ABSTRACT
The term ESG i.e. Environmental, social and governance is actually similar in context to the connotation CSR i.e. corporate social responsibility however ESG is more concrete; it possesses the information and measurements required to guide corporate and investor decision-making.“ESG, at its core, is a means by which companies can be evaluated with respect to a broad range of socially desirable ends. ESG describes a set of factors used to measure the non-financial impacts of particular investments and companies.”[1]
The main purpose of ESG is to push the companies to strike a balance between sustainability and development. Organisations have to deal with both product management as well as environment safety and consumer satisfaction , a direct nexus has to be drawn between these areas so to enable the organisations to grow. The E in ESG stands for environmental aspects covering the effect of company’s activities on environment , the S stands for social relationship of company with outsiders i.e the consumers and G stand for the governance i.e. the rules followed by the organisation.
Thus, the present article attempts to understand how ESG factors influence corporate decision making from legal perspective, focusing on the G aspect of ESG making the companies accountable for their activities and understanding its impact on the corporate governance. This article focuses on understanding ESG in corporate governance by examining the international and national standards in India with help of relevant judgements.
[1] Ariel Deckelbaum, Brad Karp, David Curran, Jeh Charles Johnson, Loretta Lynch, Mark Bergman, Paul Weiss, Introduction to ESG, HARVARD LAW SCHOOL FORUM ON CORPORATE GOVERANCE(Aug. 1, 2020) , https://corpgov.law.harvard.edu/2020/08/01/introduction-to-esg/.