Genuinely Green? Tightening the Noose on Environmental Claims in Advertising

Do you want to market your products or services as “eco-friendly”? Have you come across products branded as “sustainable”, “carbon clean”, “net zero”, “renewable”, “recyclable”, “plastic-free”, “100% natural”, “climate positive”, etc.? Have you ever questioned the legality of making such “green” claims or pondered over how or what can be said, when making any environment-friendly claims?

The Consumer Ministry has the answers.

The Central Consumer Protection Authority (CCPA) issued the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 (Guidelines)¹ on 15-10-2024.

The Guidelines were issued to ensure that environmental claims made in advertisements are kosher and do not mislead consumers or amount to greenwashing.² Advertisements, as per the CCPA, are broad enough to include any publicity, representation, endorsement, or pronouncement made in audio, and/or visual form across any medium.³ Hence, the Guidelines would cover any content, including marketing material, press releases, etc., released by a company with respect to a product or service. For this, the CCPA has placed liability and accountability on the manufacturers, service providers, traders, advertisers, and endorsers of goods, products, and services who make such environmental claims.

In this article, we will examine some key provisions of the Guidelines and lay out the dos and don’ts for making environmental claims in advertising.

What are environmental claims?

The Guidelines define “environmental claims” as representation in any form that:⁴

(a) suggests environmentally friendly attributes;

(b) which are aimed to convey a sense of environmental responsibility; and

(c) regarding goods (in entirety or as a component), manufacturing processes, packaging, manner of use or disposal of goods, services (or any part of the service), or the process involved in providing the service.

What is greenwashing?

“Greenwashing” has been defined as⁵:

(i) any deceptive or misleading practice by exaggerating, making vague, false or unsubstantiated environmental claims (example: Stating that the carbon footprint of a product is 80% lower than that of chemical equivalents without providing any data to back such a claim⁶); or

(ii) the use of misleading or deceptive words, symbols, imagery, etc. highlighting positive environmental aspects while downplaying/concealing the harmful attributes (example: Highlighting the battery is eco-friendly without stating that the process to prepare the battery is not).

However, the following practices are not greenwashing:⁷

(i) use of obvious hyperboles or puffery (example: “Experience the ultimate driving experience with our electric vehicle (EV) cars”); or

(ii) use of generic colour schemes or pictures that are not misleading or deceptive (example: Merely using a green colour scheme in the branding or advertisements for goods/services in a manner that does not reflect on the environmental attributes of such goods/services may not constitute greenwashing); or

(iii) company mission statement that is not specific to a product or service (example: XYZ entity in its mission statement highlights that “its growth will be based on sustainable principles”. However, if the entity further states that “its products are manufactured in a sustainable manner”, it will need to provide data to substantiate the environmental claim about the product).

Applicability:

The Guidelines apply to:

(i) all Environmental Claims;

(ii) any manufacturer, service provider, or trader whose goods, products, or services are the subject of an advertisement; or

(iii) advertising agencies⁸ (e.g. any person or entity who designs or produces advertisements) or endorsers (e.g. actors or influencers or specialists in a specific field) whose services are availed for the advertisement of such goods, products and/or services.⁹

The do’s and don’ts:

Don’ts:

(i) Engage in greenwashing and misleading environmental claims.¹⁰

(ii) Selectively present research to highlight favourable findings and conceal unfavourable ones¹¹ (example: A “biodegradable” claim highlighting that research concluded that the product is made of biodegradable material while concealing the finding that such material may take up to 10 years to decompose.).

(iii) Make disclosures that are contradictory to the environmental claim.¹² (Example: Research reports/certificates disclosed to substantiate a claim that a product is energy efficient shall not contain observations that are contradictory to such claim.)

Do’s:

(i) Provide substantiation of environmental claims:

(a) Advertisements using generic terms like “clean”, “green”, “eco-friendly”, “cruelty free”, “organic”, etc., should have adequate, accurate and accessible qualifiers and substantiation.¹³ (Example: “Go green with our product!”. This claim is unclear as it does not clarify what the word “green” conveys. Thus, adequate qualifiers in the form of what is green and substantiation in the form of certificates from labs, etc. would need to be provided.)

(b) All environmental claims should be supported by “accessible verifiable evidence” based on independent studies or third-party certifications.¹⁴ (Example: A product labelled as “certified organic” should be supported by a certificate from a recognised organic certifying body.)

(c) Aspirational claims must be backed by clear and actionable plans to achieve them.¹⁵ (Example: A forward-looking claim stating “we will use at least 50% recycled material in our packaging by 2030” should be backed by actionable plans explaining how the company proposes to achieve them.¹⁶)

(ii) Provide adequate disclosures: The Guidelines also require advertisements to carry adequate disclosures regarding any environmental claims made in the advertisement. What amounts to “adequate disclosure” has not been defined or crystallised, however, the Guidelines require:

(a) Advertisements to provide all material information relating to any environmental claim in the advertisement itself or by inserting a quick response (QR) code or uniform resource locator (URL) (or similar technology)¹⁷ (example: An advertisement stating the product is “recommended by leading environmental experts!”, should provide a QR code or link in the advertisement itself which can direct the consumer to an affidavit or such document proving that leading environmental experts have recommended the product.)

(b) Specific claims, like “non-toxic”, “100% natural”, “recyclable”, etc., to be supported by credible certification, reliable scientific evidence, statutory or independent third-party verification, etc.¹⁸ (Example: A claim that a sanitary napkin is “compostable and biodegradable”, will need to be backed by appropriate certificates issued by relevant Government or certification bodies.¹⁹)

(iii) Disclosures to be absolute, accessible and relevant:

(a) Advertisements should specify which aspects the environmental claim refers to i.e. the service or the goods (or any part of it) or the process or packaging, etc.²⁰ (Example: A plastic package containing a shower curtain is labelled “recyclable”. This claim will need to clarify whether the package or the curtain or both are recyclable.)

(b) Advertisements should make disclosures in an accessible manner.²¹ (Example: Disclosures should also be made accessible through audio for people with visual impairment.)

(c) Technical terms should be explained using consumer-friendly language.²² (Example: An advertisement making a “net-zero emissions” claim should explain that emissions released through the activities of manufacturing its products are counterbalanced by its carbon-removal activities.)

(iv) Fair and meaningful comparisons: For comparative claims, the advertisements should specify which aspects are being compared and support the same with verifiable and relevant data.²³ (Example: “Our product is greener than the competition”. In such an environmental claim, the advertisement should specify the details about the environmental attributes being compared.)

Consequences of non-compliance:

The consequences of misleading advertisements under the CPA can be varied. These can range from a direction to issue a corrective advertisement or cease and desist from issuing misleading advertisements to hefty penalties or imprisonment in some cases.²⁴

A step too far?

While the Guidelines prescribe a robust framework to address greenwashing, the vastness of the obligations may be a cause of concern to advertisers. The Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (Misleading Advertisement Guidelines) already prescribe various obligations that may address concerns and compliances required to be fulfilled in the Guidelines. The Guidelines, however, take a step forward and impose certain additional positive obligations on advertisers. Some of which are as follows:

Sl. No.	Obligation	Misleading Advertisement Guidelines	Guidelines	Comments
1.	Substantiation of claims	Claims which relate to objectively ascertainable facts should be capable of substantiation, and such substantiation shall be produced, if required by the CCPA.25	All environmental claims should be supported by “accessible verifiable evidence” based on independent studies or third-party certifications.26	The Guidelines impose positive obligation to support “all environmental claims” with evidence. Further, such evidence shall be accessible and verifiable.
2.	Disclosures	Where claims are stated to be based on/supported by research or assessments, the source and date of such research or assessments shall be indicated in the advertisement.27	Advertisements are to provide all material information relating to any environmental claim in the advertisement itself or by inserting a QR code or URL (or similar technology).28	The Guidelines impose an additional obligation to disclose material information with the advertisement itself or through QR codes, etc.
3.	Disclaimers	Disclaimers should not contradict the material claim in an advertisement,29 or hide material information with respect to a claim.	Make disclosures that are contradictory to the environmental claim.30	The Misleading Advertisement Guidelines already address concerns in relation to contradictory disclosures.

Therefore, the Guidelines go above and beyond the Misleading Advertisement Guidelines to impose additional compliances. such obligations may result in higher compliance costs for brands or even expose the brands to potential litigation.

Key takeaways

The regulatory framework for green claims has seen significant developments over the last year.

While regulators like the Securities and Exchange Board of India, Reserve Bank of India, and self-regulatory bodies like Advertising Standards Council of India took cognizance of greenwashing practices and issued appropriate guidelines earlier [discussed in detail here] this move by the CCPA has crystallised the prohibition of greenwashing practices under the framework of consumer law.

The Guidelines are a concrete step forward by the Government towards ensuring environmental integrity in corporate practices to protect consumer interest. Such regulatory clarity on broad obligations, along with effective implementation, may strike a balance between the industry’s compliance concerns and the protection of consumer interests. Given that the Guidelines are now in force, entities engaged in advertisements making environmental claims will be required to take note of the new regime and align their advertising practices accordingly.