
A prominent example is the Volkswagen “Dieselgate”controversy. In 2015, investigations revealed that certain Volkswagen diesel vehicles were fitted with defeat devices capable of detecting laboratory emission tests while emitting substantially higher pollutants during normal driving conditions. In India, the matter came before the National Green Tribunal (NGT), which directed Volkswagen to deposit ₹100 crore as an interim measure and subsequently imposed environmental compensation of ₹500 crore based on an expert committee’s findings. The proceedings demonstrated that corporate claims regarding environmental compliance are capable of regulatory scrutiny where they fail to reflect actual environmental performance.
Corporate accountability also extends to sustainability reporting. The Securities and Exchange Board of India (SEBI) requires the top 1,000 listed entities by market capitalisation to publish Business Responsibility and Sustainability Reports (BRSR). While the framework has improved transparency by standardising environmental, social and governance (ESG) disclosures, reporting alone cannot eliminate greenwashing. Effective verification and regulatory oversight remain essential to ensure that sustainability disclosures accurately reflect corporate practices.
The CCPA’s Greenwashing Guidelines, 2024 complement environmental legislation by addressing misleading environmental representations before they influence consumer decisions. Together, these developments demonstrate that India’s regulatory approach now extends beyond controlling pollution to ensuring that environmental claims made by businesses are truthful, transparent and capable of substantiation.
Case Laws
1. M.C. Mehta v. Union of India (Oleum Gas Leak Case), (1987) 1 SCC 395
The Supreme Court evolved the doctrine of absolute liability, holding that enterprises engaged in inherently hazardous activities are liable for harm caused by such activities without the exceptions recognised under the English rule of strict liability. The decision established a higher standard of corporate responsibility for hazardous industries.
2. Indian Council for Enviro-Legal Action v. Union of India, (1996) 3 SCC 212
The Court applied the polluter pays principle, holding that industries responsible for environmental damage must bear the cost of restoring the affected environment rather than shifting that burden to the public.
3. Vellore Citizens’ Welfare Forum v. Union of India, (1996) 5 SCC 647
The judgment reinforced a preventive approach to environmental governance by recognising the precautionary principle and the polluter pays principle as central to Indian environmental jurisprudence. It made clear that environmental regulation should prioritise avoiding ecological harm and holding polluters financially accountable for the damage they cause.
4. M.C. Mehta v. Kamal Nath, (1997) 1 SCC 388
Applying the public trust doctrine, the Court held that natural resources are held by the State in trust for the public and cannot be diverted for private commercial exploitation in a manner detrimental to the environment.
5. Sterlite Industries (India) Ltd. v. Tamil Nadu Pollution Control Board
The prolonged litigation concerning the Sterlite copper smelter highlighted the challenges of enforcing environmental regulation against large industrial enterprises. The proceedings reinforced the importance of regulatory oversight, environmental compliance and judicial review in industrial pollution disputes.
Conclusion
India’s environmental laws have evolved from addressing pollution alone to promoting greater corporate accountability through both environmental regulation and consumer protection. The Greenwashing Guidelines, 2024 recognise that misleading environmental claims can harm consumers even before measurable environmental damage becomes apparent.
However, legislation alone cannot eliminate greenwashing. Effective enforcement, credible verification of environmental claims and consistent regulatory oversight remain essential to ensure that sustainability claims are supported by genuine environmental practices rather than marketing strategies. As sustainability increasingly influences consumer choice and corporate governance, truthful environmental communication will remain an important aspect of corporate accountability in India.
FAQs
Q1. Is greenwashing illegal in India?
Yes. Misleading environmental claims may constitute misleading advertisements or unfair trade practices under the Consumer Protection Act, 2019, while the CCPA Greenwashing Guidelines, 2024 provide the framework for assessing such claims.
Q2. What is the polluter pays principle?
It requires polluters to bear the cost of preventing, mitigating and remedying environmental harm instead of transferring those costs to the public or the State.
Q3. Can a company face legal action for misleading environmental claims even without proven environmental damage?
Yes. Misleading environmental representations may attract regulatory action under the Consumer Protection Act, 2019, irrespective of separate proceedings concerning environmental pollution.
Q4. Are SEBI’s BRSR requirements sufficient to prevent greenwashing?
No. Although BRSR has strengthened sustainability reporting, effective verification and regulatory oversight remain necessary to ensure that disclosures accurately reflect corporate practices.
