In the new era of corporate social responsibility, it comes with no surprise that companies are using terms like ‘closing the loop’, ‘sustainability’, ‘conscious choice’ etc. to promote their products further. With this comes the fact that most of the time companies do claim to be environmentally friendly when in reality they are not. This is where the concept of greenwashing takes birth. Greenwashing is a recently popular concept wherein organisations claim that their clothing is sustainable and charge customers extra for it, while in reality, the clothing is not sustainable. The fashion houses, basically, exploit our collective climate guilt to make profits.
Now comes the part, why did the brand go ahead with the claim? Were they really interested in making a sustainable collection? Do they really feel responsible towards the environment or was it just to merely make profits? To answer these questions, we will have to thoroughly understand the concept of corporate social responsibility and society’s change concern towards the climate by the way of a recent lawsuit filed against the H&M brand.
In a recent lawsuit filed in American court by Chelsea Commodore against H&M, a popular Swedish fashion brand, the plaintiff claimed that the fashion brand came out with a “Conscious collection” wherein they claimed that the clothes in this collection are sustainable and do not harm the environment. They also claimed that their collection uses almost 20 per cent less water than other collections. In the lawsuit, the plaintiff claimed that all these claims are false and this collection is more harmful to the environment than other collections. The lawsuit can very well be seen as a watershed occasion in the fashion industry.
In the above discussion, I would like to point out that greenwashing is not relatively a new term. But, only in the coming years has it gained importance. Coming as to why would brands play such tricks. Well, the answer is simple, to earn more profits. In the present case, the lawsuit stated that the plaintiff spent more money to buy sustainable clothing. Why would we do that? It is because of our guilt and wants to do something for the environment. Climate destruction has gained importance only in recent years and so our inner self compels us to do something for the environment hence, more often than not, we find ourselves trapped in these mimics.
Coming to the law aspect of this case, the court is yet to decide but what concerns us the most is that in India, we practically have no law or regulation in place for greenwashing. Seeing how fast this trend is expanding, it is quite alarming how we still have no law or proper precedent for it. If we were waiting for a wake-up call then this is exactly the time when we should think about it carefully.
THE CASE AND WHAT WE NEED TO LEARN:
The whole strategy employed by H&M and numerous other businesses to give its company that feel-good, environmentally-friendly impression is known as “greenwashing.” In the present case of Chelsea Commodore, despite the fact that this action concerns the cost of the article, its claims in the suit follow as the biggest hits of all the criticisms of the international fashion business as well as its unfulfilled reformation pledges by the fashion houses. The method, which was afterwards minimised as a “technical error,” mainly involved disregarding the “minus” sign in the index values: for instance, when an article of clothing seems to have a water usage score of -20 per cent, it indicates that the garment utilizes twenty per cent more water than the norm, while H&M recorded the contrary, i.e., twenty per cent lower usage. Following the H&M case, the UK’s Competition and Markets Authority (CMA) declared that it will look into statements made by Asos, Boohoo, and other fashion companies regarding the sustainability of their goods.
Greenwashing is an old concept but it, most often than not, goes unnoticed. Just like, right now in India, we do not have any legislation or precedent to deal with the problem of greenwashing. In case, you want to file a case against greenwashing, in India, you do not have a proper route to go through. Although, SEBI has made a board come out with new guidelines. It is anticipated that the board will include the guidelines and appropriate measures for greenwashing. Due to the lack of unified regulation, third-party certificates as well as rankings are becoming important elements for numerous firms that they use in order to build confidence amongst consumers as well as shareholders, evaluate and quantify existing environmental attributes, and lead companies along the respective sustainability journeys.
As already discussed, there is no proper recourse in India to take in case of greenwashing. But, one can sort some relief under the consumer protection act and contract law. Indian contracts act, 1872, section 18 says that in case of misrepresentation of facts, consent is considered as free will, no matter how innocently the fault was made. In case of misrepresentation, the aggrieved party can very well seek damage. In the case of Richview Construction Co v. Raspa, the vendor claimed that its entire quantity had been thoroughly maintained during negotiations concerning the selling of the lamps, but the court granted compensation for the claim violation because it was untrue. In the same way, if a fashion house claims that its clothing is sustainable and charges more for the same whilst exploiting our climate guilt, the contract can be made voidable. Although it does not specify greenwashing per se it is one route which can be taken in future if no proper law is made in India.
The Department of Consumer Affairs’ Central Consumer Protection Authority (CCPA) has issued “Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022” with the aim of reducing deceptive advertising as well as safeguarding customers who might be taken advantage of or harmed by these commercials. The rules were designed to protect customers from getting duped by unsupported assertions, inflated claims, incorrect facts, and overstated assets. These commercials infringe on a number of consumer rights, including the right to information, the right to make educated decisions, and the right to protection from possibly dangerous goods or activities. Against every false advertising, the CCPA has the power to fine producers, marketers, or brand ambassadors up to ten lakh rupees. The CCPA has the authority to levy fines of up to Fifty lakh rupees for successive violations. For a period of up to one year, and consecutive violations, for a period of up to three years, the authorities may forbid a sponsor of false advertising from offering any further endorsements.
Although the case of greenwashing may involve zillions of dollars yet this is the legislation we have till now. The peace is in the fact that SEBI is working on issuing new guidelines and specifically including greenwashing in the guidelines. What remains to be seen is the penalty and the procedure with which it will resolve this issue. H&M had made some positive changes like their garment collection program but its effectiveness remains in question. In addition to focusing on responsible production, manufacturers ought to concentrate on mending worn-out clothing using contemporary washing processes. The quickest manner to operate on sustainable development is to initially prevent new manufacturing as well as expand into the circularity and regeneration of old garments, re-washing old apparel, trying to encourage more recyclable materials of plastic into attempting to make accessories, and above all else, begin to work on changing consumer mindsets to one of wear and repeat.
Then, truly and actually, the concept of sustainability will be a true success and not some mimic to extract more money. That being said, it is equally as important to have proper legislation in order to demotivate this behaviour. It is only a hope, for now, that proper legislation comes into place before we feel sorry for not having one.
Author(s) Name: Aanvee Aggrwal (National Law University, Odisha)