Parliamentary Panel Calls for New ESG Oversight Body to Combat Greenwashing

A Parliamentary panel has recommended that the corporate affairs ministry establish an ESG oversight body to tackle greenwashing and enforce penal provisions against fraudulent claims. The panel emphasized the need for statutory amendments to the Companies Act, 2013, to ensure ESG considerations are integral to directors' duties.

A Parliamentary panel has called on the corporate affairs ministry to create an ESG (Environmental, Social, and Governance) oversight body to actively counter greenwashing and establish stricter penalties for fraudulent ESG claims.

The panel criticized the ministry's stance against creating this body, arguing that the existing disclosure-based regime isn't sufficient for monitoring.

The report suggests statutory amendments to the Companies Act, 2013, to explicitly incorporate ESG objectives into directors' fiduciary duties, aiming to elevate sustainable practices as a strategic business imperative.

(With inputs from agencies.)