Cracking Down on ESG Greenwashing Key Trends to Watch in 2026

SYNOPSIS

India's greenwashing crackdown is no longer coming, it is already here. SEBI, CCPA and ASCI all moved in 2024 and the top 1000 listed companies are now under mandatory sustainability reporting with supply chain disclosures closing in fast. Most businesses are not ready and the window to get ready is shrinking faster than they think.

Every third product in an Indian supermarket has a leaf on it. Almost none of them can prove why.

 Walk into any supermarket in India today. Every third product has a leaf on it. "Eco friendly." "Sustainable." "Planet-conscious." Sounds great. But how many of those claims actually mean anything? Not many. And regulators are finally starting to agree.

India has been trying to copy how the EU and UK succeeded on greenwashing and has quietly started building its own greenwashing target. This began with SEBI and has now expanded across multiple regulators simultaneously.

SEBI currently mandates the top 1000 listed companies by market cap to file detailed Business Responsibility and Sustainability Reports every year. From FY 2024-25 the top 250 companies are required to disclose Scope 3 emissions and get their ESG data independently assured. By FY 2026-27 that assurance requirement extends to the top 500 companies.

In June 2025 SEBI went further and introduced a full framework for ESG labelled debt securities covering social bonds, sustainability bonds and sustainability linked bonds. Third party verification became mandatory before and after issuance. Only mutual funds with at least 80% of assets in ESG themed securities are even allowed to use the ESG label now.

In October 2024 the Central Consumer Protection Authority released its Guidelines for Prevention and Regulation of Greenwashing. The Advertising Standards Council of India published its own guidelines in February 2024 specifically targeting vague absolute claims like "ecofriendly" or "planet friendly" saying these require robust verifiable evidence and cannot be hidden behind disclaimers or QR codes.

So multiple regulators are now active on this. SEBI for listed companies and financial products. CCPA for consumer advertising. ASCI for ad content. RBI through its Green Deposits Framework for banks and NBFCs. The gap is widening.

Here is the real issue for Indian businesses though. MSMEs which form the backbone of Indian supply chains largely do not track greenhouse gas emissions or water footprint at all. The top 250 companies are now required to disclose ESG data covering at least 75% of their upstream and downstream value chain. That means suppliers who have never filed an ESG report in their life are suddenly on the radar.

This is not just a large-company problem anymore. It is a supply chain problem and it is arriving fast. India is not where the EU is yet , but the scaffolding is going up. Companies that treat sustainability reporting as a checkbox exercise in 2026 are going to look very unprepared by 2027. The leaf on the label needs to mean something. Regulators are making sure of it.

Moksha Mehta