UNDERSTANDING ESG AND ITS LEGAL LANDSCAPE IN INDIA
AUTHOR – VASHNI ANGEL V* & DR. KRITIKA NAGPAL**
* BBA LL.B. (H) STUDENT AT AMITY LAW SCHOOL, NOIDA
** ASSISTANT PROFESSOR, AMITY UNIVERSITY, NOIDA
BEST CITATION – VASHNI ANGEL V & DR. KRITIKA NAGPAL, UNDERSTANDING ESG AND ITS LEGAL LANDSCAPE IN INDIA, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 5 (8) OF 2025, PG. 100-110, APIS – 3920 – 0001 & ISSN – 2583-2344.
ABSTRACT
This research explores the evolving legal landscape of Environmental, Social, and Governance (ESG) compliance in India, with a specific focus on its integration into the luxury fashion industry and mergers & acquisitions (M&A). ESG, once a peripheral concern, has now become central to corporate strategy, investment decisions, and brand reputation. The study traces ESG’s global evolution anchored in frameworks such as the United Nations’ Who Cares Wins report, the Global Reporting Initiative (GRI), and the Principles for Responsible Investment (PRI) and contextualizes its Indian adaptation through the Securities and Exchange Board of India’s (SEBI) Business Responsibility and Sustainability Report (BRSR) mandate.
Through sector-specific analysis, the paper highlights the critical ESG risks within India’s luxury fashion industry, including environmental pollution from textile production, labor exploitation in informal artisanal clusters, and governance gaps in family-run businesses. The lack of ESG compliance exposes Indian brands to reputational and investment risks, especially as global scrutiny intensifies following incidents like the Birkin-style bag scandal in China.
The research underscores the growing importance of ESG in M&A due diligence, where non-financial metrics such as ethical sourcing, carbon footprint, and board governance now influence deal valuations and post-acquisition performance. It also addresses jurisdictional overlaps between the National Green Tribunal (NGT) and National Company Law Tribunal (NCLT), posing challenges in ESG enforcement. Furthermore, the study reveals gaps in ESG reporting, standardization, data credibility, and the lack of independent assurance, particularly among mid-tier companies and Micro, Small and Medium Enterprises (MSMEs).
The paper concludes by advocating for culturally contextualized ESG frameworks, improved digital traceability, third-party certifications, and stronger regulatory coordination. For Indian companies to remain competitive in global markets, embedding ESG into core business models is not just advisable it is imperative.
Keywords: Environmental, Social, and Governance (ESG); India; luxury fashion; mergers & acquisitions (M&A); Securities and Exchange Board of India (SEBI); Business Responsibility and Sustainability Report (BRSR); Global Reporting Initiative (GRI); Principles for Responsible Investment (PRI); corporate governance; sustainability; due diligence