19-October-2024-Editorial

GREENWASHING AND CONSUMER PROTECTION

The Central Consumer Protection Authority (CCPA) recently released guidelines aimed at regulating “greenwashing” or misleading environmental claims by companies.

These guidelines seek to foster transparency in eco-friendly marketing and protect consumers from deceptive practices.

What is Greenwashing?

Greenwashing is the practice where companies exaggerate or falsely claim environmental benefits for their products or services to appear more eco-friendly than they are.

• Origin: The term was first used in 1986 by environmentalist Jay Westerveld.
• Methods: This can involve using misleading symbols, phrases, or visuals that focus on minor positive aspects while hiding harmful impacts.
• Exemptions: Excludes obvious exaggerations, hyperboles, or neutral color schemes that do not mislead consumers.

CCPA’s Role and Functions

• Establishment: Created under the Consumer Protection Act, 2019.
• Purpose: Protects consumer rights, regulates unfair trade practices, and addresses misleading advertisements.
• Oversight: Operates under the Ministry of Consumer Affairs, Food and Public Distribution.

About Greenwashing Guidelines

Objective

• Aim to combat misleading environmental claims, ensuring that products advertised as “eco-friendly” genuinely offer environmental benefits.

Applicability

• Applies to manufacturers, service providers, traders, advertisers, and endorsers.
• Requires these entities to validate terms like “eco-friendly,” “green,” or “sustainable” with reliable evidence.

Verification and Disclosure

• Companies must use independent studies, third-party certifications, or scientific data to support environmental claims.
• Claims should specify which part of the product is environmentally beneficial (e.g., packaging, production) and be accessible through QR codes, URLs, or straightforward communication.

Penalties for Misleading Claims

• Companies found making false claims can face penalties for misleading advertisements and unfair practices under consumer protection laws.
• Future-oriented claims (e.g., goals to reduce carbon emissions) must have transparent, actionable plans to back them up.

Specific Environmental Claims

• Terms like “compostable,” “plastic-free,” and “recyclable” require scientific evidence or third-party validation for credibility.

Consumer-Friendly Language

• Technical terms such as “greenhouse gas emissions” or “Environmental Impact Assessments (EIA)” should be simplified for consumer understanding.

Factors Driving Greenwashing in India

• Growing Consumer Awareness: Rising environmental awareness among consumers leads to a greater demand for eco-friendly products.
• Regulatory Pressure: Policies like Extended Producer Responsibility (EPR) create pressures on companies to appear environmentally responsible.
• CSR Requirements: The Companies Act, 2013, mandates a 2% CSR spending requirement, leading some companies to overstate their environmental efforts.
• Media and NGO Oversight: Investigative journalism and NGO activism expose greenwashing practices, pushing companies towards greater accountability.
• Consumer Skepticism: Frequent greenwashing has led consumers to distrust environmental claims, increasing demand for third-party certification.

International Efforts Against Greenwashing

• UN Initiatives: At COP27, the UN Secretary-General advocated for zero tolerance toward greenwashing.
• EU Green Bond Standards: The European Union introduced new standards in 2023 to counter greenwashing in the financial sector, promoting transparency and climate-friendly investments.

Concerns with Greenwashing

• Undermining Climate Goals: Misleading claims weaken the credibility of genuine environmental efforts.
• Market Distortion: Greenwashing creates an uneven playing field, disadvantaging genuinely sustainable companies.
• Weak Regulations: Insufficient regulations for environmental claims allow greenwashing to persist.
• Carbon Credit Integrity: False claims compromise the reliability of carbon credit systems, especially in unregulated markets.

Way Forward

• Accountability: Companies should be transparent about their environmental practices, challenges, and impact.
• Support for Verified Green Initiatives: Consumers are encouraged to support brands with a track record of sustainable practices.
• Stricter Regulations: Implement more comprehensive standards for environmental claims to enhance transparency and ensure accountability.