SEPTEMBER 10, 2024

By M G Kodandaram, IRS, Assistant Director (Retd), ADVOCATE and CONSULTANT

Introduction

IN an era where environmental awareness is heavily shaping consumer behavior, companies are under increasing pressure to embrace sustainable practices. However, this growing demand for eco-friendly solutions has given rise to the deceptive tactic of "greenwashing".

This occurs when businesses falsely portray their products, policies, or operations as environmentally responsible to appeal to eco-conscious customers. Greenwashing not only misleads consumers but also undermines genuine efforts toward sustainability. (Refer to 'The Heat is on: Preserving Earth's Climate in the Face of Global Warming'- by the author - MAY 06, 2024) While companies may gain short-term benefits, the long-term consequences for the environment and their reputations can be severe. To achieve meaningful progress, businesses must commit to authentic environmental responsibility, regulators must enforce stricter guidelines, and consumers must remain diligent in seeking truth in advertising. Only through collective action can true sustainability be achieved and greenwashing eradicated.

Definition of Greenwashing.

The term "greenwashing" was introduced by environmentalist Jay Westerveld in 1986 to describe the misleading practices of companies that pretended to prioritize environmental concerns while continuing to operate unsustainably. It combines "green," representing eco-friendliness, with "whitewashing," which denotes concealing undesirable practices. Greenwashing involves disseminating misleading or unverifiable claims to create a deceptive image of environmental responsibility. By engaging in this practice, businesses commit a dual offense: they deceive consumers with false promises that take advantage of their environmental concerns, while also misleading policymakers to gain benefits under the pretense of sustainability. Ultimately, this results in the exploitation of the environment in an unsustainable manner

In contrast to greenwashing, which inflates a company's sustainability claims, "greenhushing" involves deliberately downplaying or under-communicating genuine sustainable practices. While greenwashing and greenhushing are opposites - one overstates, the other understates -a common thread is their in authenticity regarding sustainability. In this sense, the two concepts are reflective of each other, representing different facets of disingenuous environmental messaging. By not communicating their genuine efforts, companies can inadvertently harm the broader goal of advancing sustainability and environmental stewardship.

This article discusses the harmful impact of this practice on both consumer and environmental interests, as well as the regulatory framework in India designed to protect consumers from such misleading publicity.

Tactics of Greenwashing

Companies may resort to greenwashing for several reasons, such as a lack of confidence in their true sustainability efforts, insufficient resources to invest in genuine environmental initiatives, or weak consumer demand for eco-friendly products. Moreover, some businesses may not consider sustainability a key strategic priority, viewing it as a secondary concern rather than a core aspect of their operations. As a result, these companies are often less inclined to pursue or invest in authentic sustainability measures, choosing instead to make superficial green claims to improve their image without taking significant action. (Refer to ‘Beyond Laws - Ethical solutions - Building a flourishing planet' by the author APRIL 09, 2024)

Greenwashing can take many forms, from subtle marketing tactics to blatant falsehoods. Companies might use buzzwords like "natural," "eco-friendly," or "sustainable" without providing any solid evidence or certifications to support these claims. Such vague and misleading statements create a deceptive appearance of environmental responsibility. Another common strategy involves the use of fake or self-created environmental certifications, falsely suggesting third-party endorsement. This tactic misleads consumers into believing a product meets specific sustainability standards.

Companies often emphasize a minor eco-friendly feature of their product while overlooking more substantial negative environmental impacts. For instance, a company may promote its use of recycled packaging while its manufacturing process remains highly polluting. By incorporating green colors, nature-themed imagery, and eco-symbols in their branding, they create the illusion of environmental responsibility, even if the product or company lacks a true commitment to sustainability.

Some companies participate in carbon offsetting, a practice where they attempt to balance out their carbon emissions by investing in environmental initiatives such as reforestation or renewable energy projects. While carbon offsetting can have positive environmental impacts, it is frequently used as a diversionary tactic to shift attention away from the need to reduce actual emissions. Instead of making meaningful changes to their operations to cut down on carbon output, these companies often rely on offset projects to maintain the appearance of environmental responsibility. This approach allows them to continue with business-as-usual practices while projecting a green image, without addressing the root causes of their environmental footprint. In the long run, this undermines genuine sustainability efforts by focusing more on compensating for damage than preventing it.

Impact of Greenwashing on Sustainability and Consumer Trust

Greenwashing, the practice of making misleading claims about the environmental benefits of a product or company, is a growing concern in the global push for sustainability. However, the rise of greenwashing poses significant challenges for both consumers and the broader sustainability movement. This deceptive practice undermines genuine efforts to protect the environment, creates confusion for well-intentioned consumers, and can ultimately harm the reputation of companies when exposed.

Confusing Consumers: One of the most direct consequences of greenwashing is the confusion it creates for consumers who are genuinely trying to make environmentally responsible choices. Companies that engage in greenwashing often mislead the public about the sustainability of their products by using vague terms like " biodegradable “ “100% natural” or “chemical-free" without substantiating these claims with concrete evidence. This practice erodes consumer trust, making it difficult for individuals to distinguish between truly eco-friendly products and those that only appear to be. As a result, consumers may unknowingly support companies that are contributing to environmental degradation, undermining their efforts to live more sustainably. The complexity of identifying authentic sustainability claims can discourage consumers from engaging with the broader sustainability movement, reducing the demand for genuine environmentally conscious products.

Undermining Real Sustainability Efforts: Greenwashing not only misleads consumers but also undermines real sustainability efforts. Companies that invest in truly sustainable practices—such as reducing carbon emissions, conserving water, or using renewable energy—face unfair competition from businesses that falsely market themselves as eco-friendly. This creates an uneven playing field, where companies engaging in greenwashing can reap the financial benefits of appearing sustainable without making the investments necessary for genuine environmental improvements. As a result, companies that are committed to reducing environmental harm may find their efforts overshadowed by misleading claims from competitors. The proliferation of greenwashing diminishes the incentive for companies to adopt authentic sustainability measures, as the perceived value of true sustainability is diluted by the prevalence of deceptive practices.

Long-term Damage to Reputation: When greenwashing is exposed, the fallout for companies can be severe. Public trust, once broken, is difficult to rebuild, and the damage to a company's reputation can be long-lasting. High-profile greenwashing scandals, such as the Volkswagen "Clean Diesel" case, illustrate the profound impact that such deception can have. Similar instances of greenwashing can erode consumer confidence not only in the company involved but also in the broader corporate sector, where scepticism toward environmental claims can grow.

The regulatory bodies and watchdog organizations are increasingly imposing fines or penalties on companies found guilty of misleading environmental claims. In India, for example, the Advertising Standards Council of India (ASCI) has fined companies like Godrej and Hindustan Unilever for making false environmental claims about their products. These penalties, combined with the reputational damage that accompanies greenwashing exposure, underscore the risks companies take when they attempt to mislead consumers for short-term gains.

Addressing greenwashing is vital to ensuring the integrity of environmental progress and fostering a marketplace where sustainability is both authentic and impactful. Governments and regulatory bodies must establish clear guidelines for what constitutes a legitimate environmental claim, enforce strict standards for eco-labelling, and hold companies accountable for misleading practices.

At the same time, consumers have a responsibility to remain vigilant. As greenwashing tactics become more sophisticated, it is important for consumers to look beyond marketing slogans and investigate the actual sustainability practices of companies. By supporting businesses that are genuinely committed to environmental protection, consumers can help create a demand for authentic sustainability and discourage companies from engaging in deceptive practices.

Major Reported cases on Greenwashing

Several high-profile cases have brought the issue of greenwashing by major corporations into the spotlight. One of the most prominent examples is the 2015 Volkswagen "Clean Diesel" scandal.

In this case, Volkswagen was exposed for using sophisticated software in its diesel vehicles to manipulate emissions tests. While the cars were marketed as environmentally friendly and compliant with emissions standards, they were emitting up to 40 times the legal limit of harmful pollutants during real-world driving conditions. This deliberate deception allowed Volkswagen to falsely present its diesel cars as eco-friendly alternatives, boosting sales and consumer trust under the guise of sustainability. However, once the truth came to light, the company faced a barrage of legal consequences, including numerous lawsuits, regulatory scrutiny, and widespread public outrage.

In the United States, Volkswagen was forced to settle with the government, resulting in billions of dollars in fines, compensation, and vehicle buyback programs. The scandal not only damaged the company's reputation but also highlighted the broader issue of corporate dishonesty in environmental claims, reinforcing the need for stricter regulations and accountability to prevent such misleading practices.

In 2010, Tesco, a major UK supermarket chain, faced a fine of £300,000 from the Advertising Standards Authority (ASA) due to misleading advertising of its "Everyday Value" light bulbs. Tesco had marketed these bulbs as being carbon neutral and energy efficient. However, it was discovered that the bulbs did not live up to these claims. Despite the promotional assertions, the bulbs had a very short lifespan, lasting only a few months. This discrepancy between the advertised and actual performance of the product constituted a deceptive marketing practice, leading to the substantial fine from the ASA. The case highlighted the importance of accurate and truthful advertising, particularly regarding environmental claims, and underscored the need for companies to ensure that their products meet the standards they promote.

In 2010, KFC came under scrutiny for misleading advertising practices concerning its coffee. The company promoted its coffee as being Rainforest Alliance Certified, suggesting that it met rigorous environmental and sustainability standards. However, it was later revealed that only 10% of the coffee served at KFC was actually certified by the Rainforest Alliance. As a result of this misrepresentation, the Advertising Standards Authority (ASA) imposed a fine of £7,500 on KFC for the unauthorized use of the certification logo. This case underscored the importance of accurately representing product certifications and the potential legal consequences of misleading advertising.

More recently, in 2020, H&M faced a lawsuit from environmental organizations over its sustainability claims. The lawsuit alleged that despite H&M's extensive green marketing efforts, the company had made minimal progress toward its stated environmental goals. Critics argued that H&M's public commitment to sustainability was not matched by meaningful actions or improvements in its environmental practices. This legal challenge highlighted ongoing concerns about the authenticity of corporate sustainability claims and the need for greater transparency and accountability in environmental marketing.

Several cases of greenwashing have emerged in India, highlighting the legal consequences of misleading environmental claims.

In 2012, Godrej Industries faced a significant penalty from the Advertising Standards Council of India (ASCI) for misleading advertising related to its Good Knight Fast Card mosquito repellent. The company had advertised the product as “100% natural” and “chemical-free,” which implied that it was made entirely from natural ingredients without any synthetic chemicals. However, it was later found that the product did not meet these claims. As a result of this misrepresentation, Godrej Industries was fined Rs. 5 lakh by ASCI. This fine was imposed to address the deceptive marketing practices and to reinforce the need for accuracy in advertising claims, particularly concerning product ingredients and their supposed benefits. This case highlights the importance of ensuring that marketing communications are truthful and substantiated, especially when making claims about a product's natural or chemical-free attributes.

in 2011, Hindustan Unilever Limited (HUL) faced a Rs. 10 lakh fine from the Central Pollution Control Board for falsely claiming that its Surf Excel Easy Wash detergent was “100% natural” and “environment-friendly,” despite containing synthetic ingredients. Voltas Limited, a Tata Group company, was fined Rs. 50,000 by the ASCI in 2013 for falsely advertising its air conditioners as “eco-friendly” with a “5-star energy rating” when they had a lower rating.

In 2015, Godrej Consumer Products Limited was fined Rs. 15 lakh by the ASCI for misleading claims about its Godrej No. 1 soap, which was falsely marketed as “100% natural,” “biodegradable,” and “eco-friendly” despite containing synthetic ingredients. However, investigations revealed that the actual practices and investments did not fully align with the advertised sustainability claims. This discrepancy led to criticism from both consumers and regulatory bodies.

Nestlé India (2020) was criticized for its sustainability claims regarding its packaging. The company had advertised its packaging as eco-friendly and part of a broader sustainability initiative. However, environmental groups pointed out that the actual practices did not significantly reduce the company's overall environmental impact. Similarly, ITC Limited,(2022) a major Indian conglomerate, was called out for its "eco-friendly" packaging claims. The company promoted its packaging as being environmentally sustainable, yet reports indicated that a significant portion of its packaging still relied on non-recyclable materials. This led to questions about the company's commitment to true sustainability versus superficial claims.

Patanjali Ayurved (2021) faced allegations of greenwashing related to its natural and herbal product lines. The company advertised its products as "100% natural" and "chemical-free," but independent tests revealed that some products contained synthetic additives. The controversy highlighted the gap between marketing claims and product content.

The above cases highlight the increasing examination of environmental claims by companies and underscore the importance of transparent and truthful communication about sustainability efforts. As consumers become more discerning, companies will face greater accountability for misleading practices. Both regulatory bodies and consumers must insist on accountability and transparency to guard against deceptive greenwashing tactics.

Legal Framework to Curb Greenwashing in India

India has substantial legal framework to curb greenwashing and ensure accurate environmental claims by companies. The Bureau of Indian Standards (BIS) has developed IS/ISO 14024:1999, which sets criteria for eco-labeling and guidelines for environmental claims in advertising. The Ministry of Environment, Forest and Climate Change (MoEFCC) launched the Green Good Deeds movement, encouraging eco-friendly actions and providing guidelines for corporate environmental claims. The Environment Protection Act, 1986, enforces penalties for violating environmental regulations. The Advertising Standards Council of India (ASCI) mandates that environmental claims in advertising be specific, accurate, and not misleading. Initiatives like the Green Rating Project (GRP) by the Centre for Science and Environment (CSE) assess companies' environmental performance, while the Indian Green Building Council (IGBC) promotes sustainable building practices through its green building rating system. Additionally, the Securities and Exchange Board of India (SEBI) has introduced measures under the Listing Obligations and Disclosure Requirements (LODR) Regulations, enhancing transparency in the disclosure of environmental, social, and governance (ESG) information by listed companies.

Additionally, the Consumer Protection Act, 2019, which prohibits false and misleading advertisements, establishes a central consumer protection authority to oversee issues related to unfair trade practices, including deceptive environmental claims. Section 2(47) of the Act defines unfair trade practices as including false or misleading representations about the standard, quality, or grade of goods or services. Companies that engage in greenwashing can be held liable under this Act if they make false or misleading claims regarding the environmental benefits of their products or services. Affected consumers can file complaints with the relevant consumer dispute redressal commission to seek relief and compensation.

The Central Consumer Protection Authority (CCPA) has issued the 'Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022' with the aim of curbing misleading advertisements and safeguarding consumers from exploitation. These guidelines are designed to prevent consumers from being misled by unsubstantiated claims, exaggerated promises, misinformation, and false statements. Such advertisements infringe on consumers' rights, including the right to be informed, the right to choose, and the right to protection against potentially unsafe products and services. The guidelines also specify penalties for violations: manufacturers, advertisers, and endorsers may face fines of up to 10 lakh rupees for misleading advertisements, with penalties increasing to up to 50 lakh rupees for repeated offenses. The CCPA can also ban endorsers from participating in endorsements for up to 1 year, with possible extensions to 3 years for subsequent violations. (Guidelines can be viewed at: These guidelines may be called the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022)

The CCPA recognized the need for new guidelines specifically targeting misleading advertisements related to environmental claims.

Guidelines for Preventing the Menace of Greenwashing

To combat Greenwashing, the Department of Consumer Affairs (DoCA) formed a committee which hasproposed the Guidelines for the Prevention and Regulation of Greenwashing, 2024, released on February 20, 2024, seeking public feedback.

The draft guidelines define Greenwashing as "any deceptive or misleading practice involving the concealment, omission, or distortion of relevant information, including exaggerating, making vague or false environmental claims, and using misleading terms, symbols, or imagery to highlight positive environmental aspects while downplaying or hiding harmful attributes." These guidelines apply to all advertisements regardless of form, format or medium and to any service provider, product seller, advertiser, advertising agency, or endorser involved in promoting such goods or services. It stipulates the terms like "green," "eco-friendly," "eco-conscious," "cruelty-free" ‘clean', ‘good for the planet', ‘minimal impact', ‘carbon neutral', ‘sustainable', ‘organic', etc. unless substantiated with valid evidence. Imagery suggesting environmental benefits, like "good for skin and nature," is also banned unless accompanied by clear proof. The Guidelines require the following disclosures from companies making green claims:

a. All environmental claims in advertisements or communications must be fully disclosed, either directly or via technology such as QR codes or web links.

b. Avoid selectively presenting data to highlight environmental claims while obscuring negative aspects.

c. Clearly define the scope of environmental claims, specifying whether they pertain to products, manufacturing processes, packaging, product usage, disposal, services, or service provision processes.

d. All environmental claims must be supported by verifiable evidence.

e. Comparative environmental claims between products or services must be based on verifiable and relevant data.

f. Specific environmental claims must be substantiated with credible certifications, reliable scientific evidence, and independent third-party verification to ensure authenticity.

However, general claims about a company's sustainability practices are excluded, ensuring the guidelines target claims that influence consumer decisions.

The guidelines represent an important step in tackling deceptive environmental advertising by establishing clear standards for environmental claims as they aim to enhance transparency, accountability, and promote genuine sustainability efforts in the marketplace. However, it is crucial that they are implemented promptly to ensure their effectiveness.

Other Measures for Tackling Greenwashing

To effectively combat greenwashing, several measures can be adopted to empower consumers and enforce accountability. First, educating consumers on recognizing misleading environmental claims is crucial. Public awareness campaigns, consumer protection organizations, and educational resources can enhance understanding of sustainable practices and certifications. Governments should also implement stricter regulations on eco-friendly labeling and certification, ensuring transparency and accuracy through standardized processes. Independent third-party verification by certifying bodies can further substantiate the sustainability of products and services. Strengthening consumer protection laws to include anti-greenwashing provisions, along with imposing penalties for companies guilty of deceptive claims, can serve as a deterrent. Lastly, fostering collaboration among government agencies, consumer organizations, and industry associations can encourage responsible advertising and establish industry-wide standards for environmental claims, reducing the prevalence of greenwashing.

The way forward

Addressing greenwashing requires a unified effort from consumers, regulatory bodies, and companies. Educating consumers is crucial; by learning to identify greenwashing tactics and scrutinizing companies' actual practices, they can avoid falling for misleading claims.

Greenwashing poses a major barrier to achieving true sustainability, eroding consumer trust and undermining the efforts of genuinely committed companies. In India, the regulatory framework, including the Consumer Protection Act, 2019, and the upcoming Guidelines for the Prevention and Regulation of Greenwashing, 2024, provides a robust basis for tackling this challenge. The effectiveness of these measures depends on rigorous enforcement, ongoing consumer education, and a shared commitment to transparency and accountability. Only through a combined effort of regulators, businesses and consumers can we create a marketplace where sustainability claims are authentic and impactful, leading to genuine environmental progress.

[The views expressed are strictly personal.]