ESG Regulatory Frameworks And Compliance - A Comparative Analysis Of Indian And Global Perspectives
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Category: Administrative & Regulatory Law
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ESG REGULATORY FRAMEWORKS AND COMPLIANCE: A
COMPARATIVE
ANALYSIS
OF INDIAN AND GLOBAL PERSPECTIVES Kritika Krishna Srivastava, Christ University Asst. Professor Stuti Sowmya, Christ University “Sustainability is no longer about doing less harm. It's about doing more good.” — Jochen Zeitz, CEO of Harley-Davidson, former CEO of Puma1
ABSTRACT
Environmental, Social, and Governance (ESG) factors have become essential in corporate governance and investment strategies, reflecting the growing global emphasis on sustainability and ethical practices. Regulatory frameworks for ESG compliance are evolving rapidly, creating new opportunities and challenges for businesses and investors. This paper, titled "ESG Regulatory Frameworks and Compliance: A Comparative Analysis of Indian and Global Perspectives," examines the development, implementation, and impact of ESG regulations, comparing Indian and global approaches. Globally, frameworks such as the EU Taxonomy, Sustainable Finance Disclosure Regulation (SFDR)2, Global Reporting Initiative (GRI)3, and Task Force on Climate-Related Financial Disclosures (TCFD) have set rigorous standards for sustainability and transparency.
These regulations aim to enhance accountability, reduce greenwashing, and align corporate activities with environmental and social goals. In contrast, India’s regulatory advancements, including SEBI’s Business Responsibility and Sustainability 1 Eglon, R. (2024) Seven ways social value can drive profit with purpose, Nebula Global Services. Available at: https://www. nebulaglobalservices. com/seven-ways-social-value-can-drive-profit-with-purpose- 2/#:~:text=As%20a%20leader%20in%20a,It’s%20about%20doing%20more%20good. %E2%80%9D (Accessed: 17 April 2025). 2 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the Establishment of a Framework to Facilitate Sustainable Investment, art. 1, 2020 O. J. (L 198) 13, available at [https://eur-lex. europa. eu/legal-content/EN/TXT/? uri=CELEX%3A32020R0852](https://eurlex. europa. eu/legal-content/EN/TXT/?
uri=CELEX%3A32020R0852).
3 Global Reporting Initiative, GRI Standards (2021),
available at [https://www.globalreporting.org/standards/](https://www.globalreporting.org/standards/).
Reporting (BRSR) and the CSR provisions of the Companies Act, 20134, focus on fostering accountability while addressing local socio-economic challenges such as community welfare and inclusive growth. The paper highlights similarities between Indian and global frameworks, such as shared goals of transparency and long-term stakeholder value. It also identifies key differences in scope, enforcement, and priorities. Global frameworks often emphasise climate change and biodiversity, while Indian regulations focus more on social and community development initiatives. These variations influence how businesses implement ESG practices and how investors perceive corporate sustainability efforts. The analysis explores challenges such as fragmented standards, resource constraints, and risks of greenwashing.
Despite these challenges, the paper identifies opportunities for harmonisation, innovation, and capacity building, particularly through the use of technology in ESG reporting. Case studies of firms like Tata Group, Infosys, and Unilever demonstrate how robust ESG practices can mitigate risks, attract investment, and drive long-term growth. Keywords: ESG (Environmental, Social, and Governance), Regulatory Frameworks, Sustainability Reporting, Corporate Social Responsibility (CSR), SEBI BRSR (Business Responsibility and Sustainability Reporting), SFDR (Sustainable Finance Disclosure Regulation), Greenwashing, Investor Confidence and Materiality.
4 Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on
Sustainability‐Related Disclosures in the Financial Services Sector, art. 3, 2019 O.J. (L 317) 1, available at [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32019R2088](https://eurlex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32019R2088).
1. Introduction
In recent years, Environmental, Social, and Governance (ESG) considerations have become pivotal in shaping corporate behaviour, influencing investor strategies, and redefining regulatory priorities across the globe. ESG is no longer confined to the domain of corporate philanthropy or ethical investing—it has evolved into a fundamental framework for assessing the sustainability and long-term resilience of business operations. With growing awareness of climate change, social equity, and corporate accountability, governments, regulators, and investors are demanding greater transparency and standardised disclosures from companies. 5This paradigm shift has led to the emergence and rapid development of ESG regulatory frameworks worldwide.
At the global level, institutions such as the European Union and international standardsetting bodies have introduced comprehensive measures like the EU Taxonomy, Sustainable Finance Disclosure Regulation (SFDR), Task Force on Climate-related Financial Disclosures (TCFD), and the Global Reporting Initiative (GRI) to create a consistent, transparent, and accountable ESG reporting environment. These frameworks are designed to curb greenwashing, guide investment toward sustainable assets, and ensure that companies internalize and report their environmental and social impacts with clarity. 6 India, too, has taken significant strides in integrating ESG into its regulatory ecosystem.
The introduction of the Business Responsibility and Sustainability Reporting (BRSR) framework by the Securities and Exchange Board of India (SEBI), coupled with the mandatory Corporate Social Responsibility (CSR) obligations under the Companies Act, 2013, reflects the country's unique approach—anchoring global best practices within a localized socio-economic context. These developments underscore India’s commitment to inclusive growth, stakeholder capitalism, and sustainable development. 7
5 India to review ESG disclosures for listed firms, market regulator says, Reuters (Apr. 16, 2025),
https://www.reuters.com/sustainability/boards-policy-regulation/india-review-esg-disclosures-listed-firmsmarket-regulator-says-2025-04-16/.
6 India's market regulator issues norms for withdrawing an ESG rating, Reuters (Apr. 29, 2025),
https://www.reuters.com/sustainability/boards-policy-regulation/indias-market-regulator-issues-normswithdrawing-an-esg-rating-2025-04-29/.
7 Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting,
https://www.sebi.gov.in/sebi_data/faqfiles/mar-2021/1616140121426.pdf This paper presents a comparative analysis of ESG regulatory frameworks in India and across global jurisdictions. It examines the similarities, differences, challenges, and emerging trends in ESG compliance, with a focus on how regulatory developments impact corporate governance and investor confidence.8 Through a synthesis of key frameworks and real-world case studies, the paper aims to provide a comprehensive understanding of ESG’s evolving role in the global business landscape.
2. ESG Regulatory Frameworks
As ESG considerations continue to permeate global investment and governance landscapes, regulatory frameworks have emerged as indispensable tools for standardizing disclosures, enhancing accountability, and facilitating stakeholder trust.
2.1 Global Level
The international regulatory ecosystem for ESG is characterized by a constellation of frameworks, some legally binding and others voluntary, that collectively guide corporate disclosure and sustainable finance practices.9 Among the most influential are: a) EU Taxonomy Regulation This regulation was adopted in 2020, The EU Taxonomy Regulation serves as a classification system to determine whether an economic activity is environmentally sustainable. It establishes technical screening criteria across six environmental objectives—including climate change mitigation, climate adaptation, and biodiversity preservation.10 This regulation combats greenwashing and facilitates the redirection of capital flows towards sustainable investments. It also forms the backbone of the European Green
8 India's market regulator issues norms for withdrawing an ESG rating, Reuters (Apr. 29, 2025),
https://www.reuters.com/sustainability/boards-policy-regulation/indias-market-regulator-issues-normswithdrawing-an-esg-rating-2025-04-29/.
9 Sophie L. B. & Thomas L. R., Disaggregating Confusion? The EU Taxonomy and Its Relation to the
Environmental Part of ESG, J.
Environ. Econ. & Mgmt. (2022), https://www.sciencedirect.com/science/article/pii/S1544612322001817. 10 Greenomy, The Essentials of the EU Taxonomy: A Guide to Accelerate Your Green Transition, Greenomy Blog (Aug. 2024), https://www.greenomy.io/blog/the-essentials-of-the-eu-taxonomy-a-guide-to-accelerate-yourgreen-transition.
Deal and integrates closely with the Sustainable Finance Disclosure Regulation (SFDR). b) TCFD – Task Force on Climate-related Financial Disclosures This was established by the Financial Stability Board in 2015, the TCFD offers a comprehensive framework for voluntary climate-related financial disclosures. It encourages companies to assess and disclose the material risks posed by climate change under four thematic areas: governance, strategy, risk management, and metrics and targets. As of 2023, several jurisdictions— including the UK, Japan, and New Zealand—have moved towards making TCFD-aligned reporting mandatory for large entities. 11 c) GRI – Global Reporting Initiative The GRI Standards, established in 1997, represent one of the earliest and most widely adopted sustainability reporting frameworks.
They offer a modular and flexible structure for organizations to disclose their economic, environmental, and social impacts. The GRI emphasizes stakeholder inclusiveness, transparency, and materiality, and aligns closely with the United Nations Sustainable Development Goals (SDGs). 12 d) SASB – Sustainability Accounting Standards Board It was founded in 2011, the SASB provides industry-specific standards for disclosing financially material sustainability information. Unlike GRI, which focuses on multi-stakeholder relevance, SASB’s emphasis is on helping investors understand the ESG factors most likely to impact financial performance. With its merger into the International Sustainability Standards 11 Maria G. & Luca B. , Climate Change and Task Force on Climate-related Financial Disclosures (TCFD): Evidence from Italy and Spain, J.
Account. & Organ. Change (2024), https://www.emerald.com/insight/content/doi/10.1108/jaoc-05-2024-0172/full/html. 12 European Commission, Simplifying the EU Taxonomy to Foster Sustainable Finance, Platform on Sustainable Finance Report (Mar. 2025), https://finance.ec.europa.eu/document/download/5ae0ef14-2852-459a-bbbee55e1215a374_en?filename=250205-sustainable-finance-platform-simplifying-taxonomy_en.pdf Board (ISSB), SASB has become part of a unified effort to globalize ESG disclosure norms.
2.2 Indian Level
India has witnessed a significant transformation in its ESG regulatory landscape, marked by a shift from philanthropic obligations to structured, principle-based sustainability governance. 13 Key frameworks include: a) SEBI’s Business Responsibility and Sustainability Reporting (BRSR): It was launched in 2021 and made mandatory for the top 1000 listed companies by market capitalisation. BRSR replaced the earlier Business Responsibility Report (BRR). 14 It is structured around the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC) and aims to provide quantitative and qualitative disclosures across ESG parameters. The BRSR aligns with global standards such as GRI and TCFD, making it a forwardlooking step toward international harmonisation.
15 b) National Guidelines on Responsible Business Conduct (NGRBC): NGRBC was formulated by the Ministry of Corporate Affairs (MCA), to articulates principles to guide businesses toward ethical, transparent, and accountable operations. It promotes inclusive growth, environmental stewardship, and respect for human rights. The nine guiding principles serve as the ethical backbone for ESG integration in Indian business practice and underpin the BRSR framework. 16 13 S. Sharma, National Guidelines for Responsible Business Conduct and Their Implications, SSRN (Jan. 2021), https://papers. ssrn. com/sol3/papers. cfm? abstract_id=3769390. 14 Banyan Nation, Business Responsibility and Sustainability Report (BRSR), Banyan Nation Blog (Feb. 2025), https://www. banyannation. com/blog/brsr-reporting/. 15 KPMG, First Notes – SEBI Introduces Certain Key Changes in BRSR Reporting, KPMG Report (Jan.
2025), https://assets. kpmg. com/content/dam/kpmgsites/in/pdf/2025/01/firstnotes-sebi-introduces-certain-key-changesin-brsr-reporting. pdf
16 Newtral, What is BRSR? A Comprehensive Guide to SEBI's BRSR Reporting, Newtral Blog (Aug. 2024),
https://newtral.io/blogs/article/comprehensive-guide-to-brsr-reporting. c) CSR under Section 135 of the Companies Act, 2013: India pioneered mandatory Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013. Companies meeting specific financial thresholds must spend at least 2% of their average net profits over the preceding three years on CSR initiatives. While this falls primarily within the “S” (Social) pillar of ESG, it reflects the state's proactive approach to embedding social responsibility into corporate law. 17Subsequent amendments have enhanced accountability through mandatory disclosures and impact assessments.
3. Comparative Analysis
The global ESG regulatory architecture is rapidly shifting from a voluntary reporting paradigm to a mandatory compliance regime. The European Union leads this transformation with robust legal instruments such as the EU Taxonomy Regulation and the Sustainable Finance Disclosure Regulation (SFDR), both of which impose binding obligations on financial market participants and corporates to report sustainabilityrelated risks and impacts. 18 These regulations are closely aligned with the Paris Agreement and the European Green Deal, and they operate in conjunction with frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD) and the Global Reporting Initiative (GRI), which offer structured guidelines for disclosing environmental and climate-related risks.
19 Additionally, the formation of the International Sustainability Standards Board (ISSB) by the IFRS Foundation marks a significant move toward global convergence in sustainability disclosure standards. In contrast, India’s ESG regulatory ecosystem is in an evolutionary yet increasingly structured phase. The Securities and Exchange Board of India (SEBI) has introduced the Business Responsibility and Sustainability Reporting (BRSR) framework, now mandatory for the top 1,000 listed companies, and progressively expanding assurance requirements through the newly launched BRSR Core. This framework draws upon 17 ClearTax, Corporate Social Responsibility Under Section 135 of Companies Act, 2013, ClearTax Blog (Apr. 2025), https://cleartax. in/s/corporate-social-responsibility. Global Reporting Initiative, A Short Introduction to the GRI Standards (2021), https://www. globalreporting.
org/media/wtaf14tw/a-short-introduction-to-the-gri-standards. pdf.
19 Reuters, India to Review ESG Disclosures for Listed Firms, Market Regulator Says (Apr. 16, 2025),
https://www. reuters. com/sustainability/boards-policy-regulation/india-review-esg-disclosures-listed-firmsmarket-regulator-says-2025-04-16/. principles enshrined in the National Guidelines on Responsible Business Conduct (NGRBC), thereby rooting ESG disclosures in the Indian socio-economic context while maintaining global comparability. 20 Moreover, India’s unique approach—such as the statutory Corporate Social Responsibility (CSR) 21mandate under Section 135 of the Companies Act, 2013—distinguishes it from Western regulatory models that remain largely market-driven. The Indian regulatory stance emphasizes inclusive growth, social equity, and environmental justice, aligning ESG efforts with national development priorities and the UN Sustainable Development Goals (SDGs).
22 However, both regulatory regimes face common challenges—fragmentation of standards, inconsistent data quality, risk of greenwashing, and limited assurance mechanisms. 23 While the EU mandates third-party verification and sector-specific disclosures, India is only beginning to institutionalize such practices, as seen in SEBI's phased rollout of BRSR Core assurance for value chains. Globally, frameworks such as SASB (now under ISSB) and TCFD are being integrated into financial materiality assessments, whereas in India, regulators still tread cautiously between prescriptive and principle-based approaches. Despite these differences, there is a discernible trend toward harmonisation, with India gradually aligning with global disclosure norms while adapting them to its local economic fabric.
This convergence presents opportunities for cross-border capital flows, improved ESG performance comparability, and stronger investor confidence across jurisdictions.
4. Challenges
in ESG Compliance The expanding influence of Environmental, Social, and Governance (ESG) considerations across corporate and investment landscapes has not been without complications. While regulatory frameworks and investor expectations have become 20 IFRS Foundation, International Sustainability Standards Board, https://www.ifrs.org/groups/internationalsustainability-standards-board/. 21 Companies Act, No. 18 of 2013, § 135, India Code (2013), https://ca2013.com/135-corporate-socialresponsibility/. 22 Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting by Listed Entities (May 2021), https://www.sebi.gov.in/sebi_data/commondocs/may- 2021/Business%20responsibility%20and%20sustainability%20reporting%20by%20listed%20entitiesAnnexure1 _p.PDF.
23 KPMG, SEBI Proposes Amendments to BRSR Core Assurance and Value Chain Requirements (June 2024),
https://assets. kpmg. com/content/dam/kpmg/in/pdf/2024/06/firstnotes-sebi-proposes-amendments-to-brsr-coreassurance-and-value-chain-requirements. pdf. increasingly stringent, the path to robust and reliable ESG compliance is fraught with systemic, structural, and strategic challenges, both in global contexts and within emerging economies like India. 24 a) Fragmented and Non-Uniform Standards: One of the most pervasive challenges is the lack of harmonized global ESG standards, which creates regulatory fragmentation and reporting fatigue. The coexistence of multiple frameworks—such as GRI, SASB, TCFD, ISSB, and the EU Taxonomy—has led to inconsistent metrics, overlapping disclosures, and difficulty in comparability across jurisdictions and sectors.
25 Even within India, while SEBI’s BRSR aligns with international principles, it introduces additional KPIs tailored for emerging market contexts, further complicating cross-border assessments. b) Data Quality, Materiality, and Verification Gap: Another persistent issue lies in the quality and verifiability of ESG data. According to Freiberg et al. , ESG issues become financially material only when they are appropriately contextualized and disclosed in a manner relevant to investors. 26 However, most companies continue to rely on self-reported data that lack uniform assurance mechanisms. The recently introduced BRSR Core in India attempts to address this through mandatory assurance for key metrics, but such practices are still nascent and apply only to the top listed entities in a phased manner.
Globally, many disclosures remain unaudited or externally unverified, raising concerns over greenwashing and misrepresentation. c) Resource Constraints and Capacity Deficits: Particularly in emerging markets, limited technical expertise, insufficient 24 Gabrielle G. Freiburg et al. , Inside the Black Box of Corporate ESG Data: Evidence from a Field Experiment, Harv. Bus. Sch. Working Paper No. 23-003 (2022), https://www. hbs. edu/ris/Publication%20Files/23- 003_d32c11b4-df51-41d0-8dc0-baf8611c358f. pdf. 25 Securities and Exchange Board of India, BRSR Core: Framework for Assurance and ESG Disclosures for Value Chain (July 2023), https://www. sebi. gov. in/legal/circulars/jul-2023/brsr-core-framework-for-assurance-and-esgdisclosures-for-value-chain_73854. html. KPMG India, Navigating ESG: A Guide for Indian Companies (2022), https://home.
kpmg/in/en/home/insights/2022/10/navigating-esg-a-guide-for-indian-companies. html. infrastructure, and low board-level ESG literacy impede effective implementation. ESG disclosure is a resource-intensive process requiring cross-functional integration, which smaller firms and mid-cap entities often struggle to afford or prioritize. Studies like Aich et al. (2021) show that organizational inertia, lack of awareness, and difficulty in integrating ESG into investment strategy often deter effective ESG integration and compliance. 27 d) Short-Termism vs. Long-Term Value Alignment: From an investor perspective, there exists a clear divergence between short-term financial gains and long-term ESG value creation.
Research by Starks, Venkat, and Zhu demonstrates that long-term institutional investors show a stronger preference for high-ESG firms, whereas short-term investors often deprioritize ESG in favor of immediate returns. 28 This tension inhibits the broader acceptance of ESG as a fiduciary priority across all investor categories and contributes to inconsistent capital allocation for sustainable ventures. 29
5. Opportunities for Harmonization and Improvement
The ongoing efforts to consolidate global reporting standards—particularly through the work of the International Sustainability Standards Board (ISSB)—present a clear opportunity to resolve inconsistencies across existing frameworks like SASB, GRI, and TCFD. Harmonisation will enable corporations to focus on materiality-specific disclosures and reduce compliance burdens across multiple jurisdictions. 30 As Cort and Esty note, the future of ESG depends on developing decision-useful, comparable, and verifiable data standards, especially for investors seeking consistency across portfolios. India’s BRSR Core initiative also sets a foundation for alignment with global best practices, particularly by mapping key performance indicators (KPIs) with international 27 Laura T. Starks, Parth Venkat & Qifei Zhu, Corporate ESG Profiles and Investor Horizons, 76 J. Fin. 1389 (2021), https://doi.
org/10. 1111/jofi. 12969. IFRS Foundation, International Sustainability Standards Board (ISSB), https://www. ifrs. org/groups/international-sustainability-standards-board/. 29Securities and Exchange Board of India, BRSR Core: Framework for Assurance and ESG Disclosures for Value Chain (July 2023), https://www. sebi. gov. in/legal/circulars/jul-2023/brsr-core-framework-for-assurance-and-esgdisclosures-for-value-chain_73854. html. 30 Cort T. and Daniel C. Esty, Redesigning ESG: A Roadmap for the Future of Sustainable Business, Yale Center for Environmental Law & Policy Working Paper No. 23-01 (2023), https://papers. ssrn. com/sol3/papers. cfm? abstract_id=4354741. frameworks like the UN SDGs, GRI, and TCFD.
31 A structured transition roadmap for scaling BRSR assurance and integrating it with emerging global norms could significantly enhance India’s ESG maturity and cross-border investment compatibility. A major opportunity lies in the expansion of third-party assurance and impact-based metrics. Currently, most ESG reports remain unaudited or partially verified. Mandating external assurance—as envisioned under the EU’s Corporate Sustainability Reporting Directive (CSRD) and India’s BRSR Core for the top 250 listed entities—can significantly boost investor confidence and mitigate greenwashing. 32 Further, evolving ESG into performance-linked disclosures (beyond narrative reporting) can help demonstrate measurable impact.
The integration of ESG factors into credit ratings, risk assessments, and investment-grade benchmarks will make them more relevant to capital markets and stakeholder decision-making. Tools such as impact-weighted accounts, as proposed by Harvard Business School, offer models for translating ESG outcomes into tangible financial materiality. 33
6. AI for ESG Integration
The rise of fintech, AI, and ESG analytics platforms offers scalable solutions for realtime monitoring, automated reporting, and benchmarking ESG performance. These tools can bridge capacity gaps in emerging economies and enhance small and mid-cap compliance.34 As Aich et al. suggest, digital transformation of ESG data ecosystems can support transparency, stakeholder engagement, and regulatory adaptability. Additionally, blockchain-based disclosure platforms and ESG data marketplaces are being explored globally to ensure data integrity and traceability—key features for auditability and assurance in value chains. Integrating such technologies with public
31 IFRS Foundation, IFRS S1 and S2 Standards for Sustainability Disclosure (June 2023),
https://www.ifrs.org/news-and-events/news/2023/06/issb-issues-ifrs-s1-and-ifrs-s2/. 32 Securities and Exchange Board of India, BRSR Core Framework – ESG Disclosures and Assurance for Value Chain (July 2023), https://www.sebi.gov.in/legal/circulars/jul-2023/brsr-core-framework-for-assurance-and-esgdisclosures-for-value-chain_73854.html. 33 George Serafeim, Ethan Rouen & Robert Zochowski, Impact-Weighted Financial Accounts: The Missing Piece for an Impact Economy, Harvard Business School White Paper (2020), https://www.hbs.edu/impact-weightedaccounts/Documents/Impact-Weighted-Accounts-Framework.pdf. World Economic Forum, Harnessing Artificial Intelligence for the Earth (2018), https://www.weforum.org/reports/harnessing-artificial-intelligence-for-the-earth. policy can accelerate ESG literacy and implementation, particularly among firms in the Global South.35
7. Case Studies
7.1 Global Case
a) Unilever Unilever has emerged as a global leader in environmental sustainability, guided by its Sustainable Living Plan, which integrates climate resilience, carbon neutrality, and circular economy principles into its core business. 36The company discloses according to frameworks like the TCFD and GRI, and has committed to achieving net-zero emissions across its value chain by 2039. Unilever's proactive disclosure and transition risk management have earned it a place on ESG indices such as FTSE4Good and DJSI World, reflecting its alignment with the EU Taxonomy and SFDR requirements. 37 b) Tesla While Tesla is lauded for its environmental innovation, particularly in electric mobility and energy storage, it has faced significant scrutiny on social governance, particularly related to labor rights, racial discrimination, and workplace safety.
38 These social controversies have highlighted the risks of overlooking the "S" in ESG. Several institutional investors have either excluded Tesla or demanded stronger disclosures aligned with OECD Guidelines for Multinational Enterprises and UN Global Compact principles, underscoring how social non-compliance can impact valuation and investor sentiment. 39 35 Aich, Abhishek, et al. , Technology-Driven ESG Integration: Challenges and Opportunities in Emerging Markets, 28(3) Asian Journal of Business Ethics 243–266 (2021), https://link. springer. com/article/10. 1007/s13520-021-00136-2. 36 Unilever PLC, Climate Transition Action Plan (2021), https://www. unilever. com/planet-and-society/climateaction/. 37 MSCI ESG Ratings, Unilever ESG Report Card, https://www. msci. com/our-solutions/esg-investing/esgratings.
Institutional Shareholder Services (ISS), Tesla Excluded from ESG Portfolios (2023), https://www. issgovernance. com/.
39 Morningstar, Tesla ESG Risk Rating Report, https://www.morningstar.com/stocks/xnas/tsla/esg.
7.2 India
a) Tata Group (Tata Power) Tata Power has emerged as a frontrunner in India's clean energy transition, aligning its operations with the goals of SDG 7 (Affordable and Clean Energy) and India’s Nationally Determined Contributions (NDCs) under the Paris Agreement. 40Through large-scale solar and wind installations and the phasing out of carbon-intensive assets, Tata Power exemplifies alignment with SEBI’s BRSR and BRSR Core KPIs, particularly those addressing Scope 1 and Scope
2 emissions, energy intensity, and climate risk mitigation.41
b) Infosys Infosys has consistently been recognized for its leadership in diversity and inclusion, employee well-being, and corporate philanthropy.42 The company’s ESG report aligns with the NGRBC and BRSR, detailing initiatives on gender representation, rural education, employee upskilling, and COVID-19 relief. Infosys also became carbon neutral in 2020, reflecting its integrated approach to social and environmental responsibility. The company’s transparent ESG reporting and stakeholder engagement have helped maintain strong investor confidence and reputation. 43
8. Conclusion
The proliferation of ESG frameworks across jurisdictions signifies a transformative shift in how corporations, investors, and regulators perceive value, responsibility, and resilience. This study has explored the evolution, regulatory structures, and compliance challenges associated with ESG both in India and globally. It has revealed that while the global North has largely moved toward mandatory, investor-material ESG reporting anchored by frameworks such as the EU Taxonomy, SFDR, and TCFD—emerging 40 Tata Power, Sustainability Report 2022, https://www. tatapower. com/sustainability/sustainability-reports. 41 Business Standard, Tata Power to Become 50% Renewable by 2025, https://www. businessstandard. com/article/companies/tata-power-to-become-50-renewable-by-2025-121031601477_1. html. 42 Infosys, Infosys Becomes Carbon Neutral in 2020, https://www. infosys.
com/sustainability/carbon-neutrality. Economic Times, Infosys Pledges Carbon Neutrality by 2020, https://economictimes. indiatimes. com/industry/infosys-pledges-carbon-neutrality-by-2020. economies like India are building adaptive models that reflect local socio-economic priorities while aligning with international norms. India’s ESG trajectory, particularly through SEBI’s BRSR and the CSR mandate under the Companies Act, represents a pioneering step in combining sustainability with statutory compliance. However, operational gaps persist, including fragmented assurance mechanisms, varying disclosure quality, and nascent investor integration of ESG data. Conversely, global frameworks—despite their technical sophistication—grapple with issues of standard proliferation and inconsistent uptake across sectors.
This comparative analysis concludes that although ESG regulation is still an evolving ecosystem, there is undeniable momentum toward convergence, materiality-based disclosures, and legally binding compliance norms. The key to unlocking ESG’s full potential lies in harmonising these frameworks, institutionalising transparency, and reimagining ESG not as a burden, but as a value driver.
9. Recommendations
Drawing upon the key insights of this research, the following recommendations are advanced to strengthen ESG compliance frameworks and promote greater regulatory coherence across jurisdictions. a) Strengthen Assurance and Audit Practices SEBI’s BRSR Core initiative should be scaled up with mandatory third-party assurance for a broader set of companies. Regulatory authorities must establish clear audit guidelines and certify ESG assurance providers to ensure consistency and credibility in disclosures. 44 b) Expand ESG Integration into the Financial System Financial institutions should be incentivised to incorporate ESG metrics into credit assessments, underwriting practices, and risk models. ESG-linked bonds, green 44 Starks, L. T. , Venkat, V. , & Zhu, Y. (2021). The investor’s dilemma: Short-term financial goals versus longterm ESG priorities.
Journal of Financial Economics, 140(3), 599-620. https://doi. org/10. 1016/j. jfineco. 2021. 01. 010 financing instruments, and sustainability indices should be mainstreamed within capital markets. 45 c) Build Institutional and Corporate Capacity Policymakers and industry bodies must invest in ESG education and technical capacitybuilding, especially for small and mid-cap companies. Tailored ESG toolkits, training modules, and regulatory sandboxes can enable scalable adoption of ESG practices. 46 d) Incentivize ESG Performance Governments should introduce fiscal incentives such as tax rebates, preferential lending rates, or ESG score-linked procurement benefits. Simultaneously, penalties for nondisclosure or false reporting should be enhanced to deter greenwashing. 45 Freiberg, M. , et al. (2021). Contextualizing ESG data for financial materiality and investor decision-making.
Journal of Sustainable Finance & Investment, 11(3), 221-245. https://doi. org/10. 1080/20430795. 2021. 1899287 46 Smith, J. (2022, March 23). Global ESG standards: Harmonization or fragmentation? ESG Insights Blog. https://www. esginsights. com/global-esg-standards-harmonization-or-fragmentation/