CIVIL AND CRIMINAL LIABILITY OF DIRECTORS FOR ESG NON-COMPLIANCE – A COMPREHENSIVE LEGAL ANALYSIS

 AUTHOR – MOHD TOUSEEF AIZAZ* & PROF.(DR.) ARUN KUMAR SINGH**

* LL.M., ICFAI UNIVERSITY, DEHRADUN.

** PROFESSOR, DEPARTMENT OF LAW, ICFAI UNIVERSITY, DEHRADUN

BEST CITATION – MOHD TOUSEEF AIZAZ & PROF.(DR.) ARUN KUMAR SINGH, CIVIL AND CRIMINAL LIABILITY OF DIRECTORS FOR ESG NON-COMPLIANCE – A COMPREHENSIVE LEGAL ANALYSIS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 850-862, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

Environmental, Social, and Governance (ESG) compliance has transitioned from a voluntary expression of corporate goodwill into a structured legal obligation carrying tangible civil and criminal consequences for directors. As regulatory frameworks across major jurisdictions have evolved to embed ESG expectations into the architecture of corporate law, directors who ignore, misstate, or inadequately supervise their company’s ESG performance expose themselves to a growing spectrum of legal risk. This paper examines the civil liabilities including breach of fiduciary duty, negligence-based claims, and shareholder derivative actions and criminal liabilities including fraud, environmental crimes, and willful non-disclosure that directors face for ESG non-compliance. Drawing on case law and legislation from India, the United States, the United Kingdom, and the European Union, the paper develops a comparative picture of how these standards are operationalised across different legal traditions. The analysis finds that the trajectory is unmistakably toward greater director accountability, and concludes with recommendations for boards seeking to manage ESG legal risk proactively.

Keywords: ESG, Director Liability, Companies Act 2013, Section 166