Greenwashing guidelines likely spark class action suits against firms: Experts

livemint.com:

Subscribe to enjoy similar stories. Increasingly aware Indian consumers are set to use new greenwashing guidelines to launch class action lawsuits against companies for flouting ESG— environmental, social and governance—norms, experts said. A class action is a legal mechanism that allows a group of people with a common grievance to file a single case against a party rather than separate lawsuits.

It can be used for such things as reversing illegal activities, stopping harmful decisions or demanding compensation for damages. “There will be a gradual rise in class action lawsuits as an effective way for consumers to tackle greenwashing," said Shruti Khanijow, partner at Shardul Amarchand Mangaldas. Khanijow said these guidelines set clear rules for companies on environmental claims and mandate that they substantiate their statements.

With increasing consumer awareness, it will become easier to hold companies accountable. Greenwashing is a marketing strategy in which companies falsely claim or exaggerate environmental benefits of their products or services. They often use vague terms like “natural," “eco-friendly," or “green" without credible evidence to support these claims.

Greenwashing not only misleads consumers but also undermines authentic environmental initiatives, damaging consumer trust and distracting from genuinely sustainable products. To combat misleading environmental claims by companies, the Central Consumer Protection Authority issued new guidelines on 15 October. These guidelines regulate deceptive environmental claims in advertisements and promote transparency.