Regulating Green Claims in Asia

As sustainability values among businesses are slowly becoming the trend, companies are competing to be seen as the most green business in their industry. To achieve this, they use various green claims to show off their sustainability and steal consumers’ hearts. Thus, labels like “eco-friendly”, “sustainable”, and “zero waste” are highlighted in their advertising strategy. As an emerging economy, Asia is not exempt from this practice, and strict regulations are essential to preventing rampant greenwashing.

Greenwashing in a Nutshell

‍Greenwashing refers to the act of making a product, activity, or project seem more environmentally friendly (or less harmful to the environment) than it actually is. According to the European Commission, “53% of green claims give vague, misleading, or unclear information.” Moreover, half of the green claims have weak or no verification, and 40% of them do not have proven supporting evidence at all.

Greenwashing negatively impacts efforts toward sustainability. It can lead to consumers not trusting any sustainability campaigns, even the legitimate ones. It can also perpetuate further harm, as businesses continue their harmful practices unchecked while hiding behind the green mask.

Regulations for Green Claims in Asia

One key way to protect sustainability efforts and consumer’s rights is through regulations. Despite that, not many countries have specific regulations about green claims just yet, especially in Asia.

In several economically prominent countries like Japan, Hongkong, and China, regulations are limited to ESG standards and green financing assessment systems. In Singapore, the relevant regulation is the Consumer Protection (Fair Trading) Act 2003 (CPFTA). While it is too general, the CPFTA prevents unfair marketing practices, which can include greenwashing.

Meanwhile, regulations specific to green claims are relatively new. For instance, the Korean Fair Trade Commission (KFTC) regulates greenwashing activities according to the fair labeling and advertising act. Then in 2023, South Korea proposed a legislation to impose a fine of three million won ($2,270) on companies with misleading environmental claims. Although the amount of fine is not that significant, especially for the big companies, it is a step in the right direction.

India is also progressing in regulating green claims. In 2024, the Central Consumer Protection Authority (CCPA) of India published a draft of guidelines for prevention of misleading environmental claims. Although the guidelines are not yet adopted as the legislation, it still reflects the commitment to tackle greenwashing in India.

Transparency & Governance

The rise of green claims from businesses reflects the demand for change toward more sustainable practices in light of climate change. In practice, it requires commitment in authenticity and transparency from the private sector. However, the right pathway to transformation cannot happen without strong governance. This means enacting strict guidelines and regulations about green claims to prevent greenwashing and advance our collective sustainability efforts. All in all, governments, policymakers, and sustainability verification bodies must work in harmony to ensure accountability that would protect people and the planet.

Editor: Nazalea Kusuma