Embedding ESG Governance In Indian Corporate Law: Bridging Disclosure Mandates And Governance Integration
- IJLLR Journal
- Feb 15
- 2 min read
Nakihring Khumlo, School of Law, Christ (Deemed to be University), Bengaluru
ABSTRACT
Environmental, Social, and Governance (ESG) regulation has reshaped contemporary corporate governance by extending oversight beyond financial accountability toward sustainability oriented corporate responsibility. Climate related risks, labour rights failures, supply chain disruption, and ethical misconduct increasingly influence cash flows, cost of capital, and corporate reputation, prompting regulators and investors to demand comprehensive sustainability disclosure. ESG disclosure frameworks, therefore, seek to internalise environmental and social externalities within corporate decision-making, reframing corporate governance as a mechanism for managing long-term sustainability risks alongside shareholder returns.
India’s Business Responsibility and Sustainability Reporting (BRSR) framework marks a regulatory shift from largely voluntary corporate social responsibility initiatives to mandatory sustainability disclosure embedded within securities regulation. Introduced by the Securities and Exchange Board of India (SEBI) for the top 1,000 listed entities by market capitalization, BRSR aims to place sustainability reporting on a footing comparable to financial reporting and to align Indian practice with internationally recognised disclosure frameworks.
This article examines BRSR as a disclosure based governance instrument situated within the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR). Drawing on agency theory, stakeholder governance theory, and institutional compliance scholarship, it conceptualises a persistent mandate–practice gap between ESG reporting requirements and substantive governance integration. Through doctrinal analysis and comparative assessment of ESG regulatory models in the European Union and the United States, the article evaluates the governance effectiveness of BRSR. It argues that while BRSR has standardised sustainability disclosure for Indian listed companies, structural limitations of disclosure centric regulation and institutional capacity constraints impede its capacity to embed ESG considerations within board oversight, enterprise risk management, and executive accountability. The article proposes multi level reforms at regulatory, firm, and market ecosystem levels aimed at transforming ESG disclosure from procedural compliance into an integrated corporate‐governance architecture capable of influencing corporate strategy and long‐term value creation.
Keywords: ESG Governance, Business Responsibility and Sustainability Reporting (BRSR), Indian Corporate Law, Sustainability Disclosure, Stakeholder Governance, SEBI LODR Regulations, Corporate Board Oversight.
