ESG – A sustainable model for a better future
By Kumar Panda
SEBI has recently constituted a committee to recommend enhancements to Business Responsibility and Sustainability Report (‘BRSR’), rating and investments in Environment, Social and Governance (‘ESG’) practices. The article in this issue of Corporate Amicus notes that though India has no comprehensive legislation concerning ESG disclosures for Indian corporates, National Guidelines on Responsible Business Conduct, 2019 lays down the principles to operate a business in an ethical, transparent, and accountable manner with emphasis on ESG practices. Elaborating on implementation of ESG practices, the article discusses the importance of written Sustainable Development Goals commitments, signing up for the United Nations Global Compact program, ESG compliance in the supply chain, stakeholder awareness, social dialogue and freedom of association, procedures to recycle wastes and handle residual wastes, transition to clean energy, Know-your-customer (KYC) systems, avoiding cash transactions, implementation of information security management systems and having policies to ensure that employees and other stakeholders freely report violations. Observing that a corporate sustainable obligation must go beyond legal compliance, the author states that while BRSR is applicable currently only to top 1000 companies, all business houses must be encouraged to voluntarily disclose their ESG metrics...
Notifications and Circulars
- Relaxation in holding of AGM and EGM through VC/OAVM extended till 31 December 2022
- SEBI mandates system and network audits of Market Infrastructure Institutions (MIIs)
- Timelines reduced for the listing of units of InvITs and REITs
- SEBI – Requirement of sending hard copy of annual report containing salient features of all the documents prescribed in Section 136 of the Companies Act, 2013 relaxed
- RBI – Limits for investment in debt and sale of Credit Default Swaps by FPIs
Ratio decidendi
- Arbitral Tribunal does not have authority to direct an interim deposit of the amount in dispute if there is serious dispute with respect to payment liability – Supreme Court
- Territorial jurisdiction of Adjudicating Authority under Insolvency and Bankruptcy Code, 2016 cannot be restricted by an agreement between the parties – NCLAT
News Nuggets
- ArbitRation – ‘Group of Companies’ doctrine for inclusion of non-signatories – Supreme Court refers issue to Larger Bench
- Insolvency – ‘CIRP costs’ to include salaries of only employees who worked during CIRP
- Related party transactions – Bar of voting under Section 188 of Companies Act, 2013 operates only at the time of entering into a contract
- ESI Act – Conveyance allowance not includible in ‘wages’
- RERA registRation required even if occupancy certificate received before 1 May 2017
- Minimum Wages Act – Notification fixing minimum rates of wages, issued after a conscious decision, cannot be corrected later under Section 10
- Deferment charges on liquidated damages not payable if later damages itself not imposed
- Insolvency – Moratorium provisions apply only to corporate debtors, natural persons remain liable under Section 138 of NI Act
- Arbitral Tribunal can grant post-award interest on the interest component already included in the awarded sum
- Contract Act does not conceive sale of pawn by pawnee to self
