8 Asian Legal Business | January-February 2025 PE/VC 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. Firsttime 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. 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 “ecofriendly,” “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. Green claims, real stakes 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. By Nimitt Dixit
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