Beyond Green Masks: Technology, Criminal Liability, And The Battle Against ESG Fraud In The New Economy
Aakanksha Verma, Institute of Law, Nirma University
ABSTRACT
When it comes to environmental, social, and governance investing, this has moved from a marginal part of responsible finance to the heart of it, totally changing the way trillions of dollars are deployed and the way regulating bodies gauge the responsibility of corporations. It has produced one of the most sophisticated and under-prosecuted forms of corporate misconduct in the new economy: ESG fraud. This essay examines a specific and underappreciated dimension of that problem. The central research question is not merely whether companies misrepresent sustainability claims, but whether the legal frameworks designed to hold them accountable have kept pace with the technology through which those misrepresentations are now engineered.
The scope of analysis covers three interconnected domains. First, it examines the technological paradox at ESG’s core: the same tools promoted as instruments of accountability, algorithmic reporting, blockchain supply chains, and AI-generated disclosures have become the primary mechanisms of concealment. Second, it diagnoses how that technological reality has broken three foundational doctrines of corporate criminal liability: the identification doctrine’s requirement of a directing mind, veil-piercing’s assumption of traceable control, and materiality standards premised on conscious human intent. Third, it provides a comparison of regulatory reactions in India, the European Union, and the United States, and it proves that all the frameworks address the problem they were aimed at, only as a part of it.
The essay is organized in six sections, which are diagnosing the technology paradox, mapping doctrinal failure in terms of identification, veil-piercing, and materiality, comparing regulatory frameworks, analyzing governance as the location linking failure to fraud, proposing technology-based enforcement tools, and providing legislative, regulatory, and governance recommendations. The core argument is that closing the accountability gap requires doctrinal reconstruction. Anything less leaves ESG as what it has already too often become, a sophisticated instrument for manufacturing plausible deniability at an industrial scale.
