INFLUENCE OF CSR COMPLIANCE, ESG REPORTING STANDARDS REGULATORY ENFORCEMENT, AND ENFORCEMENT GAPS ONCORPORATE GOVERNANCE IN INDIA

AUTHOR – PRIYADHARSHINE.R, STUDENT AT SCHOOL OF LAW, VELS INSTITUTE OF SCIENCE, TECHNOLOGY AND ADVANCED STUDIES PALLAVARAM, CHENNAI – 600 117

BEST CITATION – PRIYADHARSHINE.R, INFLUENCE OF CSR COMPLIANCE, ESG REPORTING STANDARDS REGULATORY ENFORCEMENT, AND ENFORCEMENT GAPS ONCORPORATE GOVERNANCE IN INDIA, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 60-72, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

The distinction of being the first nation to enact mandated corporate social responsibility expenditure by enacting a law on the same under section 135 of the Companies Act, 2013 is unique to India. The regulatory framework was extended over the following decade with SEBI Business Responsibility and Sustainability Reporting (BRSR) framework (SEBI, 2021), BRSR Core (SEBI, 2023), RBI Draft Framework of Climate risk Disclosure (RBI, 2024) or the CCPA Greenwashing Guidelines (CCPA, 2024). All these tools together have put India in the list of most prominent jurisdictions in the world with systematic corporate sustainability governance.

However, there is still a recalcitrant enforcement hole. The sum of total CSR penalties in three-financial years (20222025) was almost INR 20 crore as opposed to the total annual obligation of over INR 26,000 crore. A study conducted by the ASCI (2023) revealed that 79 per cent of environmental claims that were made by Indian organisations were deceptive or overstated. The IL&FS; and Hindenburg-Adani are the most damaging governance failures, which happened in organizations that are on record adhering to the standards of disclosure rules.

Critically, this paper evaluates the question of whether the mandatory CSR and ESG reporting regime in India is actually enhancing the nature of corporate governance as it is a sign of a regime change or otherwise and suggests eight possible specific legal reforms based on preexisting statutory authority. The study follows a doctrinal and analytical research design as it uses statutes, SEBI circulars, MCA adjudication orders, Supreme Court judgments, NGT orders and corporate sustainability filings. The three research hypotheses are accepted: CSR compliance has a positive impact on the quality of governance; significant enforcement has a positive impact on the results of governance, the overall architecture of CSR, ESG reporting, enforcement and the gaps in the enforcing mechanism determine the quality of governance.