New guidelines on greenwashing and false environmental claims

The guideline will be applicable to manufacturers, service providers, traders, advertising agencies and endorsers of the products. These measures come in response to the increasing prevalence of advertisements for environmentally friendly products and a growing consumer awareness regarding environmental issues.

As outlined in the new guidelines addressing greenwashing and misleading environmental claims, companies that assert they are eco-friendly, green, organic, or sustainable will now be required to disclose the basis for these claims. Failure to do so will result in penalties for “misleading advertising” and unfair trade practices under the Consumer Protection Act (CPA). The primary aim of these guidelines is to protect consumers from misleading information while fostering genuine environmental responsibility among businesses.

The guidelines apply to a wide range of entities, including manufacturers, service providers, traders, advertising agencies, and endorsers. Importantly, they do not seek to prohibit environmental claims; instead, they emphasize the need for these claims to be made with integrity and transparency. The use of vague terms such as “eco-friendly,” “green,” and “sustainable” without proper substantiation is explicitly prohibited.

According to the guidelines, “Manufacturers and service providers are required to substantiate their environmental claims with credible evidence and this includes providing detailed information on the methodology and data used to support such claims.”

These measures come in response to the increasing prevalence of advertisements for environmentally friendly products and a growing consumer awareness regarding environmental issues. The guidelines stress the importance of using consumer-friendly language, especially when explaining technical terms like “environmental impact assessment,” “greenhouse gas emissions,” and “ecological footprint.” Advertisers are encouraged to simplify these concepts to enhance consumer understanding and are warned against selectively presenting data to highlight favorable results while ignoring less favorable findings.

The Central Consumer Protection Authority has the authority to impose penalties for misleading corporate claims under Section 24 of the CPA, with fines reaching up to Rs50,000 for initial violations and escalating to Rs1 crore for repeat offenses. Under Section 21, first-time offenders of misleading advertisements may face fines up to Rs 10 lakh, while repeat offenders could incur fines up to Rs 50 lakh and face potential imprisonment of up to two years.