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The Problem of Greenwashing in India: Policy Review


Greenwashing
Greenwashing

If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.

 

1. Introduction


Greenwashing is the practice of making misleading or false environmental claims about a product or service to make it appear more environmentally friendly than it actually is. The consequences of greenwashing can be detrimental to both the environment and consumers. Greenwashing has become a prevalent issue in India, particularly in sectors such as FMCG, textiles, and home appliances. In this paper, we aim to discuss the implications of greenwashing and the need for stakeholders to take action to combat it. The prevalence of greenwashing in India can undermine the efforts of genuine sustainability initiatives and can mislead consumers, making it difficult for them to make informed purchasing decisions.



1.1 Prevalent issue of greenwashing in India


Exaggerating the environmental benefits of a product, using vague or unproven claims, or hiding negative environmental impacts can have serious implications. Especially in the second most populous country, India, consumers are prone to making purchasing decisions based on false or incomplete information, which can ultimately harm the environment. In this paper, we are going to discuss the issue of greenwashing in the Indian context and its implications on the consumer market


Several reports and studies have highlighted the problem of greenwashing in India. For instance, a study by the Centre for Science and Environment (CSE) found that many companies in India were making false and exaggerated claims about the environmental benefits of their products, and that there was a lack of transparency and accountability in the market.


Another study by the Advertising Standards Council of India (ASCI) found that 79% of green claims made in advertisements in India were misleading or exaggerated.

Quantitatively, there is also evidence to suggest that greenwashing is a significant problem in India. According to a survey by the market research firm YouGov, 71% of Indian consumers said that they had come across greenwashing, and 60% said that they were concerned about it. Furthermore, a report by the consulting firm Accenture found that only 29% of Indian consumers trust companies to tell the truth in their environmental claims.


Some of the common greenwashing practices observed in India include companies that use packaging that gives the impression that the product is eco-friendly or organic, even though it may not be true. For example, using pictures of leaves or greenery on packaging to imply that the product is environmentally friendly or even false environmental claims about their products' environmental benefits, such as claiming that they are biodegradable or recyclable, even though they are not. The misuse of green certification Companies eco-labels to make their products appear more environmentally friendly than they actually are.



2. WHY GREENWASHING


To make informed decisions, it is crucial for consumers to know about greenwashing practices and for companies to be transparent about their environmental impact and sustainability practices to promote genuine sustainability efforts. So let’s look at why the practice of greenwashing is so prevalent.


2.1 Contributing factors and causes of Greenwashing in India


There are several contributing factors/causes of this complex issue in India:


1. Lack of regulations: The absence of strict regulations on environmental claims and eco-labeling allows companies to make false or misleading claims about the environmental benefits of their products.


2. Pressure to be seen as ”Green/ Eco-Friendly” / Consumer demand for green products: Consumers in India are increasingly demanding eco-friendly and sustainable products, which has led companies to make exaggerated or false claims about the environmental benefits of their products to meet this demand.


3. Complex supply chains: The complexity of supply chains in many industries makes it difficult for companies to accurately assess the environmental impact of their products. This can lead to companies making false or misleading claims about their environmental impact.


4. Cost considerations: Genuine sustainability practices can be expensive to implement, and companies may be tempted to engage in greenwashing as a cheaper alternative.


5. Lack of consumer awareness: Many consumers in India may not be aware of greenwashing and how to identify it. This lack of awareness can make it easier for companies to engage in greenwashing practices without facing consequences.


6. Limited enforcement: While regulations and guidelines exist in India to address greenwashing, enforcement can be limited. This lack of enforcement can make it easier for companies to engage in greenwashing practices without facing consequences.



2.2 Consequences of Greenwashing practices


  • This deceptive practice can have negative consequences for both the environment and consumers. It is important for companies to be transparent and honest about their environmental practices and impacts to build trust with consumers and promote sustainability.

  • Greenwashing creates an unfair advantage for companies that engage in greenwashing over companies that are genuinely committed to sustainability, as consumers may be more likely to choose the former based on misleading information.

  • Greenwashing can also erode consumer trust and confidence in environmental claims made by companies, which can undermine efforts to promote sustainability and reduce environmental impact. Furthermore, it can also lead to regulatory and legal action, as there are laws and regulations in many countries that prohibit false or misleading advertising claims.


3. CURRENT LANDSCAPE


Greenwashing has been a practice in India for many years. Numerous studies have been conducted in understanding why this occurs and to what extent, such as the survey conducted by the Centre for Science and Environment (CSE) in 2020, many of the cleaning products sold in India were found to contain harmful chemicals, despite being marketed as eco-friendly and safe for the environment. In a study of 200 Indian companies conducted by the research firm Verdantix, only 25% had published detailed sustainability reports and only 15% had set targets for reducing their carbon emissions. According to a survey conducted by the Consumer VOICE, nearly 40% of the products marketed as "green" or "eco-friendly" in India did not have any certification to back up their claims. In 2019, a report by the Centre for Responsible Business found that many Indian companies were making false or exaggerated claims about their sustainability. A study by Accenture found that while 78% of consumers believed that it was important for companies to be environmentally responsible, only 50% believed that companies were actually doing so.

3.1 Greenwashing can be observed across various industries in India, such as:

3.1.1 Energy: The energy sector, including renewable energy companies, may face greenwashing concerns due to the complexities of measuring and communicating the environmental impact of their operations.

3.1.2. Fashion and Apparel: Tsomehe fashion companies make eco-friendly claims without comprehensive sustainability efforts. Misleading claims of using sustainable materials, fair trade practices, or green manufacturing can be prevalent.


3.1.3 Consumer Goods and Packaging: Companies may employ greenwashing tactics by using vague or unsubstantiated claims of being eco-friendly or using recyclable materials.


3.1.4 Food and Agriculture: some false organic farming practices, animal welfare claims, or eco-friendly packaging make this industry a contributor to Greenwashing.


3.1.5 Automobiles and Transportation: Companies in the automobile and transportation sector may engage in greenwashing by promoting fuel efficiency or low emissions without providing adequate evidence or transparency. This is particularly relevant as the demand for electric vehicles and sustainable transportation solutions increases.


3.1.6 Construction and Real Estate: Greenwashing can occur in the construction and real estate industry through claims of sustainable building practices or energy-efficient designs. However, the actual environmental impact of construction projects and building materials may not align with these claims.



3.2 Let’s take a look at some famous examples of greenwashing practice in India


3.2.1 HUL


Hindustan Unilever Limited (HUL) has faced accusations of greenwashing in India in relation to its personal care and home care brands, such as Dove, Lifebuoy, Surf Excel, and Rin. HUL has been criticized for making misleading claims about the environmental and social impacts of its products, and for allegedly using unsustainable practices in its supply chain.


For instance, HUL has faced scrutiny over its use of palm oil in its products, which has been linked to deforestation and human rights abuses in Southeast Asia. Despite HUL's claims to source sustainable palm oil, environmental groups have accused the company of not doing enough to ensure its palm oil supply chain is truly sustainable.


HUL has also been criticized for its "Clean India" campaign, which promotes the use of its cleaning products to improve public hygiene and sanitation. Critics have argued that the campaign is a form of greenwashing, as it fails to address the root causes of poor sanitation in India, such as inadequate infrastructure and lack of access to clean water.



3.2.2 Adani Power


Adani Power, a subsidiary of the Adani Group, has been accused of greenwashing by falsely claiming that its Mundra power plant in Gujarat is compliant with environmental regulations. In 2013, the National Green Tribunal (NGT) ordered Adani Power to pay a fine of Rs. 100 crore for causing damage to the environment and public health. Despite this, Adani Power has continued to claim that its Mundra power plant is compliant with environmental regulations and that it is committed to sustainable development.

In 2019, an investigation by the Indian Express found that Adani Power had violated several environmental norms at its Mundra power plant, including discharging hot water into the sea, emitting higher levels of sulfur dioxide than allowed, and dumping fly ash in violation of environmental norms. The investigation also found that Adani Power had submitted false data to the Central Pollution Control Board (CPCB) to show compliance with environmental norms.

Adani Power's greenwashing tactics are particularly concerning given the company's plans to build new coal-fired power plants in India, which would have a significant impact on the environment and public health.



3.2.3 Patanjali Ayurved Products


Patanjali Ayurved Limited, a popular FMCG company in India, claims that their products are "natural" and "herbal." However, several of their products have been found to contain harmful chemicals such as lead, mercury, and arsenic. In 2016, the Food Safety and Standards Authority of India (FSSAI) banned the sale of Patanjali's amla juice after it was found to be unfit for human consumption.



4. METHODOLOGY

To investigate the prevalence of greenwashing in India, surveys were conducted as the primary data collection method. Surveys are a useful research tool for collecting quantitative data from a large sample of participants. The sample population was selected using a random sampling technique, which ensures that every individual in the population has an equal chance of being selected for the survey.


The survey instrument was designed to collect data on various aspects of greenwashing, including consumer awareness, perceptions, and attitudes towards greenwashing in India. The questionnaire was developed based on a thorough review of the literature on greenwashing and adapted to the Indian context.

4.1 Limitations to the study


4.1.1 Potential bias: This paper is written by a small group of individuals with a specific point of view. This can lead to bias in the research or conclusions presented in this paper.


4.1.2 Limited scope: This paper focuses on bringing the Greenwashing concept to limelight. It does not cover everything related to the issue, as this is a vast topic. This can limit the usefulness in providing a comprehensive overview of a particular issue for some individuals.



5. KEY FINDINGS


Quantitative research results


We conducted a survey to understand the awareness level of a set of 40 individuals on the topic of Greenwashing, its implications and consumer awareness around greenwashing. The survey also aims to understand a surface-level consensus -


Key Results :


1. An astonishing 40% had not heard about Greenwashing before.

2. 20% individuals seem to not be concerned about Greenwashing which could be attributed to lack of awareness and implications.

3. Around 60% of consumers have been a victim of greenwashing at least once in the past.

4. 90% of the consumers believe that the Indian authorities need to introduce stricter laws and regulations to combat greenwashing.

5. 72% of individuals feel extremely important about the sustainability practices followed by a company.

6. 54% consumers believe that greenwashing is a major problem in India.


6. CONCLUSION 6.1 Summary


Greenwashing is a prevalent issue in India, with many companies making misleading or false claims about the environmental benefits of their products and practices. There is a lack of regulation and enforcement in India around green marketing claims, which has allowed companies to engage in greenwashing with little to no consequences. Consumers in India are generally aware of the concept of greenwashing, but they lack the knowledge and resources to identify and avoid greenwashed products. Companies that engage in genuine sustainability practices and communicate their efforts transparently have a competitive advantage over those that engage in greenwashing. There is a need for increased regulation and enforcement around green marketing claims in India, as well as greater education for consumers on how to identify and avoid greenwashed products.


Through our research and survey for this paper, we can conclude that most people aren’t aware of the concept of Greenwashing, and aren’t habitually checking the false claims on products they might be using in daily life. At the same time, more and more people are interested in adopting greener, sustainable and environment-friendly products/ingredients. There’s a huge gap in the existing sustainable market vs. actual sustainability impact. There are no measures or awareness programs in place. Strict Government policies and public information can help control Greenwashing before it is more widespread.


6.2 Recommendations for stakeholders

To combat greenwashing, stakeholders such as government agencies, NGOs, and companies need to collaborate and take action. Companies should adopt transparent and credible sustainability practices and promote independent third-party certifications. The government should introduce strict regulations and guidelines for environmental claims and eco-labeling. NGOs can educate consumers and create awareness about greenwashing practices.


1. Stakeholder Collaboration: Government agencies, NGOs, and companies should collaborate to combat greenwashing.

2. Adoption of Transparent Sustainability Practices: Companies should adopt transparent and credible sustainability practices. For e.g. The Carbon Trust in the United Kingdom provides independent certification and auditing of a company's environmental impact and sustainability practices. This certification allows companies to demonstrate to consumers that their products and services are genuinely sustainable and not simply greenwashed. The Carbon Trust also provides training and guidance to help companies improve their sustainability practices.

3. Provide incentives for Genuine Sustainability: Governments can provide incentives for companies that genuinely adopt sustainable practices. This can include tax breaks, subsidies, and grants for research and development of sustainable products and services. Eg- Govt of Sweden. 4. Introduce Strict Regulations and Guidelines: The government should establish strict regulations and guidelines for environmental claims and eco-labeling. 5. Consumer Education: NGOs and governments should educate consumers on how to identify greenwashing and make informed decisions. This could be done through awareness campaigns, labeling schemes, and other forms of educational material. Eg- The European Union has implemented an Eco-labeling scheme that provides consumers with clear and easily recognizable labels for environmentally friendly products. This labeling scheme helps consumers make informed decisions about the products they buy and encourages companies to improve their sustainability practices. 6. Incentives for Genuine Sustainability: Governments can provide incentives such as tax breaks and subsidies for companies adopting sustainable practices. 7. Encourage Industry Standards: Governments should work with industry bodies to develop clear standards for environmentally friendly products and services.

8. Transparency and Independent Auditing: Companies should undergo independent auditing of their environmental impact and sustainability practices.

9. Improved Regulations: Establish and enforce stricter regulations to hold companies accountable for their environmental claims. Regulatory bodies should be empowered with more resources to monitor and penalize companies that engage in greenwashing practices. For e.g. A recent regulation by SEBI on green-debt security issuers is a step in the right direction. 10. Third-Party Certification: Encourage the use of third-party certifications based on rigorous criteria. These certifications should be based on rigorous and standardized criteria that are independently verified.

11. Transparent Reporting: Companies should disclose their environmental impact in a transparent and standardized manner. This could include regular reporting on their carbon footprint, water usage, and other environmental metrics.

12. Collaboration: Foster collaboration between companies, government, NGOs, and consumers to combat greenwashing. This could involve establishing industry-wide standards for environmental claims, sharing best practices, and fostering a culture of transparency and accountability. These recommendations aim to promote sustainable practices, educate consumers, enforce regulations, and foster collaboration to address the issue of greenwashing in India.


Meet The Thought Leader


Vamsi is a mentor at GGI, and has a diverse background that includes being a former McKinsey employee and a graduate of IIT Madras. He possesses a broad skill set encompassing strategy and operations, gained from his various roles and industry exposure.







Meet The Authors (GGI Fellows)


Shailja is a tech-obsessed, creative individual who's core expertise lies in Growth marketing and Product management. An Economics honors graduate, she has worked in multiple industries like research, e-commerce, retail-tech, mobility and Gaming. With an industry exposure of 9+ years, an entrepreneurial mindset forms the cornerstone of her thought process. She is currently leading Growth marketing at Zynga (Take-Two), one of the world’s leaders in online gaming. Working on some of the biggest global games, she is focusing on growth product strategy and leading cross functional projects. She is passionate about scaling mobile apps exponentially. While gaming has become her top industry easily over the past 9 years, she would love to work in the social change or finance sectors in future.



Raghav is currently working with Deloitte as an auditor and is a commerce graduate from University of Delhi. He has worked with some of the well known brands in the Consumer Industry and is passionate about the future of consumers. Raghav has played cricket at National Level, enjoys cooking and watching films.








Varshini graduated with a degree in Economics and went on to complete her Masters in Education Policy and International Development from the University of Warwick, where she worked with the Association of Commonwealth Universities, a government organization based in London. Currently, she works as a corporate associate consultant at Sattva Consulting.

She is extremely passionate and driven to address issues in the education sector at the macro level through proper governance and measurable impact. She believes the opportunity and exposure this fellowship will give would help achieve her goals both on the professional and personal front.


If you are interested in applying to GGI's Impact Fellowship program, you can access our application link here.

 

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