Modern consumers are increasingly aware and selective about the products they purchase, paying attention to factors such as quality, sustainability, and ethical sourcing. Companies have started capitalizing on this awareness by marketing their products as ‘green’, ‘eco-friendly’, ‘cruelty-free’, and more, regardless of whether they truly meet these standards. Previously, there were no clear guidelines to protect consumers from false claims made by products. For example, a product is marketed as herbal simply because it contains one herbal ingredient among many chemicals. The new guidelines from the CCPA aim to address these issues by setting standards for environmental claims and tackling greenwashing. An environmental claim is a company’s statement about the eco-friendly benefits of its products or services. When a company employs misleading marketing strategies by concealing certain things and exaggerating certain claims about the environmental benefits of the product or service, it is called greenwashing. These guidelines apply to all environmental claims and to manufacturers, service providers, traders, advertising agencies, or endorsers involved in advertising such goods or services.
The CCPA has disclosed the following guidelines that are to be followed by companies:
1. Avoid Generic Terms: Generic terms like ‘eco-friendly’, ‘green’, etc. need specific details to be meaningful. For example, “Our product is eco-friendly and made with green practices”. Terms like ‘eco-friendly’ and ‘green’ sound too vague.
2. Clarify Technical Terms: Technical terms need clear explanations. For example, “Harnessing the power of sustainable technologies”. Specific details on how technology is sustainable should be disclosed.
3. Provide Verifiable Evidence: Environmental Claims shall be truthful, accurate based on verifiable information. For example, “Our packaging is made from 100% recycled materials”. Without verifiable evidence or certification, this information is misleading.
4. Provide accurate endorsements, certifications, or seals of approval: Claims suggesting endorsements, certifications, or seals of approval that are false, misleading, unofficial, or lack credible recognition are deceptive. For example, calling a product “certified organic” without proper certification is false advertising.
5. Adequate disclosures: When an environmental claim is made (including comparable environmental claims), exact information of claim should be provided. This can be done with relevant documents, material information about the product disclosed in the ad itself or a QR code about the same. For example, an advertisement for a laundry detergent claims, “50% less plastic in our packaging compared to previous bottles!”. To support this environmental claim, the ad should include a QR code that directs to a webpage with documents verifying the reduction in plastic usage, details on how this comparison was measured, and any third-party certifications.
These guidelines mark a significant step towards ensuring transparency and accountability in environmental marketing, helping consumers make more informed decisions while promoting genuine sustainability. The Business Responsibility & Sustainability Reporting (BRSR), introduced for the top 1000 listed companies, is already in its third year now. It is time the Ministry of Coporate Affairs and the Securities & Exchange Board of India (SEBI) publish guidelines for corporate sustainability reporting to usher in more transparency and accuracy of corporate ESG claims, just as the CCPA has published these greenwashing guidelines.