As sustainability becomes a key focus in corporate strategy, companies are increasingly making environmental claims to appeal to eco-conscious consumers. However, some of these claims can be misleading—a practice known as greenwashing. While global regulators are tightening their grip on deceptive sustainability marketing, India's response is still evolving. The existing legal framework includes provisions to address greenwashing, but enforcement remains inconsistent, and the penalties may not always be sufficient to deter larger corporations. This raises an important question: Are India's current laws adequately equipped to tackle greenwashing, or is there a need for a more comprehensive regulatory framework?

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The Deceptive Facade of Greenwashing

Greenwashing occurs when businesses misrepresent their environmental initiatives, either by exaggerating their impact or concealing their overall harm. A common tactic is promoting a single green initiative while ignoring the broader environmental footprint. For example, a company might advertise a “100% biodegradable” product while relying on unsustainable supply chains or excessive plastic packaging. Others claim “carbon neutrality” without tangible emission reductions, relying instead on questionable offset programs. These tactics not only mislead consumers but also distort market competition, allowing unsustainable businesses to profit at the expense of genuinely responsible firms.

The contemporary relevance of Greenwashing

Internationally, greenwashing scandals have damaged the credibility of corporate ESG commitments. H&M's “Conscious Collection” faced a lawsuit in the US for misleading consumers about its sustainability claims, while Volkswagen's infamous Dieselgate scandal exposed the company's fraudulent emissions data. Many FMCG and fashion brands have been criticised for using unverified eco-labels, marketing their products as “biodegradable” or “natural” without scientific backing. Beverage companies frequently claim their plastic packaging is “100% recyclable,” yet only a fraction of it ever enters the recycling system. These instances underscore a glaring regulatory gap—while companies are free to make sustainability claims, there is little oversight ensuring these claims are genuine.

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The Legal Framework: Gaps in India's Response

On paper, India has several laws that could be used to address greenwashing. The Securities and Exchange Board of India (SEBI) has introduced Business Responsibility & Sustainability Reporting (BRSR) Core, requiring listed companies to disclose verifiable ESG data. While this represents progress, its effectiveness hinges on strict enforcement, something India has struggled with.

SEBI's Business Responsibility and Sustainability Reporting (BRSR)

Introduced in 2021, SEBI's BRSR framework mandates the top 1,000 listed companies to disclose detailed ESG information. In 2023, SEBI launched BRSR Core, introducing nine key ESG attributes to strengthen corporate accountability. The framework requires companies to provide verifiable data on their sustainability claims, promoting transparency. In January 2025, SEBI relaxed the timeline for ESG rating reviews, allowing ESG Rating Providers (ERPs) up to 45 days to review ratings after the BRSR publication.

RBI's Climate Finance Disclosure Requirements

Following SEBI's lead, the Reserve Bank of India (RBI) introduced draft climate finance disclosure requirements for financial institutions. These aim to integrate climate-related risks into financial reporting, promoting greater transparency and accountability in ESG practices.

Greenwashing Guidelines (November 2024)

In a significant step, the Central Consumer Protection Authority (CCPA) introduced Greenwashing Guidelines under the Consumer Protection Act, 2019. These guidelines include:

• Verifiable Data: Companies must back their sustainability claims with concrete data.
• Clarity and Accessibility: ESG disclosures must be clear and easy to understand.
• Third-Party Validation: Independent verification is encouraged for added credibility.
• Prohibition of Overstatement: Companies cannot exaggerate their sustainability achievements.

A Deeper Issue: The Power of Consumer Perception

Regulatory shortcomings are not the sole issue—consumer perception plays a crucial role in enabling greenwashing. In India, sustainability remains a secondary concern for many consumers, who prioritise affordability and convenience over environmental impact. This lack of consumer-driven pressure allows companies to continue greenwashing without major consequences. Unlike in Western markets, where investor activism and public scrutiny push businesses toward genuine ESG commitments, Indian corporations face little reputational risk for misleading environmental claims. This, in turn, reduces incentives for companies to adopt transparent sustainability practices.

The Need for Systemic Change

Addressing greenwashing requires more than just tighter regulations—it demands a paradigm shift in how sustainability is monitored and communicated. Strengthening BRSR Core with hefty penalties for false ESG claims is a necessary step, but independent third-party ESG audits could provide a more effective verification mechanism because trust is the cornerstone of credible ESG reporting. Without independent verification, sustainability claims lack the rigor and reliability necessary to gain stakeholder confidence. Just as financial statements are deemed trustworthy only after thorough audits, ESG reports should be held to the same standard. As the saying goes: proof beats promises companies that proactively adopt third-party ESG audits will not only mitigate the risk of greenwashing accusations but also build greater credibility and investor trust. India must also look toward global best practices, such as the EU's Green Claims Directive, which mandates companies to provide scientific evidence for their sustainability claims before advertising them.

Beyond legal reforms, consumer education must be a priority. If consumers are equipped with the knowledge to critically assess green claims, they can act as a natural check against deceptive corporate practices. Civil society organizations, media, and advocacy groups must step in to raise awareness, fostering an environment where companies feel compelled to embrace genuine sustainability rather than superficial green marketing.

Conclusion

India is at a crossroads in its approach to greenwashing. While regulatory efforts like SEBI's BRSR Core signal progress, the lack of stringent enforcement, standardised reporting, and consumer awareness continues to enable deceptive sustainability claims. The challenge lies not just in creating new laws but in ensuring meaningful enforcement and public accountability. To truly combat greenwashing, India must adopt a more transparent, consumer-driven, and strictly regulated ESG landscape, where sustainability is not just a marketing tool but a verifiable corporate commitment.

Frequently Asked Questions

What are the environmental benefits of tackling greenwashing practices?

Curbing greenwashing practices ensures that companies adopt genuine sustainability efforts instead of misleading consumers with false environmental claims. This leads to real environmental benefits like reduced carbon emissions, improved sourcing practices, and wider adoption of sustainable products.

How do misleading claims undermine genuine sustainability efforts?

Misleading claims or exaggerated environmental claims allow businesses with unsustainable practices to compete unfairly, while companies making real efforts are overlooked. This undermines genuine sustainability efforts, erodes consumer trust, and slows progress toward sustainable development.

What role does the Advertising Standards Council of India (ASCI) play in environmental responsibility?

The Advertising Standards Council of India (ASCI) monitors environmental marketing claims to prevent deceptive or misleading practices. ASCI encourages adequate disclosures, use of reliable scientific evidence, and third-party certifications to ensure advertising promotes genuine sustainability efforts.

Why are unsubstantiated environmental claims considered a deceptive practice?

Unsubstantiated claims without verifiable evidence are classified as a deceptive practice under consumer protection laws. These practices not only spread misleading information but also conceal harmful attributes of products, misleading consumers into supporting unsustainable practices.

How can regulatory bodies address greenwashing concerns in India?

Indian regulatory bodies, including SEBI and the Central Consumer Protection Authority (CCPA), have proposed guidelines to curb greenwashing concerns. Measures include requiring verifiable evidence, banning exaggerated claims, and strengthening penalties under unfair trade practices frameworks.

What are the key challenges in regulating greenwashing practices?

The key challenges include vague or misleading advertisements, inconsistent regulatory oversight, lack of consumer awareness, and insufficient penalties for false environmental claims. Together, these gaps allow deceptive environmental claims to persist in the advertising industry.

How do consumer protection laws help prevent misleading environmental statements?

Consumer protection laws address false environmental claims by prohibiting unsubstantiated environmental statements and requiring adequate disclosures. These laws aim to protect buyers from misleading practices, ensuring they can make informed choices about sustainable materials and products.

How do proposed greenwashing guidelines promote environmental responsibility?

The proposed guidelines by the CCPA mandate companies to provide verifiable evidence for sustainability claims, prohibit exaggerated or false claims, and encourage third-party certifications. This ensures environmental advertising reflects true environmental responsibility and promotes sustainable consumption.

What are the negative consequences of misleading environmental practices?

Misleading practices or false claims about being eco-friendly can damage consumer trust, harm investor confidence, and reduce pressure on corporations to adopt sustainable practices. Over time, this slows progress toward sustainable development and weakens accountability within the regulatory framework.

What environmental concerns are linked to misleading sustainability claims?

Misleading or vague claims can distract attention from genuine environmental concerns such as carbon emissions, unsustainable sourcing, and waste management. This undermines businesses that make verifiable efforts to address positive environmental aspects.

How do existing regulations address vague or unproven environmental claims?

Current environmental regulations in India, including the Consumer Protection Act and SEBI’s BRSR framework, prohibit unproven claims. However, enforcement gaps allow some companies to continue making vague or exaggerated claims without sufficient penalties.

Why is environmental consciousness important when evaluating claims like “carbon neutral” or “environmentally friendly”?

Consumers with greater environmental consciousness can better identify whether such claims are backed by reliable data. Terms like “carbon neutral” or “environmentally friendly” must be supported by transparent disclosures, not just marketing language.