Are you a starry-eyed consumer mesmerized by “organic,” “eco-friendly,” and “100% green” labels? Has India advanced to such a level that the producers have adopted green ways of production in such a short time? Are they reliable? Can I believe the printed claims completely? Pause before grabbing that “natural” labeled product and ask yourself: is it true green or just clever greenwashing?
While India’s ESG (environment, social, and governance) journey is in its early stages, with regulations just starting to roll out, global developments like the EU’s Green Claims Directive are setting new standards. This is significant considering India has a sizeable export community that caters to the European market. India is one of the key exporters to almost all major economies in the world.
Europe has been leading the way when it comes to the implementation of climate / environmental regulations. The latest from their stable is the green claims directive. In other words, it is a clear step towards truly clubbing the greenwashing.
The latest in this regard is MEPs (members of the European Parliament) voting in favor of the Green Claims Directive on 17th 17, 2024. As per the new norm:
i) Carbon Offsetting is Out: companies will not be able to do carbon offsetting and claim green which includes- the use of terms such as “environmentally friendly”, “natural”, “biodegradable”, “climate neutral” or “eco”.
ii) Vague Claims Get the Boot – Claims must be backed by verified certifications.
The new law was formulated based on the concerns of the practices followed by companies widely using carbon offsetting schemes to justify labeling products “carbon neutral”, or imply that consumers can fly, buy new clothes, or eat certain foods without making the climate crisis worse.
The proposed green directive adopted by the European Commission in March 2023 became law in January 2024. This will be rolled out in 2026, giving buffer time to follow suit. As a first step in 2022, the European Commission adopted the proposal for a Directive on Empowering Consumers for the Green Transition.
According to the European Commission, “53% of green claims give vague, misleading, or unfounded information; 40% of claims have no supporting evidence; and half of all green labels offer weak or non-existent verification. There are 230 sustainability labels and 100 green energy labels in the EU, with vastly different levels of transparency.”
What does it mean to Indian exporters, in one word, calls for a course correction? Europe’s stringent standards create a clear roadmap for responsible production and sustainable practices. By aligning with these global norms, Indian companies can gain a competitive edge and build trust with eco-conscious consumers worldwide.
The stringent global norms also create a structure, thus setting the stage for other countries like India for a smoother transition. The transition can be strengthened with clear, enforceable regulations and robust third-party certification.
It is prudent to say that it is time for Indian businesses to shift from empty green claims to real action. Let’s embrace transparent sustainability practices, not just for exports but for the future of our environment.