India's new greenwashing guidelines, introduced in October 2024, mandate verifiable documentation and third-party certification for environmental marketing claims. Violations of these guidelines carry substantial penalties including fines up to 5 million rupees and potential imprisonment.
India's recent guidelines on greenwashing, issued in October 2024, represent the most comprehensive regulatory framework yet for environmental marketing claims in the country. The guidelines arrive amid a crisis of consumer trust - only 29 percent of Indian consumers believe companies' green assertions, while 71 percent report direct experiences with greenwashing. According to Advertising Standards Council of India (ASCI) data, nearly four out of five green claims in the Indian market were found to be either exaggerated or misleading, highlighting the urgent need for regulatory intervention.
The guidelines introduce several groundbreaking requirements. First, they mandate comprehensive documentation for any environmental claim, covering everything from manufacturing processes to end-product attributes. Second, these claims must include digital verification through QR codes or URLs, making evidence instantly accessible to consumers. Third, strict standards are established for comparative environmental claims between products. Additionally, commonly used terms like “eco-friendly,” “sustainable,” or “natural” now require specific third-party certification.
The scope of the guidelines extends across all advertising mediums and formats but is restricted to specific product claims rather than general corporate sustainability mission statements. “This nuance acknowledges the difference between broad corporate values and measurable product-specific claims, focusing regulatory efforts on the latter to prevent misleading advertisements,” explains Pooja Chatterjee, a partner at King Stubb & Kasiva.
BUSINESS IMPLICATIONS
For businesses, these changes necessitate a fundamental shift in how they communicate environmental initiatives.
The guidelines require verifiable evidence for all environmental claims, moving beyond mere marketing assertions. Rajat Jariwal, a partner at Trilegal, explains that “generic terms such as clean, green, eco-friendly can no longer be used without adequate and accessible qualifiers and substantiation.”
The penalties are substantial. First-time violations can attract fines of up to 1 million rupees ($11,000) and potential imprisonment for two years. Repeat offenses face graver consequences, with fines of up to 5 million rupees and imprisonment terms extending to five years. This marks a departure from previous regulatory approaches, introducing criminal liability for environmental misrepresentation.
Beyond financial penalties, regulatory authorities can order immediate cessation of deceptive advertisements and mandate corrective notices. The Supreme Court has demonstrated its commitment to consumer protection, recently ordering a prominent Ayurvedic brand to cease misleading advertisements and remove suspended products. Notably, liability extends to celebrity endorsers and influencers, who must exercise due diligence in verifying environmental claims before promotion, Chatterjee explains.
Further, under India’s Consumer Protection Act, consumers who have been misled by environmental claims can join together to file class action complaints with consumer courts for contravention of the guidelines.
A company’s “Key Managerial Personnel,” which includes its board members and C-suite executives, “may be held personally accountable if personal involvement in the making of a misleading environmental claim is shown,” Jariwal adds.
Industry impacts vary significantly. Manufacturing companies wrestle with documenting entire production processes, from raw material sourcing to energy consumption and waste management. Textile manufacturers, for instance, must verify organic cotton claims throughout their supply chain, while automotive companies need documentation for recycled material usage and emissions reduction claims.
Retailers face complex challenges in verifying supplier claims while maintaining their own environmental assertions. E-commerce platforms must particularly adapt their systems to display and verify environmental claims for thousands of products. The hospitality sector grapples with substantiating energy efficiency claims and sustainable practices, while technology companies must verify green data centre operations and sustainable hardware claims.
BUILDING COMPLIANCE
These requirements mean business operations face substantial adjustment requirements. Marketing teams will now need to collaborate closely with legal departments, supply chain managers, and sustainability experts. This necessitates the establishment of new verification processes, updating documentation systems, and retraining staff across departments.
“Corporations should undertake a comprehensive review of their existing policy frameworks and make necessary amendments or adopt new policies to incorporate the safeguards outlined in the guidelines,” advises Niti Paul, a partner at Luthra and Luthra Law Offices.
This includes maintaining centralised documentation repositories, implementing rigorous review processes for all claims before publication, and establishing supply chain verification mechanisms.
The law recognises good faith efforts, Jariwal at Trilegal points out. “However, this protection requires demonstrable evidence of systematic verification processes, from data credibility checks to comprehensive staff training programs. Companies should particularly focus on documenting their verification processes and maintaining real-time tracking of environmental metrics,” he advises.
Paul emphasises the importance of organisational alignment in preventing greenwashing violations, particularly by fostering synergy between legal and marketing teams. “As part of an internal approval process, advertisements should undergo thorough review and clearance from relevant teams, including the legal department, to ensure compliance with regulatory standards,” Paul adds.
To safeguard against misleading claims, Chatterjee notes that companies should establish a centralised and systematic review process for all advertisements featuring environmental claims. “For high-stakes environmental claims, companies must consider engaging external consultants or third-party validators to further substantiate the claims made,” Chatterjee says.
A fundamental aspect of ensuring the authenticity of environmental claims lies in establishing rigorous due diligence procedures for verifying the sustainability credentials of suppliers and third-party partners. “Supplier contracts should include clauses requiring verifiable data for any environmental claims associated with their goods or services,” Chatterjee advises.
Companies must establish robust crisis management protocols to address potential greenwashing allegations. “A transparent communication strategy must be prepared to address consumer and regulator concerns promptly. Furthermore, proactively monitoring digital platforms and media is essential to detect any potential challenges or violations related to environmental claims at an early stage,” Chatterjee adds.
The digital compliance landscape demands development of sophisticated infrastructure development. Companies must create accessible databases linking environmental claims to supporting documentation. This includes establishing verification portals, implementing QR code systems, and maintaining real-time updates of environmental certifications.
While Large corporations leverage existing ESG frameworks for easier adaptation, smaller businesses often struggle with resource-intensive documentation requirements. Small and medium enterprises face particular challenges in meeting technical requirements while managing cost implications.
Given the dynamic regulatory landscape, Paul recommends establishing dedicated oversight mechanisms: “Corporations should consider forming an ESG Committee responsible for conducting periodic reviews of policies and internal approval processes, ensuring that any updates or amendments to the regulatory framework are promptly adopted and implemented.”
The guidelines also reflect growing global pressure for environmental accountability. International companies operating in India must now align their global sustainability claims with local verification requirements, potentially influencing their worldwide practices. This alignment with international standards helps Indian companies competing in global markets while protecting local consumers.
“To drive meaningful sustainability efforts, companies must commit to long-term goals with clear, actionable plans and timelines, ensuring that progress is measurable and aligned with industry standards,” says Chatterjee. “Transparency can be further enhanced by leveraging blockchain technology or digital platforms, which enable the traceability of environmental claims across the supply chain.”
MORE ON THE WAY
The regulatory landscape continues to evolve, with new requirements emerging regularly. Companies implementing early adaptations will be better positioned as environmental consciousness grows among Indian consumers. Industry experts anticipate more specific guidelines across several crucial areas. These include stringent standards for biodegradability claims, more rigorous carbon offset verification processes, and increased scrutiny of circular economy initiatives.
“To drive meaningful sustainability efforts, companies must commit to long-term goals with clear, actionable plans and timelines, ensuring that progress is measurable and aligned with industry standards. Transparency can be further enhanced by leveraging blockchain technology or digital platforms, which enable the traceability of environmental claims across the supply chain.”—Pooja Chatterjee, King Stubb & Kasiva
“It is likely that sector-specific greenwashing guidelines will emerge for industries with significant environmental footprints, such as energy, fashion, or manufacturing. Tailored compliance strategies for each sector may become necessary,” predicts Jariwal.
Due diligence requirements are expected to become increasingly stringent, particularly regarding documentation and verification processes. The legal framework's recognition of protection for businesses and endorsers who demonstrate proper due diligence is likely to evolve into more specific requirements, says Paul.
While India's guidelines generally align with international regulations, there are notable gaps in specific areas, such as carbon offsetting claims. “The rising concern over 'phantom credits' in the carbon market has sparked debate about whether India should follow the EU's approach and implement a complete prohibition on such claims,” Paul observes.
The EU's greenwashing directive has taken a definitive stance by prohibiting environmental claims based on carbon offsetting entirely. “India's guidelines currently address this only indirectly, representing a critical area for potential regulatory development,” Paul adds.
