Introduction

The phrase ‘greenwashing’—the act of deceptively portraying a product, policy, or company as environmentally responsible—has emerged as one of the most discussed issues in corporate sustainability law. In an era when companies proudly advertise carbon neutrality, net-zero pledges, and ESG credentials, the gap between corporate claims and actual performance has become a fertile ground for litigation worldwide. Globally, climate-related lawsuits have risen sharply, and India is witnessing a convergence of regulatory scrutiny, investor activism, and judicial awareness that could make corporate greenwashing the next major frontier in Indian litigation.

I. Understanding Greenwashing

Greenwashing refers to misleading or false representations of a company’s environmental performance. It may involve underreporting emissions, exaggerating renewable-energy usage, or selectively disclosing positive sustainability data. Regulators and courts globally treat it as a species of misrepresentation and consumer deception, and Indian law is beginning to follow the same path.

II. The Indian Legal Landscape on Greenwashing

1. SEBI’s ESG Framework: The Securities and Exchange Board of India (SEBI) mandates the top 1,000 listed companies to file Business Responsibility and Sustainability Reports (BRSR). Since 2023, the ‘BRSR Core’ requires independent assurance of key environmental and social indicators. False disclosures could attract penalties under Section 15HA of the SEBI Act, 1992, for fraudulent practices, and also trigger corporate liability under the Companies Act, 2013.

2. Directors’ Duties: Section 166(2) of the Companies Act, 2013 obliges directors to act in good faith for the protection of the environment. Misleading ESG statements could therefore amount to breach of fiduciary duty. With ESG now embedded in risk management and board oversight, false sustainability reporting could lead to shareholder or regulatory actions.

3. Consumer Protection: The Consumer Protection Act, 2019 defines unfair trade practices to include false representation of a product’s standard or quality. A company advertising goods as ‘eco-friendly’ or ‘biodegradable’ without proof could face consumer complaints and penalties from the Central Consumer Protection Authority (CCPA).

4. Environmental Law: The Environment (Protection) Act, 1986 allows prosecution for false or misleading disclosures in environmental-clearance applications. The National Green Tribunal (NGT) also has jurisdiction to penalize misrepresentation leading to environmental harm.

III. Judicial and Regulatory Trends

Indian courts have expanded environmental rights through Article 21 of the Constitution. In 2024, the Supreme Court in Re: Environment & Climate Change recognized a ‘Right to be Free from Adverse Effects of Climate Change,’ emphasizing corporate and state accountability. In 2025, SEBI initiated a review of ESG disclosure norms and empowered ESG Rating Providers to withdraw ratings for non-compliance, signaling a shift toward verifiable disclosures.

IV. Comparative Jurisprudence

Globally, regulators are intensifying enforcement against greenwashing. The U.S. SEC’s Climate and ESG Task Force investigates misleading climate-risk disclosures. The EU’s Green Claims Directive (2024) mandates that all environmental claims be scientifically verified, while the UK and Australian regulators have penalized misleading advertisements about sustainability.

V. Avenues for Climate Litigation in India

Potential litigation pathways include shareholder derivative suits under Sections 241–245 of the Companies Act, consumer complaints under the Consumer Protection Act, or public interest litigations under Articles 32 and 226 of the Constitution. Regulatory actions by SEBI, the CCPA, or NGT could also address corporate misrepresentation in ESG disclosures.

VI. Challenges in Bringing Greenwashing Claims

The absence of a dedicated greenwashing statute, the technical nature of climate data, and the difficulty of proving causation or loss make such litigation challenging. However, with evolving judicial recognition of climate rights and mandatory ESG disclosures, enforcement is only a matter of time.

VII. The Way Forward

To mitigate risk, companies should verify all ESG claims, align internal data with BRSR Core indicators, engage assurance providers, disclose methodologies, and educate marketing teams about environmental representations. Board-level oversight and periodic audits will be critical to maintaining credibility and avoiding litigation.

VIII. Conclusion

As India transitions toward a low-carbon economy, corporate honesty in sustainability claims will define legal and reputational resilience. The constitutional right to a clean environment, coupled with statutory duties under SEBI and consumer law, creates fertile ground for greenwashing litigation. The question is no longer whether Indian companies can be sued for greenwashing—but when.

References

1. SEBI Circular on Business Responsibility and Sustainability Reporting (BRSR), May 10, 2021.
2. SEBI Circular on BRSR Core and Value Chain Disclosures, July 12, 2023.
3. SEBI Framework for Green, Social, Sustainability & Sustainability-Linked Bonds, February 6, 2023.
4. SEBI Review of ESG Disclosures and Ratings, April 2025.
5. Companies Act, 2013 — Sections 134, 135, 166, 241-245.
6. Consumer Protection Act, 2019 — Sections 2(47), 21.
7. Environment (Protection) Act, 1986 — Sections 15–17.
8. National Green Tribunal Act, 2010 — Sections 14, 15.
9. Supreme Court, Re: Environment & Climate Change (2024) 9 SCC 441.
10. Vellore Citizens Welfare Forum v. Union of India (1996) 5 SCC 647.
11. CCPA Advisory on Environmental Claims and Greenwashing, 2023.
12. EU Green Claims Directive, 2024.
13. SEC Climate and ESG Task Force, U.S. SEC Release, 2021.
14. Australian Competition & Consumer Commission, ‘Greenwashing Guidance’, 2023.