Annany Mamgain
Greenwashing is one of the hidden yet common deceptive practices often employed by companies wherein they exaggerate or misrepresent their environmental commitments. They mostly do this to attract a new demographic of eco-conscious consumers towards their products. This has become a relevant phenomenon that requires urgent attention in today’s ecological discourse, particularly because the demand for sustainable products is dramatically rising across industries these days.
In India, greenwashing isn’t a hidden problem anymore and has already penetrated many different sectors. This is especially true in the energy industry where misleading claims about renewable energy sources and eco-friendly practices are much like a plague at the moment.
Did you know a staggering 60% of Indian consumers have reported encountering instances of greenwashing
This diminishes the urgent need for heightened awareness among both consumers and businesses these days (Mongabay, 2024). As a lawyer deeply invested in the renewable energy sector, I am enraged by these deceitful practices as they not only confuse consumers but also sabotage genuine sustainability efforts, which is the need of the hour.
Before we deep dive into greenwashing, here are some other terms loosely associated with the same meanings of greenwashing– Greenhushing, Greenlighting, Greenshifting, Greenrinsing, Greencrowding, and Greenlabeling, as you can see from the infographic below.
Infographic Attributed to: Visionas
Understanding Greenwashing: Types and Tactics
Greenwashing is an umbrella term for a wide range of deceptive practices that many companies are using nowadays to rehash themselves as environmentally friendly or forward than they actually are.
Below is a detailed brief of the primary types of greenwashing, including specific tactics employed by corporations that I’ve come to know:
● Vague Claims
If you notice companies using ambiguous terms like ‘eco-friendly,’ ‘organic,’ or ‘natural’ without any detailed evidence upon further research to support their claims, they might be involved in greenwashing too.
● Misleading Labels
Some products may feature logos or certifications that imply they’re sustainable but without showing any evidence or verification about the same from any reputable third-party organizations. This is often a red flag of another greenwasher.
This tactic creates a false sense of security for consumers who trust these labels.
● Hidden Trade-offs
Some greenwashing corporations may even highlight just one sustainable aspect of a product to claim the eco-conscious title, all the while ignoring other significant environmental impacts of their products. This is how they set a misleading narrative around their brand. For example, a product may be marketed as recyclable or green, but its production process may be highly pollutive or unchecked.
● Making False Claims
This kind of straightforward type of greenwashing involves outright lies about a product’s environmental benefits. Some may claim they’re ‘carbon-neutral’ without any evidence, stats, or basis of the same.
● Irrelevant Environmental Claims
Sometimes, companies make grossly irrelevant claims that, while they may even be true, but in fact, are irrelevant or unrelated to the decision-making processes of their customers. One such instance is claiming that a product is ‘CFC-free’ when we know that CFCs are already banned by law, which does not shed light on its environmental impact.
● Lack of Proof
Companies also make environmental claims in their advertising material without providing clear or compelling evidence. For example, a product made from recycled materials may claim to be eco-conscious, but you may not find any supporting documentation that falls into this category.
● Comparisons with Less Eco-Friendly Alternatives
Some companies even claim their products are ‘greener’ by simply comparing them to less sustainable competitors or options. While this may make them look eco-conscious, it doesn’t substantiate their claims of being environmentally friendly on a closer look.
● Misleading Visuals or Graphics
Another crooked tactic that big corporations use is nature-based imagery in their marketing. It often creates a false impression of a product’s environmental benefits, even if their products end up harming the environment.
● Fake Certifications
Some brands may even imply that they hold valid third-party certifications when they actually don’t by using dishonest labels. This is a very rampant tactic used by small businesses to mislead consumers about their environmental credentials.
The interesting thing is these tactics not only mislead consumers but also undermine the genuine efforts of sustainability that are taking place within industries with an aim for real change (Energy Tracker Asia, 2024; KnowESG, 2023).
Legal Framework Preventing Greenwashing in India’s Energy Sector
In India, greenwashing is finally getting the concern and scrutiny it requires. Many people don’t know this, but there are already many legal structures in our country that are aimed at cutting down these deceptive and unfair practices.
Let me briefly touch on some of them below:
1. Consumer Protection Act, 2019
This is one of the best legal shields for consumers, perfect against unfair trade practices, including false claims of products, services, and brands. Once you file a case, the Central Consumer Protection Authority (CCPA) investigates the matter and penalizes brands if they come under misleading environmental claims.
Moreover, the recent draft guidelines also specify that terms like ‘eco-friendly’ and ‘green’ must provide mandatory evidence, such as certification and scientific evidence that is clear and verifiable (Mongabay, 2024; Outlook Business, 2024). (Ijalr, 2024).
Fun Fact: This type of act has also led to penalties for non-compliance, such as up to INR 10 lakhs and even 2 years imprisonment, particularly for repeat offenders.
2. The Bureau of Indian Standards (BIS)
BIS is the main authority that sets standards as well as substantiates claims regarding eco-labeling products and services. Under this comes the Standards of Weights and Measures Act 1976, as well as the Legal Metrology Act 2009. These regulations regulate the labels and claims in the energy sector, which helps to ensure firms abide by the compliance of established standards (Mongabay, 2024).
3. Competition Act, 2002
The Competition Commission of India (CCI) is yet another important authority that’s capable of intervening whenever greenwashing tactics are done by companies to gain the upper hand over their competitors.
4. Environment (Protection) Act, 1986
This is one of the earliest acts that has been helping against the greenwashing battle going on for ages. It helps the Government of India penalize companies that engage in business practices that harm the government more than help it. It’s primarily used to penalize companies that use false claims when it comes to their eco-conscious nature of products and services.
5. Corporate Social Responsibility (CSR) Regulations
Under the Companies Act 2013, brands and firms must regularly engage in CSR activities aimed at eco-conscious initiatives. And if any of these companies are found to misrepresent their contributions, heavy legal liabilities and consequences ensue.
6. Advertising Standards Council of India (ASCI) Guidelines
ASCI has also been running the battle against greenwashing by creating guidelines that help to identify and penalize any misleading claims that often thrive in the eco-conscious claims of big and small-sized businesses. Moreover, their recent amendments have added something better– advertisers must now provide proof to establish the truth of their eco-conscious claims (Outlook Business, 2024).
7. Securities and Exchange Board of India (SEBI)
Listed companies must also disclose their performance when it comes to ESG or environmental, social, and governance. And this includes their disclosure norms heavy on penalties against misleading investors. Last year (February 2023), SEBI even authorized a regulatory framework for ESG rating providers, especially regarding compliance with green investments. (Outlook Business, 2024).
8. National Green Tribunal (NGT)
NGT is the primary body for resolving disputes regarding issues related to the environment. They’re also endowed to take legal action against companies if their greenwashing practices contribute to environmental harm.
9. Trade Marks Act, 1999
Many don’t know this, but the Trademarks Act is very strict about ‘trademarks with solely green words’ unless they’re evidenced with substantial proof. That being said, oversights have led to misleading labels in registrations. (Outlook Business, 2024).
These developments point to a growing commitment in India to create a thriving environment for upcoming brands, products, and services rooted in transparency and accountability in environmental claims, all the while guarding consumers against dishonest practices.
Consequences of Greenwashing
- Loss of Consumer Trust: Untrustworthy techniques like greenwashing can confuse customers and lead to decision paralysis.
- Legal Actions and Penalties: Failure to comply might lead to heavy fines and imprisonment, especially when it comes to misleading claims.
- Negative Environmental Impact: Many greenwashing tactics are accused of misleading customers by promoting the consumption of environmentally harmful products that end up worsening the environment around us.
- Short-term financial gains: Companies might get quick profits through deceptive marketing, but these gains are often short-lived as they’re unsustainable and, more often than not, lead to long-term losses.
- Choking Innovation and Progress: Focusing on misleading claims can many a times prevent companies from investing in genuinely sustainable innovations, preventing overall progress in preserving the resources around us.
- Misallocation of Investment Resources: Greenwashing diverts funds from truly sustainable initiatives, undermining effective capital allocation in environmental efforts.
- Reputational Damage: Once exposed, greenwashing can severely damage a company’s reputation, leading to viral consumer boycotts and drastic loss of their market share.
- Financial Implications: The costs associated with the penalties, legal actions, and the loss of consumer trust exceed any short-term economic benefits gained from greenwashing.
Conclusion: The Path Forward
The fight against greenwashing isn’t an easy one, but it can be easy if there’s a premise for collective action from consumers, businesses, and regulators. How? One way we can do this is by increasing awareness and education about fraudulent practices like greenwashing, which are explained above. This will also help to preserve the environment and build a transparent, environmentally safe marketplace for everyone.
Together, we can steer the renewable energy industry toward genuine sustainability that protects our planet’s future.
References
- Mongabay (2024). Green or gimmick? Guidelines aim to regulate misleading environmental claims. Retrieved from Mongabay.
- Achilles (2024). Strategies to Prevent Greenwashing in the Energy Sector. Retrieved from Achilles.
- Drishti IAS (2024). Guidelines to Combat Greenwashing. Retrieved from Drishti IAS
- Permutable AI (2024). Greenwashing Examples in the Energy Sector – Permutable AI. Retrieved from Permutable AI.
- Ijalr.in (2024). The Regulatory Landscape of Greenwashing in India: A Legal Perspective. Retrieved from Ijalr.
- Outlook Business (2024). ASCI Moves To Curb Greenwashing With New Guidelines. Retrieved from Outlook Business.
GIPHY App Key not set. Please check settings