Greenwashing is a practice of making false, misleading, or exaggerated claims about the environmental friendliness of a company, product, or service to create an impression that they are environmentally responsible while, in fact, it may be a marketing gimmick to appear ‘green’. This article provides answers to the key questions regarding India’s legal framework on greenwashing.
1 Why do companies engage in greenwashing?
Companies use greenwashing primarily to enhance their public image and gain a competitive edge; at times, without making any substantial changes to their environmental practices. Some of the reasons are outlined below:
Attracting customers – companies hope to entice customers who prefer sustainable brands;
Increasing sales and marketing share – some consumers are willing to pay more for products they believe are better for the environment;
Improving reputation – green claims help companies to stand out in a crowded market and foster loyalty among stakeholders;
Meeting regulatory or investor pressure – companies use greenwashing to appear compliant or responsible without fully committing to real change; and
Reducing scrutiny – by publicising token environmental actions, companies may deflect criticism or reduce scrutiny of their less sustainable practices.
2 What steps have been taken by the Indian government to regulate greenwashing?
The Indian Central Consumer Protection Authority (CCPA) has unveiled the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 (an extension of the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022). These guidelines aim to ensure:
Transparency and accuracy in advertisements related to environmental sustainability; and
That all environmental claims made by manufacturers, service providers, traders, advertising agencies, and endorsers are truthful, accurate, and substantiated with verifiable evidence.
The guidelines are designed to protect consumers from being misled by exaggerated, vague, false, or unsubstantiated environmental claims. They also provide instructions on how to make such claims.
3 What responsibilities do advertisers have under the CCPA guidelines?
Advertisers must disclose all material information within the relevant advertisement or communication and ensure that research data is presented comprehensively, without selectively emphasising favourable results or concealing unfavourable findings.
Comparative environmental claims must use verifiable, relevant data and clearly state what is being compared.
Specific claims such as “compostable”, “degradable”, and “non-toxic” should be substantiated with credible certification, reliable scientific evidence, or verifiable internal documentation.
Visual environmental claims should not manipulate consumers into believing that a product or service is environmentally responsible without providing relevant details or context.
4 What responsibilities do endorsers have under the CCPA guidelines?
Endorsers are individuals or entities whose services are availed for the advertisement of goods, products, or services. They are often celebrities, influencers, athletes, experts, media reviewers, or product users who leverage their credibility or popularity to promote a product. The guidelines make endorsers equally responsible for claims and put the onus on them to confirm the truthfulness of claims based on verifiable evidence.
5 Have any guidelines for advertisements making environmental/green claims been issued by the Advertising Standards Council of India (ASCI)?
Guidelines to ensure that advertisements making environmental claims are true, clear, and evidence-based were issued by the ASCI in February 2024. The guidelines assist consumers in making more informed choices based on environmental claims and explain the ASCI’s approach in investigating whether environmental claims are likely to contravene the ASCI’s Code for Self-Regulation of Advertising Content in India.
6 What are the ASCI’s guidelines for making absolute environmental claims?
Absolute claims such as “environmentally friendly”, “eco-friendly”, “sustainable”, or “planet friendly” must be substantiated by robust data and/or well-recognised and credible accreditations. These claims cannot be diluted by disclaimers or other clarificatory mechanisms such as QR codes or website links.
7 What should advertisers ensure when using certifications or seals of approval?
According to the ASCI guidelines, advertisers must specify which product or service attributes were evaluated by the certifier. Furthermore, the certifying agency must be nationally or internationally accredited by a certifying authority.
8 What should advertisers avoid in visual elements of advertisements?
Under the ASCI guidelines, advertisers should avoid using visual elements that convey a false impression that the product is less harmful or more beneficial to the environment. This includes logos representing a recycling process on packaging and/or in advertising material.
9 What qualifications are required for claims about compostable, biodegradable, recyclable, non-toxic, or ‘free-of’ products?
As per the ASCI guidelines, advertisers should qualify the aspects to which such claims are being attributed and the extent of the same. All such claims should have competent and reliable scientific evidence to show that the product or the qualified component will break down within a reasonably short period after customary disposal and that the product is free of elements that can lead to environmental hazards.
10 What is greenwashing in the context of financial marketing?
Greenwashing in the context of financial marketing refers to financial institutions making exaggerated, misleading, or false claims about the environmental sustainability or green credentials of their products or services. This can include promoting funds, loans, or investment schemes as environmentally friendly or aligned with ESG principles without substantial evidence or a genuine commitment to those standards.
11 Who regulates greenwashing in Indian financial markets, and how?
Greenwashing in Indian financial markets is primarily regulated by the Securities and Exchange Board of India (SEBI). SEBI plays a central role in setting guidelines, monitoring compliance, and enforcing actions to prevent misleading or exaggerated sustainability (green) claims by companies and financial products.
SEBI has introduced regulations such as:
The Business Responsibility and Sustainability Reporting by Listed Entities framework; and
Guidelines for ESG-labelled mutual funds – in March 2025, SEBI introduced new rules for mutual funds offering ESG schemes to enhance transparency and credibility. Funds must now provide detailed, standardised ESG disclosures covering value-chain partners, including suppliers or customers accounting for more than 2% of trade value. The disclosures must cover at least 75% of a company’s upstream and downstream transactions, while independent third-party verification and annual impact assessments must be conducted. Only funds with at least 80% of assets in ESG-themed securities can use the “ESG” label, and multiple ESG funds are allowed if each follows a different investment strategy.
12 How can consumers spot greenwashing?
Consumers should be alert to the following:
Vague or generic claims – watch out for words such as “eco-friendly”, “natural”, or “green”.
Lack of proof or details – genuine environmental claims are usually backed by data, certifications, or transparent explanations.
Irrelevant claims – companies sometimes highlight an environmentally friendly aspect that is not particularly meaningful. For example, advertising a product as “CFC free” when CFCs are already banned by law.
Hidden trade-offs – a product might make claims such as being made from recycled materials while ignoring other significant environmental impacts, such as energy-intensive manufacturing.
Imagery and symbols – excessive use of green colours, leaves, or natural imagery, without substance or supporting information.
Misleading labels or certifications – check if eco-labels are from reputable, independent organisations, as some companies create their own ‘certifications’ that do not have real standards.
Overstating achievements – be wary of companies that highlight minor environmental efforts as major accomplishments, or focus on small, one-time changes instead of overall practices.
13 Who regulates greenwashing in Indian food sector?
The Food Safety and Standards Authority of India (FSSAI) primarily regulates greenwashing in the Indian food sector. The FSSAI enforces rules on food labelling, packaging, and advertising. Furthermore, it prohibits false or misleading claims about environmental friendliness, sustainability, or health benefits. Under the Food Safety and Standards (Organic Foods) Regulation, 2017, the FSSAI regulates the use of “organic”, “natural”, and other claims to prevent greenwashing. The FSSAI is responsible for product recalls, fines, or licence suspensions against violators of the organic food regulations.
14 What are the legal implications on violating Indian greenwashing guidelines or rules?
Violating guidelines or rules on greenwashing in India carries significant legal implications, as regulatory authorities are empowered to enforce compliance and penalise offenders. Key legal consequences include monetary penalties, corrective actions, suspensions or bans, public disclosure of violations, and legal proceedings, depending on the nature and severity of the offence.
