- Sangeeta Dutta a student at Christ (Deemed to be University) Delhi NCR
THE CONCEPT OF GREEWASHING
Greenwashing is the deceitful gimmick and a pack of tall claims of sustainable practices adopted by the company, which leads to delude the consumers who are exceptionally conscious of environment friendly brands. In the world full of people getting overscrupulous regarding sustainable development and environment, there’s a hovering pressure on the corporate sectors for achieving a certain threshold of contamination of environment and due to which they’re tossed to the verge of using fraudulent means to achieve such thresholds.
In India people nowadays are very serious regarding health issues especially after the COVID-19 pandemic as since then on there’s a severe height in people being affected by serious health issues. Also, we see that nowadays we are experiencing more and more natural disasters in all the places, the recent examples can be the Wayanad landslide or heavy rainfall in Himachal or floods in Imphal valley and many other instances can be listed likewise. All of these raise’s concerns in the mind of humans regarding our future or our future generations, which is now forcing them to be conscious of our surrounding and being responsible for the ecosystem where we are living. Hence, now they’re looking for buying products from those brands which has a goodwill for their best sustainable practices, but the corporate sector is struggling with meeting the sudden expectations of the consumers and at the same time balancing the two market forces (consumers demand and producers supply), which is then leading them to use unfair practice of greenwashing for maintaining their finances as well as brand value.
LEGAL FRAMEWORK
Recently on November 18, 2023 the Department of Consumer Affairs constituted a committee for reviewing the issues of greenwashing. This committee then provided the “Draft guidelines for prevention and regulation of greenwashing, which suggested that an amendment shall be made in the existing Consumer Protection Act, 2019, section 18(2)(1).
Section 2(1)(e) of the draft clearly defines the scenario of greenwashing as:
- any deceptive or misleading practice, which includes concealing, omitting, or hiding relevant information, by exaggerating, making vague, false, or unsubstantiated environmental claims.
- (ii) use of misleading words, symbols, or imagery, placing emphasis on positive environmental aspects while downplaying or concealing harmful attributes.
but shall not include (i) use of obvious hyperboles, puffery, or (ii) the use of generic colour schemes or pictures; either not amounting to any deceptive or misleading practice.
Section 5 of this draft prohibits the practice of greenwashing by any or everyone coming under the ambit of this act.
Also, Greenwashing falls under the purview of Section 2(47) and 75 of the Consumer Protection Act, 2019, which deals with misleading or false advertisement and claims. Other that there are several other bodies which aims to regulate such practices as well.
Bureau of Indian Standard (BIS) has created IS/ISO 14024:1999 as a standard for eco-labelling goods and services, which offers recommendations for business making environmental claims in their advertising as well as standards for the use of eco-labels.
The Ministry of Environment, forests, and Climate Change (MoEFCC) launched the Green good deed campaign with the intention of urging people and organizations to adopt particular steps to lessen their influence on the environment. Furthermore, it offers advice for business making environmental statements made in their marketing.
India’s Advertising Standards Council’s (ASCI) code mandates that the environmental claims must be precise and true to the best of their knowledge, as they act as the regulatory body of the nation’s advertisements.
The Science Environment Centre (CSE) is authorised to assign rankings to India’s corporate environmental performance. These rankings are determined by evaluating the company’s policy frameworks. Environment management systems and their execution.
All of them in some or the other ways are attempting to minimise the practice of greenwashing by various corporate entities and safeguarding the interests of the consumers at the same time.
THE PROOF
Corporate entities engaging in the practice of greenwashing is evident across the globe which has time and again attracted the attention of individuals. Evidently these instances have successfully disappointed the consumers and have shattered their trusts on those brands for whom they have been a loyal customer for years maybe.
In 2010 the UK supermarket chain Tesco, the very famous brand advertised the “Everyday Value” light bulbs by claiming them to be carbon neutral, last for 8 years and save consumers money and energy. However, it was later discovered that the fake promises were actually made on the basis of some erroneous calculations and the bulbs in reality only lasted for a few months and were inefficient in terms of energy. The UK’s Advertising Standards Authority (ASA) fined TESCO to a hefty amount.
The year 2010 marked another such deception by the famous KFC, which allegedly have misled consumers about the environmental credentials of its coffee being certified by the non-profit Rainforest Alliance who are dedicated in encouraging sustainable farming. The coffee was only 10% approved and KFC lacked authorization to utilize the Rainforest Alliance logo for marketing their products. Hence, they were penalised by ASA.
In 2015 we witnessed the Volkswagen’s “Clean diesel” scandal where we consumers found that very conveniently, we have been cheated by the emission tests records been showed to us and glorifying themselves as ecologically benign. The United States environmental protection agency exposed the reprobate software that gave such deceitful test results and revealed the reality of Volkswagen generating more than 40 times the permissible limits of pollutants. Volkswagen eventually reached a settlement with the US government and paid damages in the form of billion dollars of fines and compensation to the impacted customers after refuting and invalidating the mistakes committed by them till the very end in several lawsuits and regulatory sanctions.
A cluster of environmental organization sued H&M in 2020, claiming that it had deceived the consumers by portraying that they have significantly advanced towards its sustainability goals and that the company’s marketing materials were deceptive. They were condemned for practicing greenwashing.
All these instances form substantial evidence of greenwashing being practiced profoundly by the corporate entities for the purpose the trying to meet the growing expectations of environment friendly products/services of the consumers.
ABSTRACT
The thriving consumer’s fascination with eco-friendly products/services have pushed the producers on the verge of taking a huge risk of cheating the consumers with fraudulent and misleading claims and advertisements. But it is crucial to understand the situation of the producers when they have a mounting responsibility of producing eco-friendly products with the same budget from which they were earlier producing not so eco-friendly products. These are the issues which gives rise to the concepts of green financing, green bonds and many other solutions.
This article attempts to understand the concept of greenwashing, its consequences with the help of some existing instances of corporations indulging in the practice of greenwashing. It also studies the painstaking efforts taken by our government alongside various other organisations in the legal inclusions of greenwashing in India. The latter part of this article will also discuss the various solution which can help in ensuring transparency and accountability authentically incorporated by the companies.
CASE LAWS
The first ever judgement on greenwashing was held in the district court of Amsterdam against KLM, an airline company which issue 19 misleading statements in their suitability campaign. It was held in this case that 15 out of these 19 statements were found to be in contravention of Dutch unfair Commercial Practices Act. The said that the use of the term “sustainability” in itself is not fallacious but it is the responsibility of the company to make the context of the word clear, there should not be any ambiguity.
Godrej Industries advertised that “Good Knight Fast Card” is 100% natural and chemical free. The Advertising Standards Council of India (ASCI) in 2012, found this claim deceptive and fraudulent and fined the Godrej Industries Rs. 5 Lakhs.
In 2011 Hindustan Unilever Limited advertised their product Surf Excel Easy Wash detergent as 100% natural and environment friendly. The Indian government’s Ministry of Environment and Forests fined HUL Rs. 10 Lakhs for making fraudulent representation in its advertisement and revealed that this product actually contained artificial components.
The firm Voltas Limited of the TATA group was charged with fabricating claims on the energy efficiency of its air conditioners, as the company advertised that its products are eco-friendly and has a 5-star energy rating. However, in reality the actual energy rating was much lower and hence they had to pay Rs. 50,000 to ASCI.
In 2015 Godrej Consumers products Limited was charged by ASCY with Rs. 15 Lakhs for fabricating statements on the environmental advantages of its “Godrej No. 1 Soap”. Although the soap contained synthetic chemicals, the business had claimed that it was 100% natural, biodegradable and eco-friendly.
India’s Patanjali Ayurveda Limited (PAL) is a tiny Pharmacy located near Haridwar, Divya Pharmacy is also a unit of this company as well. The Ayurveda and Unani Licensing Authority ordered the discontinuation of 5 alleged drugs. Ophthalmologist KV Babu of Kerala filed a complaint against Divya Pharmacy in July, alleging that the Pharmacy had broken the Drugs and Magic Remedies Act, 1954, the Drugs and Cosmetics Act, 1940 and the Drugs and Cosmetic rules of 1945. KV Babu sent more than a hundred RTI application to the Indian Press Council, the Uttarakhand Ministry of Ayush, Ayurveda, and the Unani Services, and the drugs controller general of India. The supreme Court held that if a product is falsely claimed to be able to treat a certain specified illness, it would be fined one crore rupees.
CONCLUSION
Greenwashing, the practice of businesses in India’s corporate landscape making false environmental claims in an attempt to take advantage of consumers’ increased environmental consciousness, has become a major concern. This behaviour not only misleads customers, but it also impedes sincere attempts to achieve sustainability. An increasing understanding of this issue at the governmental level is evident in recent regulatory initiatives, such as the Department of Consumer Affairs forming a group to combat greenwashing and the planned modifications to the Consumer Protection Act, 2019.
Ideas like green bonds and green financing have gained traction as viable ways to counteract greenwashing and support real sustainability initiatives. Financial investments in environmentally friendly and sustainable projects and activities are referred to as “green financing.” A subclass of green finance known as “green bonds” are fixed-income instruments designed especially to raise capital for environmental and climate-related initiatives. These financial tools give businesses the ability to support environmentally beneficial projects without using deceptive marketing strategies. Businesses can meet investor and consumer demands for sustainability while also really improving their environmental performance by utilizing these strategies.
A multifaceted strategy is needed to combat greenwashing, including bolstering regulatory frameworks, raising consumer awareness, increasing business openness, and supporting real sustainable advances. As evidenced by recent incidents, the imposition of severe fines for violators acts as a deterrence. India can create a business climate that appreciates genuine sustainability efforts by combating greenwashing and supporting legitimate green initiatives. This would help the country achieve its environmental goals and keep consumers’ faith in the market.
FAQ
- Explain the concept of Greenwashing?
To appear more environmentally friendly than they actually are, businesses engage in a dishonest practice known as “greenwashing,” in which they make misleading or exaggerated claims about their environmental policies or products. It frequently entails making ambiguous, inaccurate, or unsupported environmental statements as well as withholding, deleting, or distorting pertinent information.
- What steps is India taking to combat greenwashing?
India is combating greenwashing in a number of ways, such as:
- The Consumer Protection Act of 2019 may be amended.
- The Department of Consumer Affairs established a group to examine issues related to greenwashing.
- Directives from organizations such as the Bureau of Indian Standards (BIS) and the Advertising Standards Council of India (ASCI).
- The Ministry of Environment, Forests, and Climate Change’s (MoEFCC) Green Good Deed campaign.
- The Science Environment Center’s (CSE) rankings of company environmental performance.
- Do Indian laws specifically prohibit greenwashing?
Although there isn’t a specific regulation that addresses greenwashing, it is covered by the Consumer Protection Act of 2019’s sections 2(47) and 75, which address deceptive advertising and false claims. Furthermore, adding explicit prohibitions against greenwashing to the Consumer Protection Act is one of the recommendations made in the newly proposed “Draft guidelines for prevention and regulation of greenwashing” amendment.
- Which Indian cases of greenwashing are there?
Among the noteworthy instances are:
The deceptive statements made by Godrej Industries regarding their “Good Knight Fast Card”, Hindustan Unilever Limited’s deceptive promotion of Surf Excel Easy Wash detergent, Voltas Limited’s made-up claims on the energy efficiency of their air conditioners and the false statements made by Godrej Consumer Products Limited on the natural and environmentally beneficial nature of “Godrej No. 1 Soap”.
- How can customers spot greenwashing?
Customers ought to:
- Be cautious when relying on hazy or unproven environmental promises.
- Search for precise and corroborating data.
- Look into the environmental policies of businesses as a whole rather than depending just on promotional promises.
- Look for certified eco-labels or third-party certifications that adhere to established guidelines.
- How do greenwashing and green financing relate to each other? What are green bonds and financing?
Financial investments in environmentally friendly and sustainable projects and activities are referred to as “green financing.” Green bonds are fixed-income instruments designed with the express purpose of raising capital for environmental and climate-related projects. These financial tools give businesses a respectable way to finance environmentally conscious projects without using deceptive marketing strategies, enabling them to genuinely enhance their environmental performance and satisfy the needs of investors and customers for sustainability.
- Are there any global guidelines that Indian businesses need to go by in order to prevent greenwashing?
Yes, Indian businesses are able to verify compliance and steer clear of greenwashing tactics by consulting foreign standards. A standard for eco-labelling goods and services, IS/ISO 14024:1999 was adopted by the Bureau of Indian Standards (BIS) and provides guidance to companies who wish to advertise environmental claims.
- What effects does greenwashing have on the environment and consumers?
Greenwashing deceives customers into thinking they are choosing products that are ecologically friendly when they may not be. This may undermine consumer confidence in environmentally friendly advertising and deter sincere environmental initiatives. Additionally, it takes money and attention away from genuine sustainability activities, which could impede the advancement of environmental challenges.
REFERENCES
- Vijayalakshmi, S. “A Case Study Approach to Uncover Greenwashing and Ensure Consumer Protection.” Shanlax International Journal of Arts, Science and Humanities 11–11, no. S3 (February 2024): 128–33. https://doi.org/10.34293/sijash.v11iS3-Feb.7254.
- Consumer Protection Act, 2019, No. 35, Acts of Parliament, 2019 (India).
- Sonawala Manoj, “Green Washing and Green Blushing”, CHARTERED SECRETARY, April 2023, 45. https://www.icsi.edu/media/webmodules/CSJ/April/11ArticleManojSonawala.pdf.