CCPA issues guidelines against greenwashing, misleading environmental claims

The Central Consumer Protection Authority (CCPA) has unveiled comprehensive guidelines for the prevention and regulation of greenwashing and misleading environmental claims.

The guidelines seek to foster truthful practices where environmental claims are both truthful and meaningful, thus enhancing consumer trust and encouraging sustainable business practices.

“Greenwashing” is a term that plays on the word ‘whitewashing’ and refers to the marketing tactic where companies falsely claim or exaggerate the environmental benefits of their products or services, often using vague or unsubstantiated terms such as “natural,” “eco-friendly,” or “green.” Therefore, by creating an illusion of environmental responsibility, many unscrupulous companies end up exploiting consumers' growing environmental sensitivity. This deceptive practice not only misleads well-intentioned consumers but also diverts attention from broader environmental efforts.

A committee chaired by Consumer Affairs Secretary Nidhi Khare was constituted on greenwashing.

Amongst the members from academia (Professor Dr.Sushila, NLU, Delhi and Prof Ashok R. Patil, Vice Chancellor, NLU Ranchi); practitioners (Nishith Desai Associates), activists/organisations (Shirish Deshpande, Mumbai Grahak Panchayat and S.Saroja, Consumer Voice) and representatives from ASCI, FICCI, Assocham, and CII formed the wide spectrum of stakeholders.

After adequate deliberations the committee submitted its recommendations.

Based on the recommendations of the committee the Department of Consumer Affairs (DoCA) placed the Draft Guidelines for Greenwashing for public comments on February 20, 2024.

Public suggestions were received from 27 various stakeholders, which included:

- specific environmental claims must be supported by disclosure about credible certification, reliable scientific evidence.

-words such as sustainable, natural, organic, regenerative and similar assertions shall not be used without adequate, accurate and accessible qualifier.

-adequate disclosures on claims are essential for environmental claims such as ‘natural’;’organic’;’pure’.

Khare said that the guidelines do not prohibit environmental claims but seek to ensure they are made with integrity and transparency. She also added that CCPA may initiate individual or class actions if investigations indicate violations of the Consumer Protection Act, greenwashing guidelines, and other relevant rules.

The guidelines are drafted in the wake of the rapid increase of advertisement of green (environmental friendly) products and the growing number of environmentally aware consumers.

These guidelines are designed not to stifle companies' environmental efforts of manufactures and service providers but to ensure that such claims are transparentand made with integrity.

Companies are encouraged to highlight their environmental initiatives, provided these claims are backed with proper disclosures and credible evidence. The primary goal of these guidelines is to shield consumers from misleading information while promoting genuine environmental responsibility within the business community.

By mandating that companies substantiate their environmental assertions, the guidelines seek to foster a marketplace where environmental claims are both truthful and meaningful, thus enhancing consumer trust and encouraging sustainable business practices, it was said.

Key features of the guidelines:

- Clear Definitions: The guidelines provide clear definitions of terms related to greenwashing and environmental claims, ensuring that both businesses and consumers have a common understanding.

- Transparency Requirements: Manufacturers and service providers are required to substantiate their environmental claims with credible evidence. This includes providing detailed information on the methodology and data used to support such claims.

- Prohibition of Misleading Terms: The use of vague or misleading terms such as "eco-friendly," "green," and "sustainable" without proper substantiation is sought to be prohibited.

- Third-Party Certifications: Third-Party Certificationsare also accepted in substantiation of environmental claims.

- Adequate Disclosures: The companies are required to provideclear and accessible disclosures of material information. Claims must specify the aspect refer to (good, manufacturing process, packaging, etc.) and be supported by credible certification or reliable scientific evidence.