New Guidelines to Combat Greenwashing: CCPA's Standards for Environmental Claims

What’s in today’s article?

• Why in News?
• What is Greenwashing?
• Key highlights of advertising guidelines for preventing greenwashing

Why in News?

The Centre has introduced new guidelines to prevent companies from making false or misleading claims about their products' environmental benefits. 

These rules, issued by the Central Consumer Protection Authority (CCPA), require companies to provide scientific evidence to support their claims. 

The guidelines are part of a broader effort to crack down on misleading advertisements. These norms would complement the existing Guidelines for Prevention of Misleading Advertisements and Endorsement for Misleading Advertisements 2022, which deal with false or exaggerated claims in advertisements in general.

What is Greenwashing?

• About
  • It refers to the growing practice of companies, organizations, and even countries making dubious or unverifiable claims about their environmental or climate-friendly activities. 
  • While the term has been primarily used in the context of advertising, its implications are much broader. 
  • It presents a false picture of the progress being made on the climate change front, thereby pushing the world towards disaster, while at the same time rewarding entities for irresponsible behaviour.
• Famous Examples
  • Major cases of greenwashing include the 2015 Volkswagen scandal, where the company manipulated emissions tests to appear environmentally friendly. 
  • Other corporations like Shell, BP, and Coca-Cola have also been accused of greenwashing. 
  • Governments too, have been implicated, such as exaggerating the carbon absorption potential of their forests or overemphasizing the impact of certain regulations. 
  • Carbon trading and offset practices have similarly come under scrutiny for lacking scientific rigor.
  • Sometimes companies do make genuine mistakes — overestimating the impact of their environment-friendly projects. 
  • However, very often they lie, or mislead, and these constitute the more serious cases of greenwashing.
• Global Efforts to Combat Greenwashing
  • In response to the widespread nature of greenwashing, UN Secretary-General António Guterres called for a zero-tolerance policy. 
  • A high-level expert group was formed to propose strategies for curbing greenwashing, particularly among non-state actors like corporations and financial institutions. 
  • Key recommendations included: 
    • banning fresh investments in fossil fuels, 
    • setting short-term emission reduction targets, 
    • halting deforestation activities, and 
    • discouraging the use of carbon offset mechanisms at the initial stages of pursuing net-zero commitments.
• Why greenwashing is fairly widespread?
  • The processes and products that can potentially cut emissions are so many that it is practically impossible to monitor and verify all. 
  • There is lack of regulation and standardisation in most of these spaces.
  • The processes, methodologies and institutions to measure, report, create standards, verify claims and grant certifications are still being set up.
  • Also, large number of organisations have sprung up claiming expertise in these areas and offering their services for a fee. 
  • Many of these organisations lack integrity and robustness, but their services are still availed by corporations because it makes them look good.
• Way forward - Six principles for trustworthy environmental claims

Key highlights of advertising guidelines for preventing greenwashing

• Background
  • The government initiated the drafting of these guidelines in November 2023, forming a committee that held three meetings and submitted a draft earlier this year. 
  • After seeking public comments, the final guidelines were released.
• Definition of Greenwashing in Advertising
  • The guidelines define greenwashing as any deceptive or misleading practice where relevant information is concealed, exaggerated, or vague claims are made regarding the environmental benefits of a product or service. 
  • This can involve the use of misleading words, symbols, or imagery that highlight positive environmental aspects while concealing the negative ones.
• Allowance for Hyperbole
  • The guidelines permit the use of "obvious hyperboles" or "puffery," which are common in advertising, as long as they do not amount to deception or misleading the consumer. 
  • For instance, claims about growth being based on "sustainable principles" would not be considered misleading. 
  • However, more specific claims, like stating that all products are manufactured sustainably, would need to be substantiated.
• Use of Generic Environmental Terms
  • Generic terms such as "clean," "green," "eco-friendly," and "sustainable" are only allowed if companies can provide evidence to support such claims. 
  • Advertisements must use accurate qualifiers and disclosures, ensuring that these terms are not vague or misleading.
• Clarification of Technical Terms
  • When using technical terms such as "environment impact assessment" or "greenhouse gas emissions," companies must explain their meaning and implications in a way that is easily understood by consumers. 
  • The guidelines emphasize the importance of making these terms clear and accessible to the public.
• Requirements for Specific Environmental Claims
  • More specific environmental claims—such as "compostable," "non-toxic," or "plastic-free"—must be supported by reliable scientific evidence, certifications, or third-party verification. 
  • This ensures that companies can substantiate their claims with credible sources.
• Applicability of the Guidelines
  • The guidelines apply to all environmental claims made by manufacturers, service providers, or advertisers, and extend to advertising agencies and endorsers involved in promoting such products or services. 
  • The guidelines strictly prohibit engaging in greenwashing and misleading environmental claims.

Q.1. What are the new guidelines introduced by the CCPA regarding greenwashing?

The CCPA's new guidelines require companies to provide scientific evidence for environmental claims, preventing misleading advertisements and ensuring transparency in corporate sustainability efforts.

Q.2. How do the guidelines address the use of generic environmental terms?

The guidelines allow the use of terms like "eco-friendly" only if supported by evidence. Advertisements must include accurate qualifiers to avoid misleading consumers about environmental benefits.

Source: Greenwashing guidelines: How govt is tackling companies making dubious climate-friendly claims about products | Financial Express