If you need help with esg, this guide sets out the legal position and the next steps. Legals365 is the legal platform of Advocate B.K. Singh and associates, based in Delhi NCR.
In short. ESG legal work in India centres on SEBI's Business Responsibility and Sustainability Report (BRSR) for the top 1,000 listed companies, assurance of BRSR Core indicators, climate disclosures modelled on TCFD and ISSB standards, the CCPA's 2024 greenwashing guidelines for environmental claims, CSR under section 135 of the Companies Act, and ESG due diligence and contract terms in deals and supply chains.
ESG stopped being a voluntary brochure topic once SEBI made the Business Responsibility and Sustainability Report mandatory for the largest listed companies and the Central Consumer Protection Authority issued guidelines against greenwashing. A sustainability statement is now a regulatory disclosure, an advertising claim or a contractual warranty, and each of those carries legal risk if it is wrong. Investors, lenders, customers abroad and regulators read the same numbers and compare them.
This page explains the legal side of ESG for Indian businesses: who must file a BRSR and what BRSR Core assurance involves, where TCFD and the newer ISSB standards fit, what the greenwashing guidelines require of environmental claims, how ESG shows up in due diligence, financing and supply contracts, and where directors' duties come in. It also covers how the position differs for listed and unlisted companies, for heavy industry and service businesses, and the mistakes that most often turn a sustainability report into a liability.
- Law
- SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, regulation 34(2)(f) and SEBI circulars on BRSR and BRSR Core; Companies Act 2013 sections 134, 135 and 166(2); Consumer Protection Act 2019 and the CCPA Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims 2024; Environment (Protection) Act 1986; Public Liability Insurance Act 1991; Energy Conservation Act 2001 and the Carbon Credit Trading Scheme 2023.
- Regulators
- SEBI for listed company disclosures and ESG funds and ratings; the Central Consumer Protection Authority for misleading environmental claims; the Ministry of Corporate Affairs for CSR and board reports; RBI for climate risk in regulated entities; MoEFCC, CPCB and state boards for the underlying environmental compliance.
- Time limits
- BRSR is filed as part of the annual report for each financial year; BRSR Core assurance or assessment follows SEBI's phased glide path by market capitalisation; replies to CCPA or SEBI notices within the time given in them; consumer complaints within 2 years of the cause of action.
- Documents
- Annual report and BRSR, data on energy, emissions, water, waste and workforce, assurance reports, environmental consents and clearances, CSR policy and spending records, advertising and labelling copy with the evidence behind each claim, supplier codes of conduct and ESG clauses in contracts.
What ESG legal work actually covers
ESG legal work is about making sure that what a company says about its environmental, social and governance performance is true, complete and consistent, and that the underlying obligations are being met. It is not a separate body of law. It draws on securities regulation for disclosures, consumer law for claims made to the public, company law for directors' duties and CSR, environmental law for consents and waste obligations, labour law for workforce indicators, and contract law for the promises made to investors, lenders and customers.
In practice the work falls into four groups. The first is disclosure: preparing or reviewing the BRSR, climate disclosures and sustainability reports, and handling assurance. The second is claims: vetting advertisements, packaging, websites and investor material for greenwashing risk. The third is transactions: ESG due diligence in acquisitions, investments and lending, and the warranties and indemnities that follow. The fourth is disputes and enforcement: replying to regulators, consumer complaints, investor queries and challenges by activists or competitors.
The common thread is evidence. An ESG statement that cannot be backed by data, documents or third-party verification is a risk regardless of how it is worded. Most of the legal work is therefore asking for proof and narrowing statements until they match what the company can actually show.
BRSR: who must file and what it requires
The Business Responsibility and Sustainability Report is mandatory for the top 1,000 listed companies by market capitalisation, under regulation 34(2)(f) of the SEBI Listing Regulations, from the financial year 2022-23. It replaced the older Business Responsibility Report and is filed as part of the annual report. Other listed companies can file it voluntarily, and many unlisted companies in the supply chains of listed ones are now asked to provide BRSR-style data to their customers.
The BRSR is organised around the nine principles of the National Guidelines on Responsible Business Conduct. It has a general disclosures section, a management and process section, and a principle-wise performance section with essential and leadership indicators. It asks for quantitative data on energy, water, emissions, waste, employee wellbeing, safety, diversity, complaints and community engagement, along with policies and governance structures.
The legal risk in a BRSR is the same as in any other statutory disclosure: a material misstatement or omission can attract action by SEBI under the Listing Regulations and the SEBI Act, and can be used by investors in claims. The report is approved by the board, and directors who sign off on figures they have not tested are exposed. A BRSR should be reviewed with the same care as the financial statements, by people who know where the numbers came from.
BRSR Core, assurance and value chain disclosures
BRSR Core is a subset of key performance indicators from the BRSR, such as greenhouse gas emissions, water and energy intensity, waste, gender diversity, safety and fair treatment of stakeholders, which SEBI chose for independent verification. SEBI introduced it in July 2023 with a glide path starting with the largest 150 listed companies and extending to the top 1,000 over successive years. In 2025, SEBI allowed companies to obtain either an assessment or an assurance of BRSR Core and eased the timelines for value chain disclosures, which now apply to the largest companies on a comply-or-explain basis to begin with.
The assurance or assessment is done by an independent provider who checks the data against records. Companies that have never had their ESG data tested often find gaps at this stage: emissions calculated on assumed factors, water data estimated rather than metered, or workforce figures that do not match payroll. The provider's report is published, so a qualified report becomes a public issue.
Value chain disclosures require the company to report on its significant suppliers and customers, which pulls unlisted businesses into the system. For a supplier, the practical effect is a stream of data requests and contractual clauses from listed customers. Because SEBI has changed the phasing more than once, check the latest circular to see which requirements apply to your company for the current year.
The main ESG frameworks and rules that apply in India
| Framework or rule | Who it applies to | What it requires | Status as of October 2026 |
|---|---|---|---|
| BRSR (SEBI LODR regulation 34(2)(f)) | Top 1,000 listed companies by market capitalisation | Annual ESG disclosures on nine principles | Mandatory since FY 2022-23 |
| BRSR Core | Listed companies on SEBI's glide path | Independent assessment or assurance of key indicators; value chain disclosures | Phased in; check the current circular |
| TCFD recommendations and ISSB standards (IFRS S1 and S2) | Voluntary in India; required by some investors and foreign regulators | Climate governance, strategy, risk management and metrics | TCFD folded into ISSB; India has not mandated ISSB |
| CSR (Companies Act section 135) | Companies above the net worth, turnover or net profit thresholds | CSR committee, policy and spending of 2 per cent of average net profit | In force |
| CCPA Greenwashing Guidelines 2024 | Manufacturers, service providers, advertisers and endorsers | Substantiation and qualification of environmental claims | In force since October 2024 |
| Carbon Credit Trading Scheme 2023 | Obligated entities in notified energy-intensive sectors and voluntary participants | Emission intensity targets and tradable carbon credit certificates | Being implemented sector by sector |
| EU CBAM | Indian exporters of steel, aluminium, cement, fertilisers and some other goods to the EU | Embedded emissions data and certificates bought by EU importers | Definitive period from 1 January 2026 |
TCFD, ISSB and climate disclosure in India
TCFD, the Task Force on Climate-related Financial Disclosures, published recommendations in 2017 that organised climate reporting around governance, strategy, risk management, and metrics and targets. The Task Force was disbanded in 2023 after its recommendations were absorbed into the ISSB's IFRS S1 and IFRS S2 standards, and the IFRS Foundation now carries that work forward. Many page titles still refer to TCFD because investors and lenders continue to use the term.
India has not made TCFD or ISSB reporting mandatory for companies generally. The BRSR includes climate-related indicators, and several large companies report against TCFD or ISSB voluntarily because their foreign investors, lenders or customers ask for it. The Institute of Chartered Accountants of India has been working on sustainability reporting standards, and the RBI has issued a draft framework for climate-related financial risk disclosures by regulated entities; check whether these have been finalised before relying on either.
For a company preparing climate disclosures voluntarily, the legal point is that a voluntary disclosure is still a disclosure. A transition plan, a net zero target or a scenario analysis published in an annual report or investor presentation can be relied on by investors and examined by SEBI. Targets should be framed with their assumptions and dependencies stated, and progress should be reported honestly, including when it is behind.
Greenwashing: what the CCPA guidelines require
Greenwashing is any deceptive or misleading practice that conceals, omits or misrepresents information by making false, unsubstantiated, exaggerated or vague environmental claims. The Central Consumer Protection Authority issued the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims on 15 October 2024 under the Consumer Protection Act 2019, and they apply to manufacturers, service providers, product sellers, advertising agencies and endorsers.
The guidelines require generic terms such as eco-friendly, green, natural, sustainable, pure, earth-friendly and carbon neutral to be accompanied by qualifiers and adequate disclosures, and backed by verifiable evidence. Claims must be specific about whether they apply to the product, the packaging, the manufacturing process or the company. Material information should be disclosed in the advertisement or through an accessible link or QR code. Claims about offsets, comparative claims and claims based on future aspirations face specific conditions, and the evidence should be reliable, verifiable and, where needed, independently verified.
A misleading environmental claim can be treated as a misleading advertisement or an unfair trade practice under the Consumer Protection Act. The CCPA can order discontinuation or modification of the advertisement, require corrective advertising and impose monetary penalties under section 21, which increase for repeat contraventions, and endorsers can be penalised too. Consumers can also complain to the consumer commissions; our page on consumer complaints in district and state commissions explains that route. SEBI separately polices greenwashing in ESG mutual fund schemes and green debt securities.
Key legal provisions in ESG matters
Regulation 34(2)(f), SEBI Listing Regulations 2015
Requires the top 1,000 listed companies by market capitalisation to include a Business Responsibility and Sustainability Report in the annual report, in the format and with the assurance requirements SEBI prescribes by circular.
Section 166(2), Companies Act 2013
A director must act in good faith to promote the objects of the company for the benefit of its members as a whole, and in the best interests of the company, its employees, the shareholders, the community and for the protection of the environment. This is the statutory hook for ESG in board decisions.
Section 135, Companies Act 2013
Companies with net worth of 500 crore rupees or more, turnover of 1,000 crore rupees or more, or net profit of 5 crore rupees or more must constitute a CSR committee (subject to exceptions), adopt a CSR policy and spend at least 2 per cent of average net profits of the three preceding years, with unspent amounts dealt with as the Act requires.
Sections 2(28), 18 and 21, Consumer Protection Act 2019
Define misleading advertisement, allow the CCPA to issue guidelines and act against unfair trade practices, and allow directions and penalties against manufacturers, advertisers and endorsers for false or misleading advertisements, including environmental claims.
Public Liability Insurance Act 1991
Requires owners who handle hazardous substances above notified quantities to take insurance policies covering liability to give immediate relief to victims of accidents, and to contribute to the Environment Relief Fund. Compliance is a standard item in ESG due diligence for distilleries, chemicals, steel and similar units.
BRSR and ESG gap closure: a practical process
Companies preparing their first assured BRSR, or a supplier responding to a customer's ESG questionnaire, can follow broadly the same sequence.
Map what applies
List the disclosures, assurance requirements and claims rules that apply to the company this year: BRSR or not, BRSR Core phase, CSR thresholds, EPR registrations, export markets with their own rules, and customer requirements.
Trace every number to its source
For each indicator, identify where the data comes from: meters, invoices, payroll, consent orders, waste manifests, EPR returns. Indicators with no clear source are the gaps that matter most.
Check the underlying legal compliance
ESG data reflects legal compliance. Confirm environmental clearance and consents, hazardous waste authorisation, EPR status, groundwater NOC, labour code registrations and POSH committees. A disclosure cannot be better than the compliance behind it.
Fix wording and narrow claims
Edit policies, targets and narrative statements so that each matches the evidence. Remove absolute terms, add qualifiers and dates, and state the boundary of each figure.
Prepare for assurance or assessment
Give the provider organised evidence files. Agree on methodology in advance, particularly for emissions factors and estimated data, and resolve disagreements before the report is final.
Board review and sign-off
Put the BRSR before the board with a note on the main judgments, estimates and open issues. Record the review in the minutes; it is the directors' evidence of care if a figure is later questioned.
The first cycle is the hardest. Once the data sources and controls are in place, later years are mostly about keeping them working and explaining changes.
ESG due diligence in acquisitions, investments and lending
ESG due diligence examines whether a target business has the environmental, social and governance risks that could cost money or reputation after the deal. On the environmental side it covers consents to establish and operate, environmental clearance, hazardous waste authorisation, EPR registrations and targets, groundwater permissions, pending show cause notices, environmental compensation demands, NGT cases and contaminated land. On the social side it covers labour code compliance, contract labour, safety incidents, POSH complaints and community disputes. On governance it covers related party transactions, bribery risk and the quality of internal controls.
When Advocate B.K. Singh reviews ESG findings in a transaction, the point he presses first is whether each risk has been priced or allocated: a specific indemnity, a condition to closing, a price adjustment or a post-closing undertaking with a deadline. A due diligence report that lists problems without changing the documents has done half its job. Our page on mergers, acquisitions and investment deals explains how warranties and indemnities are structured more generally.
Lenders now run ESG checks as part of credit appraisal, particularly for project finance and sustainability-linked loans. Banks may require compliance with environmental and social action plans, periodic reports and covenants linked to ESG performance. A borrower that signs such covenants without the data to meet them is setting up a future default, so the targets in a sustainability-linked loan should be negotiated with the operations team in the room.
ESG clauses in contracts and supply chains
ESG obligations increasingly arrive through contracts. Large buyers include supplier codes of conduct covering labour, safety, environment and anti-corruption, rights to audit, obligations to share emissions and other data, and termination rights for breach. Exporters to Europe face customers who must comply with EU rules on due diligence, deforestation and carbon border adjustment, and who pass those obligations down the chain.
For a supplier, the risk is agreeing to obligations it cannot meet or monitor. Clauses requiring compliance with all applicable laws worldwide, or with the buyer's policies as amended from time to time, or full indemnity for any ESG claim, should be narrowed to specific laws, fixed versions of policies and liability linked to fault. Audit rights should come with notice, confidentiality and cost allocation. Our page on commercial contracts covers drafting and negotiation in general.
For a buyer, the risk is the opposite: clauses that look strong but cannot be enforced or verified. Data obligations should specify format, frequency and methodology, and remedies should be proportionate and practical. Green leases in commercial real estate, power purchase agreements for renewable energy, and sustainability-linked supply agreements each have their own drafting points, but the same rule holds: write what can be measured.
Carbon markets, green credits and CBAM
India's Carbon Credit Trading Scheme 2023, made under the Energy Conservation Act 2001 as amended in 2022, sets up a compliance market in which obligated entities in notified energy-intensive sectors receive greenhouse gas emission intensity targets and can earn or must buy carbon credit certificates. The Government has been notifying targets sector by sector, and a voluntary offset mechanism runs alongside. Companies in the covered sectors should treat their targets as legal obligations with monitoring, reporting and verification requirements.
The Green Credit Programme, under rules notified in 2023, gives credits for activities such as tree plantation and water conservation. These credits are not the same as carbon credits, and a company that describes its green credits or offsets as making it carbon neutral must meet the CCPA guidelines on offset claims, which require disclosure of how the offset was achieved and what it covers.
For exporters, the EU's Carbon Border Adjustment Mechanism moved into its definitive period on 1 January 2026. EU importers of steel, aluminium, cement, fertilisers and certain other goods must account for embedded emissions, and they will ask Indian suppliers for verified emissions data. Inaccurate data can lead to default values that make Indian goods less competitive, so the legal and technical work on emissions reporting has a direct commercial effect.
How ESG risk differs by sector and company type
Heavy industry such as steel, cement, chemicals, distilleries and power has the most at stake on the environmental side, because the underlying compliance is extensive and emissions are large. ESG work there starts with the consents, clearances, hazardous waste and public liability insurance position, and the disclosures follow. Real estate developers and IT parks face greenwashing risk around green building ratings, energy claims and water recycling, and the gap between what was promised in the environmental clearance and what was built.
Banks, NBFCs and insurers face climate risk in their portfolios and RBI's evolving expectations on governance and disclosure. Consumer brands face the greatest greenwashing risk because they make claims directly to the public, often on packaging, where the CCPA guidelines and plastic EPR obligations meet. Service and technology companies have smaller environmental footprints but are judged on data protection, workforce diversity, and governance.
Unlisted companies are not required to file a BRSR, but many are pulled in through value chain disclosures, lender requirements and investor terms. Private equity investors often require portfolio companies to adopt ESG policies and report annually. For an unlisted company, the practical starting point is to find out what its customers, lenders and investors already require, and build from there.
Example: an IT park's green claim
Here's a made-up example. A developer markets an IT park as a carbon neutral campus powered by 100 per cent green energy. The campus buys renewable energy for its common areas through an open access arrangement, but tenants buy their own power from the distribution company, and the diesel generator sets used during outages are not counted. The developer bought offsets for the rest of its own emissions but has not disclosed this. A competitor complains to the CCPA, and a tenant raises the claim in a lease dispute.
Under the CCPA guidelines, the claim is too broad: it does not say that it covers only common areas, does not disclose reliance on offsets, and ignores generator emissions. The developer's sensible response is to withdraw the claim and replace it with a qualified statement about the renewable share of common area power, with a link to the methodology and the offset details. If it does so quickly and documents the change, the regulatory outcome is likely to be far less serious than defending the original claim. The tenant's lease dispute will turn on the contract wording, which is why marketing language should never be copied into leases without review.
Documents to keep ready for ESG review
Disclosures and reporting
- Annual reports and BRSRs for recent years
- BRSR Core assessment or assurance reports
- Board and committee minutes approving ESG disclosures
- Sustainability reports, investor presentations and climate targets
- Emissions inventory with methodology and emission factors
Underlying compliance
- Environmental clearance, CTE and CTO orders
- Hazardous waste authorisation and manifests
- EPR registrations, returns and certificates
- Public liability insurance policy where applicable
- Labour code registrations, safety records and POSH committee reports
Claims, contracts and CSR
- Advertising, packaging and website copy with evidence for each claim
- Certifications and verification reports relied on
- Supplier codes of conduct and ESG clauses
- Sustainability-linked loan covenants
- CSR policy, committee minutes and spending records
Common mistakes in ESG disclosure and claims
The most common mistake is reporting ambition as achievement. A target to reach net zero by a distant year becomes, in marketing copy, a company that is going green, and then a product that is green. Each step loses the qualifiers, and the final statement cannot be supported. The second is using estimated or industry-average data without saying so, which an assurance provider or a regulator will find.
The third mistake is treating the BRSR as a communications document drafted by the marketing team. It is a regulatory filing. The fourth is ignoring the underlying legal compliance: a company that reports strong environmental performance while operating without a valid consent, or with unmet EPR targets, has created evidence against itself. The fifth is accepting customer ESG clauses without reading them, and discovering later that they include unlimited indemnities.
Not every ESG concern needs a lawyer. Many data problems are operational and are fixed by better metering and record keeping. Legal input matters most at the points where statements become obligations: the board's approval of the BRSR, the release of a public claim, the signing of a contract or loan, and any response to a regulator.
What to do this week
Pull together every public environmental claim the company makes, in advertising, packaging, websites and investor material, and check each against the CCPA guidelines and the evidence you hold. Withdraw or qualify any claim you cannot prove. If you file a BRSR, check which BRSR Core and value chain requirements apply this year and whether your data sources can support them.
Check the underlying compliance file: environmental clearance, consent to establish and operate, EPR registration and returns and labour code registrations. For listed companies, align the ESG calendar with the company law compliance cycle so that board review is not rushed. If a deal or loan is in progress, make sure ESG findings are reflected in the documents.
If you want the papers checked before you act, the team of Advocate B.K. Singh at Legals365 can review your disclosures, claims or contracts and tell you the next step: talk to a lawyer.
Frequently asked questions
Which companies must file a BRSR in India?
The top 1,000 listed companies by market capitalisation must include a Business Responsibility and Sustainability Report in their annual report under regulation 34(2)(f) of the SEBI Listing Regulations. Other listed companies may file voluntarily. Unlisted suppliers are often asked for similar data by listed customers.
What is BRSR Core?
BRSR Core is a set of key ESG indicators from the BRSR that SEBI requires to be independently assessed or assured. It was introduced in 2023 and is being phased in from the largest listed companies. SEBI has adjusted the timelines and value chain requirements, so check the current circular.
Is TCFD reporting mandatory in India?
No. TCFD and ISSB climate reporting are voluntary for Indian companies generally, though the BRSR includes climate indicators. Many companies report against them because investors or foreign customers ask. A voluntary climate disclosure still carries legal risk if it is inaccurate.
What is greenwashing under Indian law?
Greenwashing is making false, unsubstantiated, exaggerated or vague environmental claims that mislead consumers. The CCPA's 2024 guidelines require such claims to be specific, qualified and backed by verifiable evidence. A misleading green claim can be treated as a misleading advertisement under the Consumer Protection Act.
Can I call my product eco-friendly?
Only if the claim is qualified and backed by evidence. The CCPA guidelines require generic terms such as eco-friendly, green or sustainable to be accompanied by adequate qualifiers and disclosures. State what aspect is environmentally better and how you know.
What penalties apply for greenwashing?
The CCPA can order an advertisement to be discontinued or modified, require corrective advertising and impose monetary penalties under section 21 of the Consumer Protection Act, which increase for repeat contraventions. Endorsers can also be penalised. Consumers may separately file complaints before consumer commissions.
Do unlisted companies need to worry about ESG?
Yes, in practice. Value chain disclosures, lender requirements, investor terms and export customers bring ESG obligations to unlisted companies. Greenwashing rules and CSR thresholds apply regardless of listing.
What does ESG due diligence cover in an acquisition?
It covers environmental consents, clearances, waste and EPR compliance, pending notices and litigation, contaminated land, labour and safety compliance, and governance risks such as bribery and related party dealings. The findings should be reflected in warranties, indemnities, conditions or price. A report that does not change the documents leaves the risk with the buyer.
Are directors liable for wrong ESG disclosures?
Directors approve the BRSR and annual report and owe duties under section 166 of the Companies Act, including to the community and the environment. A material misstatement can attract SEBI action and investor claims. Recording a proper board review is the directors' best protection.
What is the Carbon Credit Trading Scheme?
It is India's compliance carbon market under the Energy Conservation Act 2001, set up in 2023. Obligated entities in notified sectors get emission intensity targets and can earn or must buy carbon credit certificates. Targets are being notified sector by sector.
How does EU CBAM affect Indian exporters?
From 1 January 2026, EU importers of steel, aluminium, cement, fertilisers and some other goods must account for embedded emissions. They will ask Indian suppliers for verified emissions data. Poor data can lead to default values that raise costs for the importer.
What should an ESG clause in a supply contract include?
It should name the specific laws and fixed versions of policies the supplier must follow, the data to be shared and how, audit rights with notice and confidentiality, and proportionate remedies. Avoid open-ended indemnities and obligations to follow policies as amended from time to time.
Need help with ESG? Send your papers or a short note of what has happened. An advocate from the team of Advocate B.K. Singh will read it and tell you the next step.
