India’s new ESG rules to address corporate greenwashing

INDIA’S new environmental rules will help eliminate greenwashing by requiring companies to submit detailed emissions data starting next fiscal year, according to KPMG India’s ESG head.

Under the rules, corporates will have to provide data on more than 120 metrics, including from the past 2 years. The new norms are expected to improve transparency with investors and the government, said Shivananda Shetty, partner and lead at KPMG India’s ESG and Climate Change practice.

Collecting more data “would definitely help address greenwashing,” Shetty told Bloomberg Television in an interview on Friday (Sep 2).

India’s stock markets regulator mandated the roll-out of new reporting standards for companies in May 2022. The government plans to compile information from the country’s top 1,000 companies starting Apr 1, 2023. The rules are intended to help India, the world’s third-largest polluter, cut emissions and meet a target of net zero emissions by 2070.

The new norms track with a global widening of disclosures sought by investors who want insight into how companies manage risks and improve governance and diversity in their workforces and value chains. India, which is expected to be among the hardest hit by climate change, ranked the lowest among 180 countries in the World Economic Forum’s latest Environmental Performance Index.

Shetty said the rules, which may extend to unlisted companies in the future, will push smaller firms to report on how they plan to mitigate or adapt to climate risks, along with describing the costs of those steps. BLOOMBERG