The corporate affairs ministry should set up an 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 (August 4, 2025), 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).
