The Enforcement of The Eco Mark Certification Legal Framework in India and Its Impact On Companies' Growth Through Greenwashing Practices
The Enforcement of The Eco Mark Certification Legal Framework in India and Its Impact On Companies' Growth Through Greenwashing Practices
ABSTRACT
In recent years, the increasing demand for environmentally sustainable products has led
companies to market their goods as eco-friendly to gain consumer trust and market
advantage. However, the rise of greenwashing, the practice of falsely claiming environmental
responsibility, has raised serious concerns about the authenticity of such claims and the
effectiveness of regulatory mechanisms in place to address them. This study critically
examines the Eco Mark Certification legal framework in India, assessing its role in ensuring
environmental compliance and preventing deceptive green marketing. It further explores how
greenwashing influences stakeholders, distorts market behaviour, and impacts corporate
growth both positively and negatively. This study aims to identify regulatory gaps and
evaluate the enforcement of existing laws. The research tests the hypothesis that the current
Indian legal framework for eco-labelling is insufficient to curb greenwashing practices,
thereby calling for stronger legislative and institutional reforms.
INTRODUCTION
Environmental sustainability has emerged as a critical concern globally, driving both
consumers and corporations toward eco-conscious practices. In this context, eco-labelling
schemes like the Eco Mark Certification in India aim to identify and promote products with
minimal environmental impact. Introduced in 1991 and recently revised through the Eco
Mark Rules, 2024, this certification serves as a tool for environmental governance and
sustainable consumption. However, the growing trend of greenwashing, where companies
Greenwashing not only undermines consumer trust but also skews market competition and
impedes genuine sustainability efforts. It affects a wide range of stakeholders, including
consumers, regulatory bodies, investors, and environmental groups, while also influencing
the trajectory of business growth through either short-term gains or long-term reputational
risks. This paper aims to explore the relationship between greenwashing and the existing Eco
Mark legal framework, examining whether current enforcement measures in India are robust
enough to prevent deceptive environmental claims. This study focuses on three key
objectives: to analyze the structure and enforcement of the Eco Mark Certification framework
in India; to assess the impact of greenwashing on corporate growth; and to evaluate the
sufficiency of existing Indian legal mechanisms in addressing greenwashing practices. This
research falls under the purview of doctrinal study, whereas the researcher has relied on
Primary sources such as Legal rules, schemes, and Acts, and Secondary Sources such as
Articles, Journals, and Books on the subject matter. The study hypothesizes that the Indian
Legal Framework on Eco Mark Certification is ineffective in preventing greenwashing.
Evolution of Greenwashing
Greenwashing evolved along with industrialization and the necessity to attract stakeholders to
purchase the products and services that are proclaimed to meet the environmental credentials
rendered by the companies. At the beginning of the industrialization era, the developed
countries took great advantage of their dominating position to exploit the environment by
polluting and depleting its resources. The severe increase in the industry's carbon emissions
has affected the environment as a whole, thereby causing climate change. This has made
several countries come forward to take initiatives to protect the environment. The Stockholm
Declaration of 1972 was one such important convention that laid down for the first time the
need to protect and promote the environment. Thereby, the pressure was shifted on both the
Government and the Industries/Companies/Organisations to adopt measures to protect and
promote the environment. The growing concern among stakeholders to purchase and use
environmentally friendly products prompted many organisations to engage in unethical and
deceitful practices.[2]
The existence started in the 1980s when the phrase "greenwashing" was used to characterize
ludicrous environmental claims made by corporations. Environmentalist Jay Westerveld used
the term "greenwashing" for the first time in 1986, which is also known as "green sheen".
Greenwashing is a marketing spin in which Green PR (Public Relations) and Green
marketing are employed to dishonestly convince the public that a company's goals, policies,
and goods are environmentally friendly. An organization engages in greenwashing when it
devotes a disproportionate number of resources to promoting its "green" credentials rather
than implementing ecologically responsible practices. Greenwashing is the practice of
renaming or labelling a product to make it seem more natural or eco-friendly, but in reality, it
would harm the environment to the core. Presenting non-environmentally or climate-friendly
products as environmentally or climate-friendly is known as "greenwashing." This is a
problem in many countries. Greenwashing serves to mask corporate ambitions and policies
that are not sustainable. It has gained popularity due to widely reported accusations from
several sectors of the industry. It is a tactic several businesses use to enhance public
perception of their brands. In response to customer demand for environmentally friendly
products and services, there has been a rise in "greenwashing” due to which the stakeholders
are made victim to misleading advertisements which thereby affects the reputation and profit
of such companies. The main goals of greenwashing are profit maximization and projecting a
corporation as environmentally conscious. It is accomplished by launching a product that
satisfies the innate consumer need for environmentally friendly goods. “Sustainable”, “Eco-
Friendly”, “Ethical”, and “Eco-Conscious” are the words frequently used in corporate
marketing to mislead consumers into believing the products are environmentally friendly as
authorized by these organizations. But not all businesses engage in greenwashing; many
organisations actively participate in promoting the environment rather than falsely advertising
their products as eco-friendly.[3]
In the era of corporate social responsibility (CSR), companies' priorities must extend beyond
shareholder value, investment return, and profit. Organizations now require a strong social
and environmental performance, sometimes known as the "triple-bottom-line" or
"people/planet/profit" performance review,[4] Organizations are expected to limit the adverse
aspects of their business as much as possible and to make positive societal contributions.
Carroll,[5] developed a four-layered "pyramid of social responsibilities" to encapsulate these
expectations. The pyramid base represents economic responsibilities, which directly affect an
organization’s viability. The next layer represents the Legal responsibilities, which state that
organizations must abide by laws and regulations. Another layer symbolizes ethical
responsibilities—behaviours that are recognized as moral and just but are not codified into
laws and regulations. The pyramid’s uppermost tier depicts philanthropic responsibilities,
which involve making further contributions to society or humankind. Companies follow these
CSR policies for 4 basic motives: To contribute to society, to generate Financial or other
benefits, to meet social expectations, and to reduce stakeholder pressure. Further, the
implementation of these CSR Initiatives has various benefits, whereby the reputation, brand
value, consumer purchase, and loyalty increase.[6]
Impact on Stakeholders
Consumers
The experience of a consumer with a company's product or service is adversely affected due
to greenwashing. Nowadays, customers are more conscious than ever about greenwashing.
Additionally, customers are more inclined to select goods and services from businesses that
they believe to be truthful and open about their environmental policies. A company's
reputation can suffer greatly if it is exposed to greenwashing. Customers can feel deceived
and duped, and they might be less inclined to believe in the business, which adversely affects
sales and client loyalty. The negative news affects the company's growth in many ways. Due
to the increased use of social media platforms, this news about greenwashing spreads across
the country, thereby deterring other potential consumers from purchasing the products or
services and breaking the trust of the company. Further, this damage may extend even after
the companies have formally apologized or modified their CSR initiative. Further, it has a
devastating impact on consumer trust, where it could easily lead to a Decline in sales, a
Switch of the consumer to Competitors, Damage to the company’s reputation, and severe
Regulatory Scrutiny which may result in heavy compensation or worse scenario a black mark
or prohibition to sale or render any goods or services.[8]
Investors
The greenwashing has a devastating effect on the Investors, who serve as another backbone
of the company. The investors are affected when the company’s sustainable goals are
misleading and are not implemented. The sustainable goals are challenged when there are
inconsistent disclosures, omissions of key information regarding the sustainability goals or
strategy, unsubstantiated sustainability claims, or undue emphasis on certain features that
could appear to exaggerate the actual sustainability characteristics of a fund. Greenwashing is
a major concern in the investment management industry. It can erode the trust and confidence
in the investment industry. Additionally, it may lead to investors misallocating funds to
schemes or goods that conflict with their financial objectives. 4 important factors damage the
trust of the investors: Omission to implement the CSR environmentally sustainable claims,
unsubstantiated claims, inconsistency between fund materials, and exaggeration.[9]
The failure to disclose any important information, such as investment strategy and
investment details, would lead to omission.
Unsubstantiated claim means any claim made without appropriate evidence to prove its
existential value.
Inconsistency in any information regarding the Environmental claim or standards
Exaggeration of the environmental goals or fund claims.
Further companies with a greenwashing history and on which severe regulatory enforcement
actions had been taken would be disinvested by their investors, and their present partnership
or future potential partnership would be terminated or reduced.[10]
Environment
Greenwashing may also negatively affect the environment in several ways. Customers are
more prone to make environmentally destructive decisions when they are misinformed about
how goods and services will affect the environment. Additionally, greenwashing may result in
the production of goods and services that are not as ecologically friendly as they purport to
be. For instance, to minimize costs, a business that greenwashes its goods could employ less
environmentally friendly materials or production techniques.[11]
It could cause
Pollution due to non-environmentally friendly manufacturing processes, transportation,
and product disposal.
Depletion of natural resources like water, minerals, and forests
Biodiversity loss by damaging ecosystems and habitats - Greenwashing can be a
contributing factor to biodiversity loss.
Climate change by raising greenhouse gas emissions - greenwashing can harm the
climate.[12]
Companies Growth
Regulatory Action: The misleading environmental claims would invoke regulatory
enforcement action from the State’s Independent Authority. The Advertising Standards
Council of India (ASCI) and the Bureau of Indian Standards (BIS) are the main regulatory
agencies for Greenwashing in India.[13]
Legal Suit and Damages: Legal action and compensation not only affect the finances of the
company but also damage the reputation of the company.
conventions were adopted by the States. The Paris Agreement 2015, which fell under the
umbrella of UNFCCC (United Nations Framework Convention on Climate Change), focused
on several factors that were harming the Environment. It was predominantly against climate
change, which was the direct effect of the increased amount of carbon emissions by
Industrialization. Due to these Conventions, several Sustainable standards were laid down to
protect the environment and to repair the harm already caused. Due to the devastating change
in the climate, severe pollution, rise in sea levels, drought, food scarcity, and depletion of
resources, many countries raised their environmental standards thereby regulating
Companies, Industries, and organizations to reduce their impact on the environment.
Pressurized by these regulations, few organizations were able to abide by the standards and
make products or services that are environmentally friendly, but other organizations, to attract
more stakeholders and maximize their profit through domestic and international trade, had
deliberately engaged in Greenwashing thereby making false environmental claims.[14]
To regulate these unethical practices, many countries such as the USA and European Union,
have laid down their standard of legal frameworks. However, these standards were
implemented in India only after the 19th Century.
Legal Frameworks
The Advertising Standards Council Of India (ASCI)
Since its founding in 1985, ASCI has worked to promote self-regulation in advertising,
safeguarding consumer interests while being fair to the advertising industry. The 4 sectors
that are responsible for the formation of ASCI are Advertisers, Advertising Agencies, Media
and PR Agencies & Market Research Companies, etc. The ASCI is a voluntary self-
regulation council, that functions as a watchdog for advertisements to meet certain standards.
The main purpose of this code is to control the content of advertisements. However, it is not a
government body and it cannot formulate any rules for the public or such relevant industries.
As it has been formed by the advertisers, their agency, and business organizations it can only
self-regulate the ethical standard of such advertisements evolving in such sectors. The ASCI
has no enforcement mechanism, it cannot punish or issue sanctions like the government
enforcement agency, however, it can only look into the complaint and self-regulate the
violation of its code by way of directing the removal or modification of such advertisements,
issue guidelines and codes for maintaining the standard of the advertisements. The
companies that advertise must provide scientific evidence to support any environmental
claims made by them in their advertisements,[15]
Third-Party Certification
The phrase "third-party certification" is broad and can refer to different types of processes,
standards, or organizations that verify or evaluate the quality, performance, or compliance of
a product, service, or system. Third-party certification has been widely regarded as a vital
means of regulating greenwash, however, it has a limited approach to curbing it completely.
“Verifying a product, service, or organization's environmental or social claims by an
impartial, reliable third party is known as a third-party certification”. It can assist investors
and consumers in making wise decisions and preventing themselves from falling for
greenwashing. Third-party certifications have taken over the role of several self-regulatory
bodies due to their inability to create and implement sustainable environmental management
standards effectively or efficiently. A major hindrance to the effective performance of these
third-party certifications is that they are not given by the Government but by the private
sector, which paves the way for corruption or ineffectiveness of standards.[18]
Eco Mark Certification Act, 2023: Draft Framework for Eco-Labelling and
Sustainable Consumption
The Ecomark Certification Act, 2023 refers to a draft notification released by the Ministry of
Environment, Forest and Climate Change (MoEF&CC) on 11th October 2023. This draft
outlines a regulatory framework for the development and implementation of the Eco mark
certification scheme, which is intended to label products that exhibit reduced environmental
impact while simultaneously meeting established quality standards in accordance with Indian
norms. The proposed scheme aims to promote the adoption of environmentally friendly
products by consumers, support the government’s Lifestyle for Environment (LiFE) initiative,
and facilitate manufacturers’ transition to sustainable production methods. The overarching
goal is to contribute meaningfully to sustainability objectives and foster a circular economy.
The key features of the Draft Notification are:
Certification Procedure: Manufacturers are required to submit applications to the
Central Pollution Control Board (CPCB), along with relevant documentation. The CPCB
is tasked with verifying whether the products meet the eco-labelling criteria prior to
issuing or renewing certification.
Environmental Criteria: The environmental standards for various products or product
categories will be determined and notified by the Central Government. These criteria will
evaluate the environmental performance of products based on several parameters,
including pollution potential, waste management practices, emission levels, energy
efficiency, and recyclability.
Compliance with Quality Standards: In addition to meeting environmental benchmarks,
products must also conform to applicable quality and safety standards, including Quality
Control Orders (QCOs) and relevant national or international norms.
Monitoring and Enforcement: The CPCB, along with accredited third-party agencies,
will conduct market surveillance to ensure ongoing compliance with the certification
standards. The framework includes provisions for penalizing entities found to be
engaging in fraudulent or non-compliant practices, thus safeguarding the integrity of the
scheme.
The draft Eco Mark Certification Act, 2023, represents a notable advancement in India’s
environmental policy framework. It seeks to institutionalize eco-labelling through a formal
certification process that aligns environmental integrity with quality assurance. By fostering
sustainable production and consumption patterns, the draft regulation is poised to contribute
significantly to India's environmental goals and its broader commitment to sustainable
development. However it has not been passed by the Parliament and was finalized and
notified as Eco Mark Rules, 2024, which replaced 1991 Eco Mark Scheme.[19]
The Ministry of Environment, Forest and Climate Change (MoEF&CC) is the nodal agency
for this eco-labelling initiative, while the operational responsibilities lie with the BIS. The
primary objective of the Eco mark scheme is to recognize products that are environmentally
friendly throughout their lifecycle and to provide a credible symbol that enables consumers to
make informed choices. Under this scheme, manufacturers of products falling under specified
categories can apply for certification, provided their products comply with the defined
environmental standards. BIS oversees the testing and certification process, which includes
inspecting facilities and analyzing product samples to ensure compliance. Upon satisfactory
evaluation, BIS grants a license to use the Eco mark, which remains valid for a stipulated
period and is subject to renewal, suspension, or cancellation based on continued compliance.
All procedures are governed by the BIS Act of 2016 and its associated regulations. For
products that already possess the Indian Standards mark, BIS aims to complete the
certification process within approximately three months. Reassessment and license renewal
are required after the expiry of the initial certification period, with applicable fees. Despite its
intent to empower environmentally conscious consumers, the effectiveness of the Eco mark
scheme has been challenged by issues such as limited public awareness and inadequate
regulatory enforcement. These shortcomings have facilitated "greenwashing," where
corporations falsely advertise their products as environmentally beneficial. As with similar
voluntary and market-based ecolabelling initiatives adopted globally, the success of the Eco
mark program depends on robust implementation, transparency, and consumer education.[20]
Eco mark is a certification mark granted by the Bureau of Indian Standards (BIS), India’s
national standards body. It is awarded to products that comply with specific criteria designed
to limit their adverse impact on the environment. The Eco Mark scheme functions as an eco-
labelling initiative that distinguishes products with reduced environmental footprints. It
serves to encourage sustainable consumption patterns, enhance environmental awareness, and
mitigate the risk of misleading environmental claims. The primary objectives of the Eco mark
Rules are to promote environmental consciousness among consumers, to encourage
producers to manufacture environmentally certified goods, and to prevent the misuse or
misrepresentation of the Eco mark label. Ultimately, the rules aim to foster sustainable
behavioural patterns and responsible consumption habits in alignment with national and
international environmental goals.[23]
The environmental criteria for awarding the Eco mark are to be defined by the Central
Government. These standards will encompass both general environmental considerations and
product-specific requirements. To qualify for Eco mark certification, a product must
demonstrate substantially reduced potential for pollution, enhanced recyclability,
conservation of non-renewable resources, and other sustainability-oriented features.
Additionally, the product must conform to existing quality and safety benchmarks and
comply with applicable Quality Control Orders. The administration of the Eco mark Rules
will be overseen by the Central Government through the establishment of a Steering
Committee. This committee will include representatives from relevant ministries, regulatory
bodies, and other key stakeholders. Its functions will include the development and approval
of implementation frameworks, the identification of product categories for inclusion under
the scheme, and the monitoring of policy execution.[24]
The Central Pollution Control Board (CPCB) has been designated as the Eco Mark
Administrator. It will be responsible for the operational implementation of the rules,
including the formulation of certification guidelines, the selection of eligible product
categories, the registration of Designated Eco mark Verifiers (DEVs), and the issuance,
renewal, and monitoring of Eco mark certificates.[25]
The Eco Mark Certification Rules, 2024, establish a structured regulatory framework aimed
at promoting the production and consumption of environmentally sustainable products in
India. By aligning with global sustainability standards and integrating with the Green Credit
framework, these rules offer a significant step forward in reducing the environmental impact
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