Why Indian Businesses Must Take Greenwashing Seriously
Sustainability isn’t just a brand strategy any more. It’s becoming core to how companies are judged by regulators, investors, and customers alike. But as climate narratives go mainstream, we’re also seeing a surge in greenwashing: misleading or exaggerated claims about environmental performance. And in India, with increasing regulatory scrutiny and mandatory ESG disclosures, the risks of greenwashing are no longer hypothetical.
In this article we will dive into :
What greenwashing really is
Where Indian companies can go wrong
What are the regulations around greenwashing
How to avoid mistakes and build credibility with data
What is Greenwashing ?
Greenwashing is when a business makes environmental claims that are inaccurate, vague, or unsubstantiated. It can show up in advertising, packaging, product design, investor presentations or even formal sustainability reports. Some greenwashing is deliberate. But often, it's unintentional: businesses may overstate their impact, or fail to present a full picture, either due to weak data or poor understanding of what qualifies as “green.”
Examples include calling a product “eco-friendly” without explaining how, reporting emission reductions without audit-ready documentation, highlighting one green initiative while ignoring larger carbon-intensive operations.
Why Greenwashing is becoming a Legal and Business Risk in India
The bar is rising. Here’s how Indian policy is clamping down on greenwashing:
SEBI’s BRSR Mandate : Top 1,000 listed companies must now submit a Business Responsibility and Sustainability Report (BRSR) with structured, metric-based environmental disclosures. Vague claims are no longer acceptable, companies must report Scope 1, 2, and 3 emissions, energy consumption, renewable energy share, waste, water, and more.
CCPA Guidelines on Green Claims : The Central Consumer Protection Authority (CCPA) now prohibits misleading environmental ads. Labels like “100% natural” or “carbon neutral” require evidence. If you can’t back it up with verified data or documentation, it’s a violation.
Mandatory Assurance is Coming : SEBI is pushing for independent assurance of BRSR reports. This means companies need to prepare auditable records, no more broad, unverified statements.
India’s Climate Finance Taxonomy : The draft taxonomy framework (May 2025) will soon define what counts as a climate-supportive or transition activity. Financial institutions will begin aligning lending and investing with this framework, increasing pressure on companies to be transparent and taxonomy-aligned.
Common Greenwashing Pitfalls
Some of the most common ways accidental greenwashing plays out:
Unverified Renewable Energy Claims : Many companies claim “100% renewable energy” without proper attributes in place.
Using Offsets Without Reduction : Claiming to be net zero by simply buying carbon credits is misleading, especially when there’s no strategy to lower emissions at source.
Mismatch Between Marketing and Reporting : Marketing says you're “climate-conscious,” but your BRSR or ESG reports show no clear targets, no Scope 3 accounting, and no verified reduction.
Data Without Documentation : Many companies use external service providers to calculate emissions and other ESG metrics but don’t maintain supporting documentation. This creates issues during assurance or investor due diligence.
How to Avoid Accidental Greenwashing in Practice
It’s easy to fall into the trap, vague claims, feel-good labels, or over-relying on vendor promises. If you want to steer clear of greenwashing, here’s a practical guide to getting it right:
1
Ground your Claims in Data
Use specific numbers, not abstract claims. Instead of “we are carbon conscious”, say “we’ve reduced Scope 2 emissions by 18% since FY22 through open access solar in Rajasthan”
2
Follow Recognised Frameworks
For emissions, use GHG Protocol for Scope 1, 2, and 3. For product carbon footprints, follow credible frameworks like the GHG Protocol Product Standard or PACT. Always define system boundaries, allocation methods, and assumptions. If you’re claiming a product is “low carbon,” clearly state which lifecycle stages are included, which emission factors were used, whether emissions are based on primary or estimated data
3
Build an Audit Trail
Your sustainability data should be traceable and verifiable. Maintain source files, document assumptions, and keep all calculations open for review. For carbon footprints, include both activity data and emission factors used, not just the final number.
4
Ensure Consistency Across Channels
Your sustainability claims in ads, websites, and investor decks must reflect what's disclosed in your official filings. If you're talking about Scope 3 reductions or climate-responsible sourcing, make sure the same shows up in your BRSR or impact reports, inconsistent messaging is a red flag.
5
Be Transparent About Limitations
Whether it’s estimated Scope 3 data or early-stage decarbonisation targets, be honest. Declare assumptions, data gaps, and areas still in progress. Stakeholders prefer honest progress over polished perfection.Getting sustainability right isn’t about playing defence. It’s about building trust, attracting capital, and creating long-term business value.At Klimates , we help businesses avoid unintentional greenwashing not only through better messaging, but through better measurement, backed by verifiable data and visible transparency. To make your climate actions visible and verifiable, we offer Klimates-verified labels for products, facilities, and company-wide disclosures, public climate profiles that showcase your emissions, reductions, and offsets in real time, QR codes and web widgets that can be embedded on packaging, websites, reports, or investor decks, so anyone can trace the impact behind the claim. Back every claim with confidence, Book a demo and stay audit-ready.
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