ASCI Moves To Curb Greenwashing With New Guidelines

The rise of greenwashing has prompted ASCI and the government to propose strict guidelines for transparent and accurate eco-friendly product advertising
ASCI Moves To Curb Greenwashing With New Guidelines

Are green products truly green? As environmental consciousness increases, so does the appeal of ‘green’ marketing, with products often sporting labels like “eco-friendly,” “sustainable,” or “green.” But how many of these claims are accurate? The proliferation of green products and the growing number of environmentally conscious consumers have led to greenwashing--a dubious practice where companies falsely claim that their products are environmentally friendly.

The Advertising Standards Council of India (ASCI) acted against 116 advertisements in 2021 for potential violation of its greenwashing guidelines. Those guidelines have become more stringent since February this year, when the ASCI issued its new guidelines. Simultaneously, the Indian government released draft guidelines for the prevention and regulation of greenwashing, recommending that ambiguous expressions like ‘green’, ‘eco-friendly’, ‘eco-consciousness’, ‘good for the planet’, ‘cruelty-free’, and similar assertions can be made only with adequate disclosures.

The guidelines also state that advertisers must clearly state whether an environmental claim relates to the entire product, just its packaging, or the service being offered. They focus on ensuring that advertising restricts itself to claims supported by reliable scientific evidence or credible certifications from qualified bodies and does not overclaim the extent of the greenness of products to protect customers from being misled.

When making carbon offset claims, advertisers must disclose if emissions reductions will occur within two years or more in the future. Ads should not suggest emissions reductions that are legally required as if they were voluntary. Green claims should consider the full life cycle of the product or service to avoid misleading consumers about its overall environmental impact.

A study by ASCI reported that 79 percent of green claims made by organisations were exaggerated or misleading. According to a YouGov market research study, 71 percent of Indian consumers reported incidents of greenwashing, with 60 percent expressing concern. Furthermore, only 29 percent of consumers reported trusting organisations’ environmental claims.

India’s Central Consumer Protection Authority (CCPA) issued draft guidelines in February to combat fallacious environmental claims. The guidelines aim to prevent greenwashing and require truthful, accurate, and verifiable environmental claims backed by evidence. Advertisements must avoid vague language and provide clear comparisons. Any environmental endorsements must be substantiated by credible sources, and generic claims must be accompanied by qualifiers and substantiation.

The draft guidelines, once approved, will be applicable to all advertisements, service providers, product sellers, advertisers, advertising agencies, or endorsers who are involved in the promotion of such goods or services.

The guidelines won't apply to general advertisements. Companies can mention sustainability principles in their mission statement but can't claim all products are "manufactured sustainably" without evidence. Once formalised, the greenwashing guidelines will fall under the Consumer Protection Act of 2019. False environmental claims are illegal under this Act, and businesses found making them can be held accountable. Consumers impacted by such claims have the right to complain to consumer courts for justice and compensation.

The government's draft guidelines on greenwashing align with ASCI's guidelines. Non-compliant advertisements can be reported to the Central Consumer Protection Authority (CCPA) for action under the Consumer Protection Act 2019. The CCPA has recognised that violations of ASCI's code regarding misleading advertisements may breach the Consumer Protection Act of 2019. Green guidelines around the world.

According to a 2021 survey by Ipsos, 64 percent of Indian consumers believe that stricter laws and regulations are needed to ensure companies make genuine environmental claims. Singhal of CSSA conducted a study on greenwashing awareness among Indian consumers and its impact on consumption. She emphasises the crucial role of consumer education, highlighting that many advertisements in India promote a superficial green image of organisations without substantial evidence. She advocates for nationwide initiatives to educate the public about greenwashing and equip them with tools to identify false claims.

In 2022, the European Union introduced the Directive Empowering Consumers for the Green Transition, which aims to combat greenwashing by ensuring that environmental claims about products are verifiable and prohibiting vague ecological assertions.

In the United States, guidelines established through the Federal Trade Commission’s Guides for the Use of Environmental Marketing Claims caution marketers against making broad, unqualified claims such as “environmentally friendly” or “eco-friendly” and clarify that degradable products must decompose within a year after disposal unless they meet strict criteria.

Singhal, while highlighting the importance of India’s efforts to bring in similar greenwashing guidelines, states that there is still scope for India to enhance its transparency and enforcement strategies.

Ensuring compliance with guidelines to combat greenwashing involves various stakeholders, from corporate sectors to regulatory bodies and consumers. Vetriselvan from the environmental organisation Poovulagin Nanbargal emphasises the need for robust enforcement and adherence to these guidelines. The legal framework in India, including the Consumer Protection Act of 2019 and the Bureau of Indian Standards, plays a pivotal role in preventing greenwashing. In addition, SEBI released guidelines for issuers of green debt securities in February 2023, emphasising the importance of ongoing monitoring and strict compliance.

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