Greenwashing: Definition, Types, Examples, Challenges, India’s Situation & Measures

Why in News ?

• Recently, several major corporations and financial institutions have been accused of falsely advertising their products and policies as “eco-friendly” while their actual practices harm the environment.
• This deceptive practice is known as Greenwashing.

Definition of Greenwashing

• When a company, institution, or government makes misleading claims about their product, service, or policy being environmentally friendly — while in reality, those claims are false or exaggerated — it is termed Greenwashing.

Etymology:

• “Green” = environment or nature
• “Whitewashing” = concealing wrongdoing
  
  • Thus, Greenwashing literally means “deceptive promotion in the name of the environment.”

Types of Greenwashing

1. Misleading Labels – Using vague or false tags such as “100% Natural,” “Eco-friendly,” “Green Product” without any credible proof.
2. Hidden Trade-offs – Highlighting one small “green” feature while ignoring the product’s other environmentally harmful aspects.
3. Irrelevant Claims –Example: Labeling products “CFC-free” even though CFCs are already banned globally.
4. False Certification – Using fake eco-labels or green badges to mislead consumers.
5. Selective Disclosure – Revealing only the positive data while hiding negative environmental impacts.

Examples of Greenwashing

1. False Advertising:
   • Oil companies like BP and Shell advertise “net-zero” goals while continuing heavy fossil fuel dependence.
2. Fashion Industry:
   • Brands claim “sustainable fashion” but use synthetic microfibers that cause plastic pollution.
3. Financial Sector:
   • Several so-called “Green Bonds” or “Sustainable Funds” have been found investing in polluting industries.

Why Greenwashing is a Concern

Global Context

• UNEP and OECD have issued strict guidelines against greenwashing.
• The European Union’s Green Claims Directive requires companies to provide scientific evidence for all environmental claims.
• The UK Financial Conduct Authority (FCA) has introduced Sustainability Disclosure Requirements (SDR) to ensure transparency.

Greenwashing in India

1. Advertising Oversight:
   • The Advertising Standards Council of India (ASCI) issued new green claims guidelines in 2023 to prevent misleading eco-ads.
2. SEBI’s Intervention:
   • Under the Green Bonds Framework (2023), SEBI clarified that false or misleading green labels will attract penalties.
3. Corporate Reporting:
   • Companies must ensure transparency in ESG (Environmental, Social, and Governance) disclosures.

Measures to Curb Greenwashing

Conclusion

Greenwashing undermines genuine environmental efforts and misleads both consumers and investors. For India, where sustainability is central to economic and developmental policy, enforcing stricter transparency, accountability, and certification mechanisms is crucial to ensure that “green” truly means sustainable and responsible.