Greenwashing: Penal cost hidden in ‘organic’ marketing material

Prathiba Karthikeyan

Partner

22 Jun 2026

5 min read

In today’s world, the terms ‘organic’, ‘natural’, ‘eco-friendly’ and their friends are tossed around like they are the new currency, the buzzwords that uplift the market value, the leverage to bypass the regular route or the attribute that stands out. Looks like it is lost on us that these should not be the outlier attributes but the normal, the regular, the way things are supposed to be. The rest should be called ‘non-organic’, ‘not-natural’, ‘eco-damaging’ and the like. But this discussion is to take a slight turn, to analyze how law deals with the usage of these currency words to sell goods and services and how these may be hiding a hefty financial liability; how such advertisement terminologies should not just pass the marketing team but also the legal and the finance team.

Background

The Consumer Protection Act, 2019 introduced the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024[1] (‘Anti-Greenwashing guidelines’) to do what the name suggests, prevent ‘greenwashing’ and regulate mislead ‘environmental claims.’ And both these critical terms are defined. How well, we will see. The Anti-Greenwashing guidelines are in furtherance to the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (‘Anti-Misleading guidelines 2022’)[2].

While answering questions relating to greenwashing and misleading advertisements, and cognizance taken by Central Consumer Protection Authority (‘CCPA’) of such misleading or surrogate advertisements, the Minister of State, Consumer Affairs, Food and Public Distribution stated that ‘various directions were issued including discontinuation or modification of the advertisements besides imposition of penalties to protect the rights of consumers as a class and a penalty amount of ₹ 1,08,85,000 has been realized so far’. It was emphasised that the CCPA may impose penalty on manufacturer or endorser up to INR 10 lakhs and INR 50 lakhs in case of repeated violations. Is anyone budgeting for such costs?

Liability travels

Anti-Greenwashing guidelines apply to a manufacturer, service provider, trader, the advertising agency or even the endorser vis-à-vis the subject goods or service.

Section 21 of the Consumer Protection Act, 2019[3] deals with the powers of the Central Government to investigate and issue direction and penalties against false and misleading advertisements. In addition to directions to discontinue or modify the advertisement, there can be a personal liability, and endorsement bans of one to three years on endorsers. This makes such claims a direct personal risk than a mere marketing cost. The reputation of the brand and the endorser is at stake, for not just this product but in totality.

What actually trips the wire

Terms like ‘clean’, ‘green’, ‘eco-friendly’, ‘cruelty free’, ‘organic’, ‘natural’, ‘pure’, ‘sustainable’, ‘good for the planet’, and ‘carbon neutral’, etc. must be backed by credible certification, reliable scientific evidence, verifiable internal data, or third-party verification.

The definition of environmental claims envelopes all situations that suggest a sense of environmental responsibility or friendliness, whether it is about the goods, or services, or the process of manufacturing of the goods or provision of the service, its packaging, its usage or even disposal. It could be an absolute claim or relative to those of the competitors. Thus, keeping the coverage broad and naturally intending to not render a restrictive interpretation.

Similarly, greenwashing has also been defined to be able to cover within its ambit any deceptive or misleading practice. Because that is exactly what greenwashing is, misleading the user into thinking that the goods or services are good or at least better for the environment, and doing so without any substantiation. It could be by outright omission of relevant information or making a vague claim which has no supporting evidence. It is not restricted to the mere use of words, rather, symbols or even an emphasis on the positive while concealing harmful attributes.

It is interesting to note that even before the Anti-Greenwashing guidelines, the Advertising Standards Council of India had taken congizance of claims like ‘Natural Mosquito Repellent‘, ‘100% organic and botanical blends inspired by Ayurveda’, ‘100% certified organic food & wellness products’, ‘the only oil which is made by natural process, is chemical free and double filtered’, ‘India's first chemical free canola oil’, etc. which were not substantiated by appropriate licences, approvals and certifications.[4]

Greenwashing is being increasingly dealt with an iron hand worldwide. It is unnecessarily misdirecting users and consumers. In the last few years, the cases where international regulatory bodies and courts have been holding companies and brands accountable has increased manifolds. To mention a few recent notable cases, UK’s Advertising Standards Authority (‘ASA’) holding popular sportswear brands[5] [6] for violation of the code for the use of terms like ‘sustainable’ without adequate substantiation; the Italian Competition Authority imposing a fine of 1 million euros on a fast fashion brand for using misleading environmental messages and green claims[7] or a Paris Court handing out the first ruling against an energy industry major for making misleading claims about achieving carbon neutrality [8]. This list is much longer, and it is as illustrious as it is disappointing.

Does it mean the end of the road?

Greenwashing cases piling in courts holds mixed feelings. On the one hand, it is highly disappointing that at a time when every resource should be used to actively improve the environment, businesses are wasting considerable resources to distract the public and even worse, waste further resources to hold them accountable. On the other hand, regulatory bodies, advertising watch dogs, Courts, non-governmental institutions and the consumers are seeking accountability and strict action.

But it does not mean that advertisements should stop using terms like ‘sustainable’, ‘organic’, etc. In fact, the Anti-Greenwashing guidelines specifically clarify that the use of obvious hyperboles or puffery or even declaring intention in the mission statement of the company that is not specific to any product are not considered greenwashing. The requirement is that any indication to be good for the environment should be adequately backed by evidence. And evidence will include relevant licenses, certifications, quality reports or data, obtained through third party and independent bodies that substantiates the claim without doubt. There should be an effort made to explain technical terms that are user friendly without letting it get so complicated that its practically irrelevant for the consumer.

Disclosures have to be made in the appropriate manner which is guided by the principles of transparency and accessibility. The use of QR codes, URLs or any digital medium to provide all relevant information is encouraged. The objective is to ensure that environmental claims are truthful, accurate, clear and unambiguous. These are in line with global standards and requirements.

Quiet isn't safe, and the cure is a file

The fact that we have not heard a crackdown by the CCPA yet is no reason to take this lightly. The Rajya Sabha question clearly shows that greenwashing is being discussed in the policy circles. As India works to establish itself as a global force and pursue its ambitious climate goals, global developments show that tackling greenwashing will become increasingly necessary. But the window allowing self-scrutinising the claims being made, what is their origin, how are they substantiated and to make appropriate corrections will not remain open for long. By making sure that marketing material does not throw around words and symbols indicating environmentally friendly acts, rather a complete audit and holding substantiated support for each such term, each such image, is what will avoid the spill over of these claims into legal and financial obligations. Violations resulting in penalty for the businesses and for the endorsers alike will cost the reputation of brands highly, the very thing that these terms wanted to strengthen in the first place, which is paradoxical. Instead of a penalty, those funds could be used for actual environmentally friendly actions and that’s worth giving attention to.

[The author is a Partner in Climate Change and Sustainability practice at Lakshmikumaran & Sridharan Attorneys, New Delhi]