India is now issuing guidelines requiring companies to substantiate eco-friendly claims. Those who advertise environmental benefits to boost sales must be transparent, or they can face penalties or even jail time, as Mint reported via MSN.
"All environmental claims must be supported by accessible, verifiable evidence from independent studies or third-party certifications," said India's consumer affairs secretary Nidhi Khare, who announced the new guidelines, per the MSN post.
This comes at a time of growing concerns about greenwashing. A study from September 2022 to September 2023 revealed one in every four climate-related environmental, social, and governance risk incidents linked to greenwashing. The report said that misleading communications created risks "for companies, employees, and communities."
India's Central Consumer Protection Authority explained in a press release that the new guidelines are not meant to stifle companies' environmental efforts but to ensure that the claims are being made with integrity.
"By mandating that companies substantiate their environmental assertions, the guidelines seek to foster a marketplace where environmental claims are both truthful and meaningful, thus enhancing consumer trust and encouraging sustainable business practices," the CCPA stated in the release.
The new guidelines aim to bar a trend for companies to exploit consumers' growing environmental sensitivity. ESGDive reported that the study said 54% of companies analyzed — in Asia, Europe, and North America — are greenwashing their records on carbon pollution, general pollution, and issues related to rising global temperatures. The new guidance could push companies to reduce the negative impacts they have on Earth's overheating.
Recent reports by the BBC and others of extremely toxic air and severe pollution in India prompt why the guidelines will likely impact India's population. Beyond India, a growing number of governments implementing greenwashing policies could continue to mitigate harmful environmental practices effectively.Â
Companies have been using greenwashing strategies to gain a competitive advantage, yet the negative economic impacts far outweigh the potential boost in sales. Cleanhub suggested that greenwashing has cost companies millions of dollars, a figure that only grows when accounting for the consumers' loss of trust. Greenly reported that consumers are encouraging brand transparency and that "trying to fool them could be extremely costly."
Recent financial hits or lawsuits for greenwashing have harmed Chevron, Kohl's, and H&M.
Federal and State laws in the United States are in place to inhibit greenwashing. With more countries producing these laws, the financial and environmental benefits to consumers and business owners will grow.Â
In the U.S., for business owners, the economic benefits of championing sustainability could add significantly to their income, with the potential for tax benefits in the thousands. Forgoing greenwashing to facilitate verifiably sustainable practices is ultimately beneficial all around.
Per the MSN post, Karun Mehta, a partner of Khaitan & Co law firm, spoke on the new India guidelines as providing a welcome step that promotes "responsible advertising with accuracy, transparency, and accountability."
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