Draft Guidelines to Tackle ‘Greenwashing’

Context: 

The Central Consumer Protection Authority has recently sought public comments on Draft Guidelines for the Prevention and Regulation of Greenwashing.

About Greenwashing

• Term Coined by: by Environmentalist Jay Westerveld in 1980’s.

Greenwashing: Definition (According to Draft Guidelines)

• Greenwashing as “any deceptive or misleading practice, which includes concealing, omitting, or hiding relevant information, by exaggerating, making vague, false, or unsubstantiated environmental claims and use of misleading words, symbols, or imagery, placing emphasis on positive environmental aspects while downplaying or concealing harmful attributes”.

About Draft Guidelines

• Objective: To Ensure consumers get the right information for making a conscious decision rather than blindly relying on the claims
• Applicable to: All advertisements & Service providers, product seller, advertiser, or an advertising agency/ endorser whose service is availed for the advertisement of such goods or services. 

• Disclosures to Be Made by the Company Making Green Claims 

• • Claims in Ads: Ensure all environmental claims in ads or communications are fully disclosed, either directly or through technology like QR codes or web links. 
  • Avoid Selective Presentation: To favorably highlight environmental claims while hiding unfavorable aspects. 
  • Scope Definition or Terms: Clearly define the scope of environmental claims, specifying whether they relate to products, manufacturing processes, packaging, product usage, disposal, services, or service provision processes. 
    • Use of Specific Terms with Adequate Disclosures:  It  also provides vague terms such as ‘green’, ‘eco-friendly’, ‘eco-consciousness’, ‘good for the planet’, ‘cruelty-free’, and similar assertions to be used only with adequate disclosures.
  • Verifiable Evidence: All environmental claims shall be backed by verifiable evidence. 
  • Verified Comparative claims: Compare one product or service to another must be based on verifiable and relevant data. 
  • Substantiation with Certification: Substantiate specific environmental claims with credible certification, reliable scientific evidence, and independent third-party verification for authenticity.

Initiative Related to Greenwashing 

At Global Level:  

• Policy of zero tolerance towards greenwashing, urging private corporations to rectify their practices by the United Nations Secretary-General at COP27.
•  Rectification of World’s inaugural green bond standards as a measure to combat greenwashing by the EU.
• Consistent sustainability and climate standards : By International Sustainability Standards Board (ISSB) for global corporate adherence, commencing in 2024.

At National Level:

• Classified as an unfair trade practice under the Consumer Protection Act of 2019 in India.
• SEBI Directives for issuers of green debt securities, aiming to ensure transparency and prevent greenwashing. 
• SEBI’s Business Responsibility and Sustainability Reporting (BRSR) Norms have been introduced to regulate corporate reporting practices in relation to sustainability. 
• Participation in the Greenwashing TechSprint by RBI : organised by the Global Financial Innovation Network (GFIN).
• A 9-point draft of guidelines by The Advertising Standards Council of India (ASCI) : aimed at addressing “greenwashing” practised by companies.

Concerns Regarding GreenWashing

• Concerns with respect to Climate Goals: Misleading or exaggerated information about environmental initiatives could dilute the authenticity of climate goals. 
• Undeserved Recognition creates Market Distortion:  Entities engaging in deceptive practices may gain an unfair advantage over those adhering to genuine environmental standards. 
• Challenges to Carbon Credit Systems: Expansion of credit sources and certification by unofficial entities raises concerns about transparency and reliability.

News Source: AIR

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