Greater awareness amongst consumers of the environmental impact of goods and services they consume has made a focus on Environmental, Social and Governance (“ESG“) principles unavoidable for businesses.
The significance of ecological sustainability to consumers has led to corresponding concerns relating to “greenwashing”, and over the veracity of the claims made by corporations in respect of the goods and/or services that they provide. This phenomenon has the potential to undermine the credibility of genuine sustainability efforts and eroding consumer trust in businesses.
Recognizing the need for clear guidelines and enforceable measures to prevent and regulate greenwashing, the Central Consumer Protection Authority (“CCPA“), India’s primary regulatory body tasked with protecting the rights of Indian consumers issued the Guidelines for Prevention and Regulation of Greenwashing and Misleading Environmental Claims (“Guidelines“), which were first released as a draft for seeking public comments on 20 February 2024 and officially notified on 15 October 2024. The Guidelines have been notified under India’s primary consumer protection law, the Consumer Protection Act, 2019 (“CPA“).
The Guidelines aim to ensure that companies provide accurate, transparent, and substantive information about the environmental impact and sustainability of their products or operations.
Why were the Guidelines needed?
The introduction of the Guidelines was necessary to address several key issues:
1. Misleading consumers through Greenwashing
As Indian consumers become more conscious of the environmental impact of the goods and services they consume, this has increasingly started affecting their buying decisions, leading to manufacturers and service providers consequentially highlighting the potentially misleading positive impact of their goods and services on the environment. Often these product claims prove to be vague or unverifiable with businesses labelling their products as “green”, “organic”, “biodegradable”, or “carbon neutral” without substantive proof.
