Parliamentary panel pitches for ESG oversight body to combat greenwashing activities
ESG oversight body
to actively combat
greenwashing
activities and also put in place penal provisions for fraudulent ESG claims, according to a
Parliamentary panel
.
Generally, greenwashing refers to claims by companies about any product or service having a climate-friendly impact.
ESG (Environmental, Social, and Governance) principles are part of the Companies Act, 2013.
In its report tabled in Parliament on Monday, the Standing Committee on Finance mentioned the ministry's demurral against establishing a dedicated ESG oversight body, citing that the prevailing disclosure-based regime, underpinned by a company board's accountability and extant penal provisions, constitutes an adequate monitoring mechanism.
Against this backdrop, the panel urged the ministry to "establish a dedicated ESG oversight body for actively combating greenwashing through specialised forensic expertise" as well as formulate sector-specific guidelines and extend targeted support to Micro, Small, and Medium Enterprises (MSMEs).
Besides, it should be ensured that there is "expeditious and deterrent application of penal provisions against fraudulent ESG claims," the action-taken report said.
"The Committee are of the view that while Section 166(2) provides a broad stroke, a direct and unambiguous legislative mandate will elevate ESG considerations to a non-negotiable strategic imperative for Boards, providing a clear legal bedrock for accountability in integrating sustainability into core business strategies, thereby transitioning from mere disclosure to fundamental corporate responsibility," it noted.
According to the committee, there is a need for statutory amendments to the Companies Act, 2013, to explicitly enshrine ESG objectives as integral components of Directors' fiduciary duties.
The recommendations are part of the panel's action taken by the government on the observations/recommendations contained in the 10th report of the Standing Committee on Finance on 'Demands for Grants (2025-26) of the Ministry of Corporate Affairs'.
Meanwhile, the committee has asked the ministry to develop a proactive and multi-pronged strategy to combat financial crimes at their genesis as well as bolster the investigatory and prosecutorial efficacy of the Serious Fraud Investigation Office (SFIO).
Also, it has urged the ministry to accelerate hiring at the National Financial Reporting Authority (NFRA) as well as put in place a "truly transparent and result-oriented CSR oversight system".
Under the Companies Act, 2013, a certain class of profitable companies is required to shell out at least 2 per cent of their three-year average annual net profit towards
Corporate Social Responsibility
(CSR) activities.
The ministry is implementing the Act.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
Sebi chief urges redefining independent directors' role for accountability
Capital markets regulator Sebi chief Tuhin Kanta Pandey on Friday called for redefining the role of independent directors, emphasising that they must be regarded and treated as stewards of accountability. "We cannot continue to view them as honorary appointees or friendly critics. They must be viewed and treated as stewards of accountability," Pandey said while addressing the 2025 Annual Directors' Conclave. According to him, this transformation requires a change in multiple areas. Independent directors must feel free to dissent and be well-versed in emerging risks such as AI governance, cyber threats, and ESG disclosures. Their orientation should be ongoing, rather than limited to a one-time induction. Pandey stressed the need for broader diversity in board composition, drawing talent from varied sectors, younger professionals, regional voices, and individuals outside familiar networks. "A board that never disagrees is not aligned - it's asleep. Divergent views, when rooted in purpose and mutual respect, strengthen the board. They test assumptions, lead to deeper discussions, and enable constructive decision-making," he stated. He outlined a vision for "shaping tomorrow's board", which involves shifting the focus from compliance to culture and embracing technology for smarter governance. Governance, he said, is no longer just about policies but about tone, behaviour, and values in action. On technology adoption, Pandey urged boards to stop viewing digital tools as burdens or threats. Instead, they should demand real-time dashboards that provide meaningful insights -- not just volumes of PDF reports. These dashboards could track indicators such as red-flag employee exits, whistle-blower complaints, ESG trends, or vendor concentration risks, bringing them to the board's attention before they become public issues. "Governance intelligence must become as routine as financial intelligence," he asserted. While acknowledging the significance of gender diversity, regional representation, and generational diversity, he stressed the importance of cognitive diversity, asking: "Do we have enough contrarian thinkers in the room? Do we have people who see risk differently -- not more fearfully, but more perceptively?" Pandey said the focus must be on building future-ready boards. Reimagining the boardroom of the future, he envisioned it not as a ceremonial forum but as a learning organisation -- one that protects and creates long-term stakeholder trust, does not avoid uncomfortable questions, and remains committed to the integrity of the institution beyond quarterly targets or promoter interests.
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
Bruised by Trump, Modi trying to portray himself as farmers' champion: Cong
Now that he is "bruised and battered" by the "Trump onslaught", Prime Minister Narendra Modi is trying to portray himself as the great champion of Indian farmers, but "nobody is fooled", the Congress said on Friday. After US President Donald Trump doubled trade tariffs on India to 50 per cent over its crude oil imports from Russia, Modi on Thursday said India will never compromise on the interests of its farmers and that he was prepared to bear a significant personal cost if necessary. Congress general secretary in-charge communications Jairam Ramesh said there was a time five years ago when the PM mocked protesting farmers as 'andolanjeevi' in Parliament. In November 2019, the PM was all ready to take India into the RCEP trade agreement that would have grievously hurt Indian farmers and dairy producers, the Congress leader claimed. Only sustained pressure by the Congress and farmers' organisations forced Modi to change his mind at the very last minute, he said. "Now bruised and battered by the Trump onslaught, Mr. Modi is trying to portray himself as the great champion of Indian farmers. Nobody is fooled," he added. The US wants reduced tariffs on products like corn, soybeans, apples, almonds and ethanol, as well as increased access for US dairy products. New Delhi is, however, resisting these demands as these will have a direct bearing on farmers. "For us, the interests of farmers are the top priority. India will never compromise on the interests of its farmers, dairy farmers and fishermen," Modi said at a global conference to mark the birth centenary of late agri-scientist M S Swaminathan. "I know that I will personally have to pay a heavy price. But I am ready for it," he said.
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
PM-KISAN: ₹15,127.88 cr disbursed to beneficiaries in Karnataka since FY20
A total of Rs 15,127.88 crore was disbursed to beneficiaries from Karnataka under the central flagship scheme PM-KISAN since April 2020, Parliament was informed on Friday. Karnataka implemented the PM-KISAN scheme around the time the central government launched it nationally on February 24, 2019. "A farmer-centric digital infrastructure has ensured that the benefits of the scheme reach all eligible farmers across the country without the involvement of any intermediaries," said Minister of State for Agriculture Ramnath Thakur, in his written reply to the Rajya Sabha. As per the data placed before the Upper House on disbursal amount from the 5th installment onwards, a total of Rs 15,127.88 crore was transferred to the beneficiaries' bank accounts in Karnataka. The 20th installment of Rs 877.32 crore was disbursed for the April-June quarter to 43,29,135 beneficiaries. As on August 8, the Centre disbursed over Rs 3.90 lakh crore to farmers across the country in 20 installments since the inception of the scheme. The PM-KISAN aims to supplement the financial needs of farmers with cultivable land-holding. Under the scheme, a financial benefit of Rs 6,000 per year is transferred in three equal installments into the Aadhaar seeded bank accounts of farmers through the Direct Benefit Transfer (DBT) mode.
