Introduction
Climate Disclosure in India is becoming an important legal and compliance issue for businesses as investors, regulators, customers, and other stakeholders demand greater transparency about climate-related risks. Companies are increasingly expected to provide reliable information about sustainability, emissions, environmental impact, and climate-related business risks.
In India, climate reporting is closely connected with ESG reporting, Business Responsibility and Sustainability Reporting (BRSR), corporate governance, and regulatory disclosures. Businesses therefore need to understand how climate information is collected, verified, reported, and communicated.
As regulatory expectations continue to develop, inaccurate or misleading climate information can create legal, regulatory, financial, and reputational risks. This makes Climate Disclosure in India an important consideration for companies preparing their compliance and governance frameworks.
As climate-related information becomes more important to investors and other stakeholders, businesses need to consider not only what they disclose, but also whether the information is accurate, consistent, supportable, and properly documented.
This creates emerging legal issues around climate-related business disclosures in India, including regulatory compliance, data accuracy, greenwashing, value-chain information, assurance or assessment, and potential liability for misleading statements.
Why Climate-Related Business Disclosures Matter
Climate-related information can influence how investors, lenders, customers, regulators, and other stakeholders evaluate a company.
A business may need to provide information about:
- Greenhouse gas emissions
- Energy consumption
- Water use
- Waste management
- Climate-related risks
- Environmental targets
- Sustainability initiatives
- Supply-chain practices
- Resource efficiency
- Environmental performance
Therefore, climate reporting is no longer simply a sustainability exercise. For businesses covered by applicable disclosure requirements, it can also become a governance and compliance responsibility.
1. Understanding Climate-Related Disclosures in India
Climate-related disclosures refer to information that helps stakeholders understand how climate change may affect a company’s operations, financial position, strategy, and sustainability performance.
These disclosures may cover both the company’s environmental impact and the risks that climate change creates for the business.
For example, a company may need to consider:
- Physical risks from extreme weather
- Transition risks from changing regulations
- Energy and emissions data
- Climate-related targets
- Resource consumption
- Supply-chain exposure
- Business continuity risks
The exact disclosure requirements depend on the company, applicable regulations, reporting framework, and sector.
2. BRSR and Climate-Related Reporting
SEBI’s BRSR framework is an important part of sustainability reporting for listed entities in India.
BRSR requires reporting against the nine principles of the National Guidelines on Responsible Business Conduct. The framework contains essential indicators and leadership indicators.
Climate-related information can therefore form part of a broader sustainability disclosure framework.
Companies should ensure that sustainability teams, finance teams, legal teams, and senior management understand the information being reported.
3. BRSR Core and Data Reliability
Climate Disclosure in India is increasingly connected with broader ESG and sustainability reporting requirements applicable to businesses.
BRSR Core introduced a focused set of key performance indicators for which additional assessment requirements apply to covered listed entities.
SEBI’s framework originally provided a phased approach beginning with the top 150 listed entities and extending to the top 1,000 listed entities by FY 2026–27.
This creates an important compliance issue: Can the company substantiate the data it reports?
Businesses should therefore maintain supporting records for:
- Emissions calculations
- Energy consumption
- Water consumption
- Waste data
- Environmental targets
- Sustainability metrics
- Source documents
- Internal approvals
4. Climate Risk and Corporate Decision-Making
Businesses should incorporate Climate Disclosure in India into their wider climate-risk and corporate governance processes.
Climate change can create both physical and financial risks for businesses.
For example, extreme weather can affect manufacturing facilities, logistics, employees, suppliers, and infrastructure. Changes in technology, regulation, consumer demand, and energy costs can also create transition risks.
Companies should therefore consider whether material climate-related risks need to be reflected in their risk-management and governance processes.
Climate-related information should not be treated as a separate sustainability exercise if it has a material impact on business strategy.
5. Climate Disclosures and Supply Chains
A company’s environmental impact may extend beyond its own operations.
Suppliers, logistics providers, manufacturers, and other value-chain partners can contribute significantly to a company’s environmental footprint.
Therefore, businesses may need to collect information from suppliers and other value-chain partners.
This can create practical challenges such as:
- Incomplete supplier data
- Different measurement methods
- Lack of supporting documentation
- Inconsistent reporting
- Difficulty verifying emissions
- Contractual gaps
SEBI’s BRSR framework has also addressed ESG disclosures relating to the value chain, with recommendations concerning applicability and assessment.
6. Greenwashing and Misleading Climate Claims
One of the emerging legal risks is greenwashing.
Greenwashing can occur when a business presents its products, services, or operations as more environmentally responsible than the available evidence supports.
Examples may include claims such as:
- “Carbon neutral”
- “Net zero”
- “Eco-friendly”
- “Sustainable”
- “Climate positive”
- “100% green”
Businesses should ensure that environmental claims are supported by reliable evidence.
Before publishing a climate-related claim, companies should ask:
- Is the claim accurate?
- Can the company prove it?
- Is the methodology documented?
- Are limitations clearly explained?
- Has the claim been reviewed internally?
This can reduce the risk of misleading stakeholders.
7. Climate Data and Internal Controls
Climate-related reporting depends on data collected from multiple departments.
For example, emissions information may involve facilities, finance, procurement, operations, logistics, and suppliers.
As a result, companies should establish clear internal controls.
A useful process can include:
- Identifying data owners
- Defining measurement methods
- Maintaining supporting records
- Establishing approval procedures
- Conducting internal reviews
- Tracking changes in methodology
- Maintaining an audit trail
Strong documentation can help demonstrate how reported information was calculated.
8. Climate Disclosures and Directors’ Responsibilities
Climate-related reporting can also create governance considerations for boards and senior management.
Directors and senior executives should understand the information being presented to investors and other stakeholders.
This is particularly important where disclosures involve:
- Material business risks
- Environmental targets
- Financial commitments
- Sustainability investments
- Climate strategies
- Public statements
- Regulatory filings
The board should have sufficient information to oversee the company’s sustainability and climate-related reporting processes.
9. Climate Disclosures and Financial Institutions
Climate-related information is also relevant to financial institutions.
Banks and other lenders may need to understand how climate risks affect borrowers, assets, sectors, and portfolios.
In January 2026, Reuters reported that the RBI had deferred plans to mandate proposed climate-risk disclosures for banks, citing implementation concerns and the need for greater alignment with other regulatory frameworks.
This does not mean climate risk is irrelevant to financial institutions. Instead, it highlights the evolving regulatory environment around climate-risk reporting in India’s financial sector.
10. Climate Disclosures and Investor Expectations
Investors increasingly use environmental and sustainability information when assessing businesses.
Therefore, inconsistent or unsupported climate disclosures can create reputational and governance concerns.
Companies should aim for consistency between:
- Regulatory filings
- Annual reports
- Sustainability reports
- Investor presentations
- Website claims
- Press releases
- Marketing material
A climate-related statement made in one communication should not contradict information provided elsewhere.
11. Legal Risks of Inaccurate Climate Disclosures
Accurate Climate Disclosure in India requires businesses to maintain reliable data, supporting documentation, and appropriate internal controls.
Incorrect or misleading disclosures can create several types of risk.
These may include:
- Regulatory scrutiny
- Investor concerns
- Reputational damage
- Contractual disputes
- Greenwashing allegations
- Governance concerns
- Financial reporting issues
The legal consequences will depend on the nature of the disclosure, the applicable regulation, the company involved, and the circumstances.
Therefore, businesses should review material climate-related disclosures before publication.
12. Climate Reporting and Third-Party Assurance or Assessment
Companies may rely on external professionals to review or assess sustainability information.
SEBI’s BRSR framework has evolved from the use of “assurance” terminology toward “assessment” for certain BRSR-related requirements. SEBI’s expert committee recommendations explained that this change was intended to better reflect the regulatory purpose and reduce unintended consequences.
Companies should therefore understand exactly what review or assessment is required and retain appropriate documentation.
13. Climate-Related Disclosures in Commercial Contracts
Climate-related requirements can also enter commercial contracts.
For example, customers or investors may require suppliers to provide:
- Emissions data
- Sustainability information
- Environmental certifications
- Climate targets
- Supply-chain information
Businesses should carefully review these clauses before accepting contractual commitments.
The contract should clarify:
- Data responsibilities
- Reporting standards
- Verification requirements
- Liability
- Audit rights
- Corrective measures
- Confidentiality
14. How Businesses Can Prepare
Companies can begin by creating a structured climate-disclosure process.
Step 1: Identify applicable requirements
Determine which laws, regulations, reporting frameworks, and sector requirements apply to the company.
Step 2: Map the data
Identify where climate and environmental information is generated.
Step 3: Assign responsibility
Create clear ownership for collecting, reviewing, and approving data.
Step 4: Document methodologies
Record how emissions, energy, water, waste, and other metrics are calculated.
Step 5: Review public claims
Check sustainability statements made on websites, reports, advertisements, and investor communications.
Step 6: Establish controls
Create processes for verification, approval, record keeping, and periodic review.
Common Legal and Compliance Risks
Businesses should be particularly careful about:
- Unsupported climate claims
- Inconsistent sustainability data
- Incorrect emissions calculations
- Weak supplier information
- Poor documentation
- Inadequate internal controls
- Inconsistent public statements
- Failure to monitor regulatory changes
- Overreliance on third-party data
- Unclear contractual obligations
Early review can help reduce these risks.
Best Practices for Climate-Related Business Disclosures in India
Businesses can strengthen their approach by following a practical compliance process.
- Identify applicable SEBI and sector requirements.
- Establish clear ownership of sustainability data.
- Maintain supporting documentation.
- Use consistent calculation methods.
- Review value-chain information carefully.
- Verify important climate-related claims.
- Coordinate legal, finance, sustainability, and compliance teams.
- Maintain an audit trail.
- Review public statements for consistency.
- Monitor regulatory developments regularly.
Most importantly, companies should ensure that their climate-related disclosures are accurate, consistent, transparent, and supportable.
Climate-Related Business Disclosures in India: 2026 Considerations
In 2026, climate reporting continues to develop alongside broader ESG, corporate governance, and financial-sector regulation.
SEBI’s current LODR framework was amended as recently as July 2026, so businesses should monitor regulatory updates rather than relying only on older sustainability reporting practices.
At the same time, developments involving BRSR Core, value-chain reporting, climate-risk management, and financial-sector disclosures show that climate-related information is becoming increasingly connected with broader corporate compliance.
Companies should therefore treat climate disclosures as an ongoing governance process rather than a once-a-year reporting exercise.
How Derecho Consulting Can Help
Climate-related reporting can involve corporate law, securities regulation, governance, contracts, risk management, and regulatory compliance.
Derecho Consulting can assist businesses with:
- ESG and sustainability compliance reviews
- BRSR-related legal considerations
- Climate disclosure reviews
- Regulatory compliance assessments
- Sustainability claim reviews
- Greenwashing risk assessments
- Commercial contract reviews
- Corporate governance advisory
- Risk and compliance frameworks
- Regulatory monitoring
A structured legal review can help businesses identify potential risks before climate-related information is published.
Conclusion
A structured approach to Climate Disclosure in India can help businesses improve transparency while reducing regulatory and reputational risks.
Climate-related disclosures are becoming an increasingly important part of corporate reporting in India. For applicable businesses, the focus is not only on producing sustainability information but also on ensuring that the information is reliable, consistent, documented, and legally supportable.
BRSR, BRSR Core, value-chain disclosures, climate-risk reporting, sustainability claims, and evolving financial-sector expectations can create new compliance considerations.
Businesses should therefore establish clear internal controls and review processes for climate-related information.
A proactive approach can help companies improve reporting quality, reduce greenwashing risks, and strengthen corporate governance.