Legal & Compliance
Corporate & Social Governance
Overview
In an era where businesses are judged not only by profitability but by purpose, Corporate & Social Governance (CSG) has become essential to long-term success. Our practice supports companies in embedding good governance and ESG practices into their core DNA—helping them navigate evolving regulatory landscapes, meet stakeholder expectations, and drive sustainable value. Our practice helps clients navigate the Companies Act, SEBI Listing Obligations, CSR Rules, and new ESG frameworks—enabling businesses to embed governance structures that mitigate risks and enhance reputation. We work closely with boards, compliance officers, and sustainability leads to craft governance structures that are resilient, responsive, and responsible.
India’s corporate and social governance landscape is shaped by evolving regulations and growing stakeholder expectations around transparency, accountability, and sustainability. With regulators increasingly mandating ESG disclosures and responsible business conduct, companies must integrate governance best practices that align with legal norms and investor priorities.
How We Help
We assist clients in designing governance systems that are not only compliant with Indian law but also aligned with global ESG benchmarks—ensuring credibility with regulators, investors, and stakeholders.
Scope of Services
1. Board Structuring and Governance Advisory
We help companies design and implement robust governance frameworks that promote ethical leadership and regulatory compliance. This includes:
1.1. Advising on optimal board composition, including independent directors and diversity considerations.
1.2. Defining roles and responsibilities of the board, executive leadership, and committees (Audit, Risk, Nomination & Remuneration, CSR, etc.).
1.3. Structuring board charters, internal policies, and evaluation mechanisms to improve accountability and strategic oversight.
1.4. Aligning board practices with SEBI’s LODR Regulations, Companies Act, and global standards such as OECD Corporate Governance Principles.
2. ESG Policy Development and Compliance
We assist in formulating customized Environment, Social, and Governance (ESG) policies that meet both regulatory and stakeholder expectations. Services include:
2.1. Drafting ESG charters, sustainability policies, and codes of ethics tailored to industry and operational context.
2.2. Embedding ESG principles into corporate mission statements, governance frameworks, and internal reporting lines.
2.3. Aligning ESG practices with national standards (such as SEBI’s BRSR) and international benchmarks (GRI, SASB, TCFD, and UN SDGs).
2.4. Advising on supply chain responsibility, climate risk disclosure, DEI (diversity, equity & inclusion), and workplace safety metrics.
3. Director Duties and Liability Mitigation
We provide legal counsel to board members and senior management on their obligations and potential exposures under Indian law. Services include:
3.1. Advising on fiduciary duties, conflict of interest policies, and insider trading compliance.
3.2. Drafting and reviewing indemnity agreements, Director & Officer (D\&O) insurance policies, and board resolutions.
3.3. Conducting training and workshops on statutory compliance, including under the Companies Act, SEBI regulations, and ESG frameworks.
3.4. Implementing whistleblower protections and internal investigations protocols to reduce governance risk.
4. Stakeholder Engagement Frameworks
We help organizations develop legal structures and internal mechanisms to manage their relationships with key stakeholders, such as:
4.1. Shareholders and investors (including institutional ESG investors).
4.2. Employees and unions through employee engagement protocols and fair workplace practices.
4.3. Government and regulatory bodies via structured compliance programs.
4.4. Communities and civil society groups through CSR programs and grievance redressal frameworks.
These frameworks ensure transparent communication, promote inclusive governance, and reduce reputational and regulatory risks.
5. Reporting and Disclosure Obligations
We support clients in meeting their ESG and governance disclosure duties under Indian and global norms, including:
5.1. Preparation and review of Business Responsibility and Sustainability Reports (BRSR) for listed entities.
5.2. Assistance with voluntary ESG reports aligned with GRI, SASB, and TCFD frameworks.
5.3. Legal vetting of annual reports, sustainability disclosures, board reports, and investor presentations.
5.4. Advising on greenwashing risks, disclosure litigation trends, and materiality assessments.
Regulatory and Legal Framework for ESG (India)
1. Business Responsibility and Sustainability Reporting (BRSR)
Mandated by: Securities and Exchange Board of India (SEBI)
Applicable to: Top 1000 listed companies by market capitalization
Effective from: FY 2022-23 (voluntary from FY 2021-22)
Key Requirements:
Companies must disclose ESG metrics across nine principles aligned with the National Guidelines on Responsible Business Conduct (NGRBC).
The BRSR format requires quantitative KPIs, sector-specific disclosures, and data on environmental, social, and governance parameters.
2. SEBI’s ESG Ratings and Funds Regulations
SEBI has proposed a regulatory framework for ESG rating providers (ERPs) to bring standardization and transparency.
Mutual Funds offering ESG schemes must clearly define investment strategies and ensure that ESG characteristics are measurable and reported.
3. Companies Act, 2013
Corporate Social Responsibility (CSR): Section 135 mandates CSR spending by companies meeting specified financial thresholds.
CSR activities must align with Schedule VII, which includes several ESG-aligned areas like environmental sustainability, education, gender equality, etc.
Board Reports: Must include disclosures related to CSR, risk management (including ESG risks), and governance structures.
4. Reserve Bank of India (RBI) Guidance
RBI has issued discussion papers and guidance notes encouraging banks and financial institutions to integrate climate risk and ESG factors into risk management frameworks.
ESG-related disclosure is increasingly expected in the context of green financing and sustainable lending.
5. Ministry of Corporate Affairs (MCA) Initiatives
The MCA has issued the National Guidelines on Responsible Business Conduct (NGRBC) and is promoting sustainability and ESG-aligned practices among Indian businesses through voluntary adoption and alignment with global standards.
6. Environmental and Labour Laws (Cross-links with ESG)
Water and Air (Prevention and Control of Pollution) Acts
Factories Act, 1948 and Occupational Safety, Health and Working Conditions Code, 2020
These frameworks contribute to the E (Environmental) and S (Social) components of ESG compliance.
7. Environmental Impact Assessment (EIA) Regulations
Environmental Impact Assessment (EIA) Regulations in India are a critical part of the environmental regulatory framework designed to evaluate the potential environmental impacts of industrial, infrastructure, and development projects before they are approved.
Legal and Institutional Framework for EIA Regulations
Environment (Protection) Act, 1986
EIA Notification, 2006 (amended several times, latest major draft: EIA 2020—yet to be notified)
Coastal Regulation Zone (CRZ) Notification, where relevant
State Pollution Control Boards (SPCBs) for NOCs
Expert Appraisal Committees (EACs) at central and state levels
Overview of EIA Process
The Environmental Impact Assessment (EIA) process is governed primarily by the Environment (Protection) Act, 1986 and implemented through various notifications issued by the Ministry of Environment, Forest and Climate Change (MoEFCC)—particularly the EIA Notification of 2006, which remains the cornerstone regulation.
Key Features of EIA Process
1. Purpose and Objective:
- Assess adverse environmental effects of proposed projects.
- Suggest mitigation measures to minimize negative impacts.
- Promote sustainable development by integrating environmental concerns into decision-making.
2. Applicability:
- Mandatory for certain categories of projects including:
- Mining and minerals
- Infrastructure (highways, airports, ports)
- Thermal and nuclear power plants
- Chemical and pharmaceutical industries
- Real estate projects (above a specific threshold)
- Waste treatment and disposal facilities
3. Categorization of Projects:
Projects are categorized as:
- Category A: Requires clearance from the central government (MoEFCC).
- Category B: Requires clearance from the State Environment Impact Assessment Authority (SEIAA).
- Further divided into B1 (EIA required) and B2 (EIA not required, subject to screening).
4. EIA Process Steps:
- Screening (for Category B projects)
- Scoping (defining the terms of reference)
- Public Consultation (includes public hearing and written responses)
- Submission of EIA Report
- Appraisal by Expert Appraisal Committee (EAC or SEAC)
- Grant or Rejection of Environmental Clearance
5. EIA Report Requirements:
- Baseline environmental data
- Risk and hazard analysis
- Environmental Management Plan (EMP)
- Socio-economic impacts
- Mitigation strategies and alternatives
Recent Developments and Controversies
The EIA 2020 Draft Notification proposed to:
- Allow post-facto environmental clearance
- Reduce public participation and shorten notice periods
- Introduce self-reporting mechanisms by project proponents
It faced widespread criticism and public pushback for potentially diluting environmental safeguards.
Why EIA Matters for Businesses
- A critical step for regulatory compliance before project initiation.
- Impacts project timelines, costs, and legal risk.
- Increasingly linked to ESG disclosures and investor due diligence.
- Non-compliance can result in project halts, fines, or legal action under environmental laws.
8. Reportings
A. Business Responsibility and Sustainability Reporting (BRSR) – SEBI
Regulator: Securities and Exchange Board of India (SEBI)
Applies to: Top 1,000 listed companies by market capitalization
Mandatory from: FY 2022–23 (voluntary for FY 2021–22)
Replaces: Business Responsibility Report (BRR)
Key Features:
Structured around the 9 Principles of the National Guidelines on Responsible Business Conduct (NGRBC)
Divided into:
(i) General Disclosures (e.g., company profile, subsidiaries, employee count)
(ii) Management & Process Disclosures (governance, policies, stakeholder engagement)
(iii) Principle-wise Performance Disclosures (E, S, G KPIs)
Encourages disclosure of quantitative ESG metrics
SEBI has also proposed a BRSR Core framework for assurance and comparability
B. Sustainability Reporting by ESG Mutual Funds
Regulator: SEBI
Applies to: ESG-themed mutual fund schemes
Key Features:
Must invest at least 80% in ESG-aligned securities
Must disclose:
- ESG score of portfolios
- ESG ratings of top holdings
- Stewardship initiatives
Reporting aligned with Securities Market Risk Disclosure requirements and stewardship codes
C. CSR Reporting – Companies Act, 2013
Regulator: Ministry of Corporate Affairs (MCA)
Applies to: Companies meeting thresholds under Section 135 of the Act
Key Features:
Annual report on Corporate Social Responsibility (CSR) activities
Must include:
(i) Composition of CSR Committee
(ii) CSR Policy and projects
(iii) Expenditure details and outcomes
CSR aligned to Schedule VII, covering areas like environment, education, health, and gender equality
D. Integrated Reporting (Voluntary)
Regulator: Not mandatory under SEBI; encouraged
Applies to: Voluntary adoption by large listed companies and public sector units
Key Features:
- Follows (IR) Framework by IIRC (International Integrated Reporting Council)
- Includes 6 capitals: Financial, Manufactured, Intellectual, Human, Social, and Natural
- Aimed at communicating long-term value creation to stakeholders
E. Voluntary ESG Frameworks Adopted by Indian Companies
Many Indian firms voluntarily align with global ESG reporting standards:
- Global Reporting Initiative (GRI)
- Task Force on Climate-related Financial Disclosures (TCFD)
- Carbon Disclosure Project (CDP)
- Sustainability Accounting Standards Board (SASB)
- Science-Based Targets initiative (SBTi) for climate goals
F. Green Bonds and Sustainability-linked Instruments
Regulator: SEBI (for listed bonds), RBI (for banks and NBFCs)
Key Features:
Issuers must disclose:
- Use of proceeds
- Environmental impact
- Post-issuance reporting and audits
SEBI mandates that green bond issuers provide ESG disclosures aligned with BRSR, where applicable
G. RBI Guidelines on Climate Risk and ESG
Applies to: Banks and Financial Institutions
Status: Currently under consultation (as of 2023)
Key Proposals:
Climate risk stress testing
Integration of ESG into credit risk frameworks
Disclosures on climate-related financial risks (aligned with TCFD)
Summary Table
Reporting Type | Regulator | Applicability | Nature |
BRSR | SEBI | Top 1000 listed companies | Mandatory |
BRSR Core (proposed) | SEBI | For ESG funds and eventually others | Proposed |
CSR Report | MCA | Companies meeting Section 135 criteria | Mandatory |
Integrated Reporting | — (Voluntary) | Voluntary by listed/large companies | Voluntary |
ESG Funds Disclosures | SEBI | ESG Mutual Funds | Mandatory |
Green Bond Reporting | SEBI, RBI | Issuers of green/sustainability bonds | Mandatory |
RBI ESG Risk Framework | RBI | Banks and NBFCs | Proposed |
Voluntary Global Frameworks | — | Companies seeking global alignment | Voluntary |
9. Global Alignment and Voluntary Frameworks
Many Indian companies voluntarily align with:
- Global Reporting Initiative (GRI)
- Task Force on Climate-related Financial Disclosures (TCFD)
- Sustainable Development Goals (SDGs)
- Carbon Disclosure Project (CDP)
Key Trends and Future Outlook
ESG compliance is increasingly being integrated into corporate governance frameworks, investor due diligence, and stakeholder reporting.
SEBI is expected to expand BRSR applicability and increase regulatory focus on greenwashing prevention.
India’s Net Zero by 2070 commitment is expected to shape sector-specific ESG norms, especially in energy, manufacturing, and transport.
