By Mario Di Giulio and Radha Khera
Currently blazing, ‘green’ measures by companies are witnessing bold branding, advertisement and marketing strategies to increase consumer interest & engagement. And on the other hand, from Greenwashing (misleading claims about environmental effectiveness) to Green-hushing (understating green initiatives to avoid being called out for greenwashing), countries across the globe are working on a legislative and regulatory framework to account for increasing environmental claims as part of a brand’s communication strategy. The International Sustainability Standards Board (ISSB), on June 26, 2023, published global norms to combat Greenwashing. The norms importantly seek disclosure of emissions amongst other things. Reportedly, 42% of the world’s top 4,000 companies do not give data on Scope 1 and 2 carbon emissions. The G20 backed global norms appear a promising step towards mitigating climate change risks and addressing misleading claims by companies. As the European Union goes forward in adopting legislation that ensures environmental friendly practices, controls and claims against greenwashing and foremost, incentivizing financial investments in a sustainable production through the creation of a taxonomy that may ensure ESG targets, India is strengthening its policies to achieve similar results.
Behind the scenes:
SEBI (Securities and Exchange Board of India) mandated submission of the Business Responsibility Sustainability Report (BRSR) effective April 2022 for top 1000 listed companies (by market capitalisation). The said report mandates disclosure on sustainability related goals, targets and performance as well as environment related disclosure such as use of resources, waste management, carbon-emissions, impact on biodiversity etc. amongst other things. The other pillar of ongoing change is represented by the recent initiative of the Advertising Standards Council of India (ASCI), working with the Department of Consumer Affairs, to set up a task force to tackle greenwashing in various sectors, including fashion. The task force shall examine global regulations on the subject to ascertain internationally acceptable standards that may be embraced in India. Basis an extensive study of global regulations, guidelines are likely on sustainability and green claims in India. Until a specific law comes by, it is important to know that greenwashing is already sanctioned in India, as well as in many European countries, as an unfair trade practice (as provided for in India by the Consumer Protection Act of 2019). Additionally, ASCI advertising code lays down guidelines for advertisements broadcasted to Indian consumers and discourages corporates from indulging in misleading advertisements. ASCI and the Consumer Protection Act regulate misleading advertisements in India. The added initiative of the task force is likely based on evaluation of issues being dealt by other jurisdictions to boost consumer protection and support companies who are not practicing greenwashing, rather silencing their green-initiatives due to fears of being called out for Greenwashing.
India’s role and position in the textile market:
India has established itself as a global leader in producing several textile products, such as silk, cotton, and Multimode Fibre (MMF). The country is the world leader in jute production, accounting for nearly 70% of global production. Moreover, it is the second largest vertically integrated production base, after China, giving it a competitive edge with a strong manufacturing base across the value chain and a vast raw material base. The value chain encompasses weaving, spinning, garmenting, and processing, further strengthening its leadership position in the global textile industry. In the current era of sustainability where hand-woven, (with no environmental footprint) is gaining interest, 95% of the world’s hand-woven fabric comes from India. It is estimated that the Indian textile industry is likely to reach business size of $250 billion by 2025. Coupled with the liberalised Indian foreign direct investment policy which allows 100% FDI under the automatic route (without government approvals) in the textile sector, there’s been increased attention on India in the past few years. As a country contributing significantly to the global textile industry, it could make a difference in the sector if greener policies are embraced and well-articulated.
Over and above the existing legal framework addressing misleading advertisement and greenwashing, a task force coming up with an exhaustive code on sustainability is likely to equip for international standards and expectations on environmental issues. In sync with legislations in the European Union and USA, India could work harmoniously facilitating businesses and pushing towards sustainability. The course of action is going forward through two directions: one at a governmental level and the other being initiatives of entrepreneurs associations and certification authorities supported by the government. The first one is the creation of policies intended to classify economic activities and technologies between sustainable and non-sustainable categories: the aim being attracting funds by investors acting at a global level that are increasingly choosing investment basis a company’s sustainability impact. Beyond a genuine intention to make production more sustainable, India could benefit of a legal framework on sustainability to ensure compliance with environment and human rights. This would likely come handy for its partnership and growing business with the European Union as the Supply Chain Directive is likely to be implemented soon in Europe. With a virtuous legislation, it is likely that European companies may have preferential relations with Indian industries as suppliers, facilitating application of the directive. While the plan may be ambitious, it is possible and fruitful for the world because, as has been said by Prime Minister Mr. Narendra Modi “When India grows, the World grows, when India reforms itself, the World changes”.