REASSESSING COMMERCIAL REGULATION THROUGH ESG AND SUSTAINABLE GOVERNANCE PRINCIPLES

DOI: https://doi.org/10.5281/zenodo.20225596

Authors:

Dr. Sapna Bansal, Dr. Atul Kumar, Ms. Prakriti Chahar, Dr. Indra Daman Tiwari, Praneeta Jha

Keywords:

ESG, sustainable governance, corporate social responsibility, commercial regulation, BRSR, CSRD, stakeholder theory, green washing, company law, sustainable finance.

Abstract:

One of the most significant trends in the current regulation of commercial activities is the rise of Environmental, Social and Governance (ESG) considerations with which companies must comply. This paper makes a critical examination of how ESG-led governance has emerged, what values it rests on, its structure and what it means for the traditional conception of the shareholder-primacy in commercial law, the changing role of corporate directors and the legal obligations of investors and institutional mechanisms. The paper provides an overview of the international standard-setting process and TCFD and IFRS Sustainability Standards, the European Union's CSRD, SFDR and CS3D before engaging with the experience of Indian regulation. It looks critically at the on-going issue of green washing practices, split standards of disclosure, lack of enforcement and the conflict between compulsory and voluntary practices. The authors conclude that comprehensively rethinking the regulation of commerce according to ESG principles would have to be guided by a paradigm change from communication to substantive obligations, which would be legally binding – accompanied by an internal framework of law that harmonizes the ESG regulations across company law, securities law, competition law and environmental law.

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