From the Aravallis to the Himalayas: Why India needs its ESG law now

The reality of environment in India in 2025 is not ambiguous as Aravalli continues to be chipped away by illegal mining, while Uttarakhand reels from land grabbing and infrastructure failures along its fragile corridors, and Himachal Pradesh continues to suffer every monsoon season from compounding landslides, extreme rainfall, and affiliated ecological imbalance. 

The Pandora’s box opened by the Green Lawyer of India, Mr M.C. Mehta, culminated in a robust environmental legislation framework which is also protected by the Constitution of India. Similarly, the multiple interventions by the Hon’ble Supreme Court of India in 2025 in the Aravalli, Himachal Pradesh, and Uttarakhand are not examples of environmental activism but are in fact judicial attempts to correct a cavernous governance failure arising from the absence of an integrated ESG, sustainability, and adaptation framework. 

These three instances are patterns united in risk and reveal a governance model which treats environmental risk as a checkbox and not a core economic variable. They offer a common lesson i.e. sustainability cannot be achieved by fragmented legislation and piecemeal mitigation and that we must enact ESG and sustainability legislation that hardwires risk management, transparency, and accountability without curtailing the right to development and business. 

We have learned this the hard way that no project exists in isolation. Numerous unplanned roads incorrectly placed hotels, blocked drains, and deforestation tend to destabilise an entire valley. Our present framework, i.e. project basis Environment Impact Assessment (EIA), scattered permits, and stand-alone judgements, fail to see the bigger picture that sans strategic assessment, clear zoning, and adaptation rules, fragile areas would always remain at risk while businesses shall face delays, uncertainty, and reputational damages. These are costs which a robust ESG law can prevent.

At the same time, the compliance capacity is inadequate. The Pollution Control Boards and the field departments lack staff, equipment, and sanctions. Additionally, the key data for oversight i.e. baselines, flood lines, slope maps, monitoring etc are either scattered or are hard to access, which in turn makes it easy to hide risks and offenders hard to hold to account. Further, penalties are just another cost to business and society entailing that degrade first and litigate later.

Furthermore, corporate accountability, too, has failed to keep pace which hurts competitiveness. Clear and uniform standards and mandatory ESG due diligence across businesses and supply chains would bring high impact actors into scrutiny, instead of shifting the burdens to regulators and affected communities.

A dedicated ESG statute would not replace the existing laws but advance their enforcement whilst making growth predictable by mandating organization wide analysis with board level responsibility, and real consequences for false claims. It would further mandate cumulative assessments for infrastructure and extractive corridors while establishing uniform no-go zones in disaster prone areas. It would require near geospatial disclosure of permits and compliance which would derisk capital, accelerate diligence, and reward the lawful operators.

Finance is central to the solution. While the capital should flow to safer and compliant projects, at the same time no business should be condemned. Hence, we need transition finance(to help high impact sectors improve) and sustainable finance (to scale the already green activity). Alongside the same, we need restoration bonds and absolute liability to price the risk upfront and advance the triple bottom line “Profit, People, and Planet”.

Abuses worsen when public officials collude with businesses thereby, facilitating land grabs as alleged in parts of Uttarakhand among others. An ESG Code would expose and deter this through public and geotagged disclosures of permits and land records, conflict of interest and beneficial ownership declarations, auditable e approvals, inspector rotation, whistle blower protections, an independent ombudsman with suspension powers, and debarment and personal sanctions.

We lack coherence and thus, we need a dedicated ESG statute to replace the fragmented controls. Responsibilities are split across ministries and states and approvals are sequenced rather than integrated which is why gaps appear exactly where risk is the highest. We have permits but limited “stop” signs, reports but not transparent data, and judicial precedents without any capacity to operationalise the same. An ESG law would knit these pieces together in a single system enforceable across all jurisdictions. It would align development with environmental, social, and governance risks, mitigation, and adaptation which would further give environment stability, businesses clarity, and society protection. If properly designed, this law could in fact become the greatest ease of doing business reform as well as environmental and social one.

The mountains and ridges are warning us. Each landslide, flooded street, and vanishing ridge epitomises governance failure. We can either react tragedy by tragedy or legislate the resilience and adaptation required. The choice is not between development and India’s green story but between organic growth and compounding liabilities and risks. India, therefore, must choose progress and order by enacting a contemporary ESG Law so that businesses can thrive, landscapes can persist, and communities can prosper.

(Views are personal; Dr. Shardul S. Shroff is the Founder and Executive Chairman of law firm Shardul Amarchand Mangaldas & Co, while Ramisha Jain is Senior Associate at ESG Advisory Services)