Climate Washing Litigations: India Inc. Must Pay Attention To Its Climate Claims

Climate litigation has grown in numbers, variety, and jurisdictional spread since 2015. According to the Sabin Center for Climate Change Law of Columbia University, each of the last five years saw more than 200 climate cases filed, with at least 230 new cases in 2023. Climate litigation involving government action has dominated the field all along. However, cases involving corporates jumped to 40% among cases filed outside the US, according to Grantham Research Institute. Cases against corporates covered climate washing (a form of green washing), polluter-pays, corporate climate framework-related, and transition risk governance-related. Among these, the one category that is steadily growing and more successful is climate washing, a form of green washing. In 2023, 47 climate washing cases were filed. 

Climate washing cases often involve misleading claims about products or services, using terms such as carbon neutral, climate neutral, net zero, and deforestation-free. Many such cases involve the use of carbon offsets. Delta Airlines was sued over its ‘carbon neutral’ claims by consumers concerned about the additionality and permanence of forest-based carbon credits used. Fossielvrij NL, a Dutch environmental organisation, sued KLM for its ‘Fly Responsibly’ advertisement campaign, where customers could purchase carbon offsets labelled ‘CO2ZERO’, for misleading consumers to believe that they can fly sustainably. 

India has been credited with 13 climate cases in the Sabin database. That includes the M.K. Ranjitsinh et. al. case. The Grantham Research Institute has quoted the recent revision order in this case by the Supreme Court of India as an example of green vs green cases, where one green measure (protection of the Great Indian Bustard) is pitted against another (climate action: overhead power lines for expansion of renewable power). However, India still does not have a climate washing or green washing case.

But that may be set to change with Indian regulators having defined green washing. The Securities and Exchange Board of India has defined green washing as "making false, misleading, unsubstantiated, or otherwise incomplete claims about the sustainability of a product, service, or business operation" in its circular related to green debt securities dated Feb. 3, 2023. Advertising Standards Council of India, in its Guidelines for Advertisements Making Environmental/Green Claims, provides a similar definition: "Greenwashing refers to unsubstantiated, false, deceptive, misleading environmental claims about products, services, processes, brands or operations as a whole, or claims that omit or hide information, to give the impression that they are less harmful or more beneficial to the environment than they actually are." In its Draft Guidelines for Prevention and Regulation of Green Washing, the Central Consumer Protection Authority has defined green washing to include (i) any deceptive or misleading practice, which includes concealing, omitting, or hiding relevant information, by exaggerating, making vague, false, or unsubstantiated environmental claims, (ii) use of misleading words, symbols, or imagery, placing emphasis on positive environmental aspects while downplaying or concealing harmful attributes, but shall not include (i) usenotif of obvious hyperboles, puffery, or (ii) the use of generic color schemes or pictures; either not amounting to any deceptive or misleading practice. 

Corporate India is less likely to be targeted with polluter-pays type cases linked to their CO2 emissions, although they may pay a price for such emissions in the form of carbon tax or other forms of carbon price. However, attempts to ride the climate-hero bandwagon can leave them vulnerable to public allegations of green washing or even litigation. Considering that 180 Indian companies have already set or are committed to set Science Based Targets and 19 of them have set net zero targets, their disclosures and public claims about such targets and progress towards the targets could easily slip into the territory of green washing. With anti-green washing regulations firming up, corporate India must pay special attention to environmental/climate claims they make. 

Bose Varghese is senior director, environmental, social, and governance at Cyril Amarchand Mangaldas.

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