A class action is a legal mechanism that allows a group of people sharing a common grievance to file a single case against one party rather than separate lawsuits. It can be used for things such as overturning illegal activities, stopping harmful decisions, or demanding compensation for damages.

“There will be a gradual increase in class action lawsuits as an effective way for consumers to fight greenwashing,” said Shruti Khanijow, partner at Shardul Amarchand Mangaldas.

Khanijow said these guidelines set clear rules for companies when it comes to environmental claims and require them to substantiate their claims. With growing consumer awareness, it will become easier to hold companies accountable.

Greenwashing is a marketing strategy by which companies falsely claim or exaggerate the environmental benefits of their products or services. They often use vague terms like “natural,” “eco-friendly,” or “green” without credible evidence to support these claims.

Greenwashing not only misleads consumers, but also undermines genuine environmental initiatives, damaging consumer trust and steering them away from truly sustainable products.

To combat misleading environmental claims by companies, the Central Consumer Protection Authority issued new guidelines on October 15. These guidelines regulate misleading environmental claims in advertisements and promote transparency. They specifically prohibit vague terms like “eco-friendly” and “sustainable” unless they are supported by reliable scientific evidence or third-party certification.

Additionally, companies must provide clear information about the environmental aspects of their products, including manufacturing and packaging practices.

The Guidelines for the Prevention and Regulation of Greenwashing or Misleading Environmental Claims 2024 apply to environmental claims made by manufacturers, service providers and traders whose goods, products or services are advertised.

Ramya Suresh, partner at Saraf and Partners, noted that the new rules provide “specific grounds for recourse against manufacturers or advertisers, through individual complaints or class actions.”

Suresh said class action lawsuits in India have increased significantly over the past decade, along with trends in the United States and Europe, and are expected to grow with these new guidelines.

Debi Goenka of the Conservation Action Trust noted the likelihood of a spread of consumer actions, including class action lawsuits. “If I sue a packaged water manufacturer for microplastics, it could prompt other people to seek similar damages and lead to a class-action lawsuit,” he explained.

More recently, class action discussions have intensified over Ola Electric Ltd. The Central Consumer Protection Authority (CCPA) has issued a show cause notice to Ola Electrics after receiving nearly 10,000 complaints regarding delayed deliveries, defective products and misleading advertisements.

The results of such cases could set a precedent for class action suits in India, depending on the final decisions made, legal experts told Mint.

Experts point out that the Consumer Protection Act, 2019 provides the most appropriate forum to address consumer grievances that impact consumers as a ‘class’.

Karun Mehta, partner at Khaitan & Co., explained that “class actions are a powerful legal option for holding companies to account, as public attention around such claims can harm a company’s reputation. Additionally, cases brought before consumer commissions or civil courts require public notice in a national newspaper, which has an even greater impact on a company’s image. »

Alternative legal remedies are also available to consumers misled by greenwashing. They can file complaints directly under the Consumer Protection Act, report problems to the CCPA, file sector-specific complaints with regulators in industries such as energy, food and chemicals, or apply to the National Green Tribunal if environmental damage has occurred.

However, Shruti Khanijow of Shardul Amarchand Mangaldas cautioned that the effectiveness of the guidelines largely depends on their enforcement by authorities, and it remains to be seen how strictly businesses will be monitored to ensure compliance.

“Public vigilance must play a central role”

“Public vigilance will play a central role in holding offenders accountable. If applied rigorously, these guidelines will effectively require companies to ensure that environmental claims are accurate, transparent and scientifically based. »

Nawneet Vibhaw, partner at JSA Advocates & Solicitors, noted that while the new greenwashing guidelines are just guidelines, the Consumer Protection Act 1986, updated in 2019, protects consumers from fake allegations.

He believes these rules will encourage companies to honor their environmental promises.

Some experts argue that the term “class action” requires a clearer definition to enhance its effectiveness. “The Consumer Protection Act of 2019 does not explicitly use the term “class action” – this is taken from American law. However, representative actions under the law serve a similar purpose, allowing one or more consumers to file complaints on behalf of all those who have a common interest,” noted Gathi Prakash, partner at Cyril Amarchand Mangaldas.