Sebi WTM Amarjeet Singh raises concerns of greenwashing by India Inc

Says some manufacturing, automotive, and energy cos making misleading disclosures

Securities and Exchange Board of India’s (Sebi’s) whole-time member (WTM) Amarjeet Singh on Friday voiced concern over greenwashing and misleading disclosures related to environment, social, and governance (ESG) metrics.

 

Singh highlighted instances where companies claimed to have no negative environmental impact, despite facing legal action for environmental violations.

 

“The claim made in the Business Responsibility and Sustainability Reporting (BRSR) report, on the manufacturing sector, says no significant impact on the environment, whereas the company was facing legal action for environmental law violations. In the automobile sector, the claim made was that recycled input material was used, but there was no data on recycled, reused plastic used despite major input impact,” he said at the FICCI ESG Summit.

 

 

Singh also cited an instance of non-disclosure by an oil and gas company, while emphasising the need for transparency and “true to label” disclosures.

 

BRSR – ESG-related filings to be made by India Inc — was introduced by Sebi to enhance sustainability disclosures and align them with global best practices.

 

Last month, the regulator relaxed norms on the ESG front by giving additional time for compliance to stricter measures.

 

ESG disclosures for the value chain will now be applicable from 2025-26 (FY26) instead of FY25 and the assessment or assurance norms will be applicable from FY27 instead of FY26. Further, Sebi also made the disclosures for the value chain voluntary instead of ‘comply or explain’.

 

“Whatever you are claiming must be correct. And if it is not, there is a need for assurance and ethical standards,” said Singh.

 

He cited examples from offshore regulators in the US and Australia which imposed heavy penalties on companies found violating the norms.

 

The Sebi WTM said the regulators need to enhance their oversight capabilities and bring legislative changes as the sustainable finance market expands. He further called for using artificial intelligence (AI) for tracking emissions.

 

“In AI, we are seeing a lot of acceleration happening. Technology, particularly AI, can help tackle climate change by tracking emissions more accurately. The rapid growth of AI is also pushing innovation around electricity supplies, which could create more momentum for renewable energy,” he said.

 

On slowing investments in the ESG theme, the Sebi official said that the market’s emphasis on short-term gains must give way to a more nuanced understanding of value.

 

He also called for more focus on recognising the inter-linkages of financial risks the economy faces from climate change.