The Central Consumer Protection Authority (CCPA) has issued guidelines for prevention and regulation of greenwashing and misleading environmental claims, and aims to protect consumers and promote transparency in eco-friendly marketing.

What is greenwashing?

• “Greenwashing” refers to claims by companies about any product or service having climate-friendly impact.

• Some companies give a false impression of their environmental impact or benefits. 

• Greenwashing is the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical.

• It is the use of misleading words, symbols, or imagery, placing emphasis on positive environmental aspects while downplaying or concealing harmful attributes. 

• Greenwashing misleads market actors and does not give due advantage to those companies that are making the effort to green their products and activities. It ultimately leads to a less green economy.

• It will undermine the efforts of genuine leaders, creating both confusion, cynicism and a failure to deliver urgent climate action. 

Key points of the guidelines:

• The new guidelines aim to ensure that eco-friendly assertions are backed by verifiable evidence and clear disclosures.

• The guidelines do not prohibit environmental claims but seek to ensure they are made with integrity and transparency. The claims have to be supported by verifiable evidence and independent studies. For instance, terms like ‘100 per cent eco-friendly’, ‘zero emissions’, and ‘cruelty-free’ must now be substantiated with accurate and accessible qualifiers.

• The guidelines provide definitions for greenwashing and environmental claims to establish clear parameters.

• Companies are required to use consumer-friendly language for technical terms, while comparative environmental claims must be based on verifiable and relevant data, with specific aspects of comparison disclosed.

• Aspirational or futuristic environmental claims can only be made when supported by clear and actionable plans.

• The new guidelines mandate that companies making environmental claims must disclose all material information in advertisements or communications, either through QR codes, URLs, or other digital media.

• They must also specify whether the claim refers to the product as a whole, its manufacturing process, packaging, usage, or disposal.

• Specific environmental claims, such as ‘compostable’, ‘degradable’, ‘recyclable’, and ‘net-zero’, must be supported by credible certification, reliable scientific evidence, or third-party verification. These disclosures should be easily accessible to consumers.

• The guidelines also address the use of technical terms, requiring companies to provide consumer-friendly explanations for concepts like ‘environmental impact assessment’ and ‘ecological footprint’.

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