With growing environmental awareness and increasing health concerns, consumers are actively seeking eco-friendly products. This surge in demand has led to several companies resorting to sustainable sourcing and promoting their products and services as environmentally friendly. It’s important to note that not all environmental claims companies make can be trusted. Greenwashing is a deceptive marketing strategy that some companies use to give consumers the impression that their products or services are environmentally sustainable when they may not. As a result, consumers may be misled into believing that they are making eco-friendly choices when they are not.
There have been instances in global markets where companies have highlighted minor environmentally conscious actions while downplaying the overall impact of their operations.
Companies may use vague tags/terms like “natural”, “eco-friendly”, or “green” for their products without having corroborating evidence in place to support such claims. With the rise of environmental concerns, consumers are now more conscious of greenwashing tactics and are making more informed purchasing decisions. They seek out credible third-party certifications to ensure that products are genuinely sustainable.
Introduction
In 1986, environmentalist Jay Westerveld created the term “greenwashing” to criticise the hotel industry’s common practice of promoting the reuse of towels as an environmental initiative. In reality, this was a cost-saving measure that overlooked the broader environmental impact of their operations.
Scenario in India
Greenwashing, the practice of promoting misleading or false environmental claims to portray a company or product as environmentally friendly deceptively, is also a prevalent issue in India. Unlike the USA, EU, etc., India lacks specific laws regulating environmental claims made by companies. This regulatory gap makes it challenging to penalise the companies engaging in such practices.
In February 2023, the Securities and Exchange Board of India (SEBI) (Link) issued Do’s and Don’ts guidelines for issuers of green debt securities to ensure transparency towards green practices. ‘Green debt security’ has been defined as debt security issued for raising funds for project(s) and/or asset(s) of these categories – renewable and sustainable energy including wind, bioenergy, other sources of energy which use clean technology; clean transportation; climate change adaptation; energy efficiency including efficient and green buildings; sustainable waste management including recycling, waste to energy, efficient disposal of wastage; sustainable forestry and agriculture; biodiversity conservation; pollution prevention and control; circular economy adapted products such as design and introduction of reusable, recyclable and refurbished materials; blue bonds for sustainable water management; yellow bonds for solar energy generation; transition bonds for transitioning to a more sustainable form of operations, etc.
Issuers of green debt security must continuously monitor the environmental impact of operations, not utilise funds raised through green bonds for projects other than the ones falling in the definition of ‘green debt security’, disclose any form of deviation/s from green practices to investors, avoid misleading labels or manipulate data research, uphold the highest standards in green debt security issuance, quantify adverse environmental impacts, and refrain from making false claims of third-party certifications.
Despite the existence of these regulations, the broader issue of greenwashing and its consequences still needs to be addressed in India. It not only misleads consumers but also undermines genuine efforts towards environmental sustainability. Currently, few legislations interplay to tackle these practices; however, the lack of comprehensive regulations and enforcement mechanisms allows companies to engage in greenwashing practices without facing any consequences.
Laws in India
The Advertising Standards Council of India (ASCI) plays a regulatory role in monitoring advertising practices and holds some jurisdiction over allegations of greenwashing. It has been working on guidelines for green and sustainability claims (Link). As per the Consumer Protection Act of 2019, consumers have the right to be informed about the quality, quantity, potency, purity, standard, and price of goods, products, or services. This is to protect them against any unfair trade practices. Consumers have the right to file a complaint against any trader or service provider engaging in any unfair trade practice. The Act outlines various forms of unfair trade practices, including making false statements about the standard, quality, quantity, grade, composition, style, or model of goods or services and providing misleading information regarding the usefulness or necessity of any goods or services. Misleading advertisements are those that falsely describe a product or service or convey an express or implied representation by the manufacturer, seller, or service provider that would constitute an unfair trade practice. Such advertisements are considered to be deceptive and can mislead consumers.
Apart from these, the Bureau of Indian Standards (BIS), Food Safety and Standards Act, 2006, National Green Tribunal Act and the Green Rating Project (GRP) also extend ancillary hand.
Strategies for Authentic Engagement with Sustainability
In an era where environmental consciousness is a significant driver of consumer choices, many brands wish to align themselves with sustainability and eco-friendliness. To authentically engage with climate change without falling into the greenwashing pitfall, here are some strategies that companies can resort to while advertising their products:
- Be transparent about their sustainability efforts;
- Provide verifiable information about their eco-friendly products;
- Seek third-party certifications or audits to validate their claims;
- Avoid usage of misleading and vague terms for promotion/marketing;
- Ensure consistency between marketing claims and actual practices;
- Compliance with all environmental laws and regulations;
- Education and awareness initiatives amongst employees are equally vital;
- Collaborate with environmental organisations, experts and research institutions for regular guidance.
In conclusion, navigating climate responsibility is a multi-faceted endeavour, encompassing certifications, education, and regulatory support. By adopting these strategies and adhering to existing laws, brands can genuinely contribute to the fight against climate change while fostering consumer trust and loyalty.