Deception of Greenwashing

Today, the young consumer’s expectations from the brands they buy are beyond good quality products.   The millennials globally expect brands to do good in the world.   The consumers hope that the brands resonate with their values and care about the environment, produce products responsibly without harming natural resources, and at the same time uplift the communities.  And they aren’t afraid to call for brand boycotts as part of the modern cancel culture. Therefore, the companies make every effort to align their brands with the consumer’s expectations.   Sadly, some of these efforts are not genuine.

It is dangerous when the companies pretend to be eco-friendly, green, natural, or sustainable and greenwash their brands to look good before the consumers.    Increasingly, the markets are flooded with brands positioning themselves as caring about the environment, whereas in actual they don’t.  They are merely taking advantage of the changing consumer behavior and green marketing their products to push their sales.     E.g. in the pretext of recycling, the companies offer a discount on the number of plastic jars they bring back, which could well be their one year’s consumption.     Such discounts and offers help the brands lure consumers into buying more, the incentive being to be environment-friendly. In contrast, it only boosts the company’s sales and generates more plastic for the planet, let alone the carbon footprint of producing more goods.  The regulations in such cases must require companies promoting any schemes to disclose how they would recycle the extra plastic containers.

There are many examples in the FMCG and textile industry, where the brands claim to promote circular economies without substantiating how they would achieve the results—for example, asking consumers to give their old clothes to claim discounts. Thus, it may encourage consumers to buy and hoard more and free any guilt towards the environment, which can be counterproductive.  Instead, if the brands invest in creating consumer awareness on the sustainability challenges they face and involve them in their journey, it can help bring a real change.

The green bandwagon is getting crowded and confusing for the consumer who is being made to believe that by following practices promoted by certain brands, they are genuinely helping the environment, whereas they may not.  The over-promotion of green marketing can result in consumers losing trust even in the companies genuinely doing good for society.  Unfortunately, if unchecked, would have lost a potent tool for generating environmental improvements.    Greenwashing can have profound adverse effects on consumer and investor confidence in green products and environmentally responsible firms, making these stakeholders reluctant to reward companies for environmentally friendly performance.

Currently, there are no specific regulations under trademark laws or environmental laws to address greenwashing in India.    The Indian courts have ruled in some comparative advertising cases, holding that the producers must make legitimate claims in their advertisements and not mislead the consumer.    The Advertising Standards Council of India (ASCI), an independent body responsible for self-regulation in advertising by its members and ensuring the protection of the interest of consumers requires advertisements conform to its Code for Self-Regulation. Thus, as per regulation, advertisements should be legal, decent, honest and truthful, and not hazardous or harmful while observing fairness in competition.    Although, greenwashing claims can be covered under the ASCI guidelines of false advertisement claims not supported by evidence.   However, clear guidelines on green advertising or environmental claims would help address the issue and discourage companies from making such claims while retaining consumer confidence.

Overall, time is short, and India is committed to fulfilling sustainable Development Goals set up by United Nations by 2030. Thus, it is more crucial than ever before that the companies:

1. are made accountable to disclose their ESG (Environment, Social, governance) performance in their account books.  The requirement needs to be made mandatory for all registered companies.
2. On similar lines of food labels, the companies are asked to explain their eco-labels in detail
3. ASCI issues specific guidelines on types of advertising and promotions considered for violation of greenwashing
4. Green guide for consumers to understand the terminology

Conclusion

The brands need to understand that consumers today look for authenticity.    While green marketing may help them win business quickly, there is a potential risk of the brand boycott by the consumer.  Companies need to take their corporate social responsibility seriously and engage the consumers to join their journey of building a truly greener and inclusive future.

Author Profiles:

Ranjan Narula
Managing Partner
RNA, Technology and IP Attorneys
Board Member, International Trademark Association (INTA)

Ranjan founded the specialist IP law firm, RNA, in 2004, and is now its Managing Partner. He has twenty seven years’ post qualification experience working on contentious and non-contentious IP and Technology issues. Ranjan has been practicing as an advocate and patent attorney since 1991 handling a wide range of IP, IT and Technology matters including IP management issues, strategic advice on IP clearance, acquisition, and enforcement. Ranjan has worked in-house and in private practice including a stint with international IP practice heading its India operations. In 2019, Ranjan was invited to join the INTA, Board of Directors.

Ranjan has been ranked as a leading IP practitioner by various publications including WTR 1000, IP Star (Managing IP), WIPR leaders, Who’s Who legal, Asia IP experts and others. Ranjan is regularly invited to speak by Universities and chamber of commerce on IP issues. He has authored several articles and papers on key IP issues that are published by IP magazines and blogs such as IAM, World Trade Mark Review, Bloomberg, Lexology, IP Kat etc.

Rachna Bakhru
Partner
RNA IP Attorneys

Rachna is a Partner with RNA, Technology and IP Attorneys. She qualified as a Science graduate from Delhi University, followed by a Diploma in Business Administration and Bachelors Degree in Law from Delhi University. She currently heads the Dispute Resolution team of the firm, heavily involved in IP enforcement work including civil and criminal litigation.

She has over 20 years of extensive experience in managing IP matters in India. She has worked on portfolios of large international companies and her industry expertise includes Pharmaceuticals and Information technology. She advises her clients on issues related to data protection, software piracy, domain disputes and online infringement.

Rachna is a member of the Bar Council of India and a registered Patent Agent. She is appointed as a Patent Facilitator by the Indian govt. to help startups obtain patent protection. She is also the Chair for INTA’s Unreal Campaign sub-committee for the Middle East, Africa and South Asia.