9 Asian Legal Business | January-February 2025 PE/VC 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 thirdparty 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 realtime updates of environmental certifications. 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 longterm 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. “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.
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