Corporate Governance and ESG Archives

Climate Change and ESG Considerations in India’s AI-Driven Future

Insights | August 14, 2024 | Practice Area: Clean Energy, Corporate Governance and ESG, Regulatory, Technology; Media and Telecommunications

As AI continues to transform industries in crucial ways, the training of large AI models remains highly energy- and resource-intensive, resulting in significant emissions and waste.
For countries and companies which have ambitious net-zero goals, balancing AI ambitions with existing decarbonization strategies is important. As India accelerates its journey towards becoming a global economic powerhouse, it may want to address the environmental implications of increased AI deployment, including by regulating AI with the aim of making increased adoption sustainable. Where companies are concerned, investing in ‘green AI’ will not only benefit the environment but may also enhance their ESG profiles. Going forward, the integration of climate considerations into AI policy is likely to become an important element of responsible AI development.

Safeguarding Biodiversity or Mitigating the Impact of Climate Change: A Novel Dilemma

Insights | July 29, 2024 | Practice Area: Clean Energy, Corporate Governance and ESG, Projects; Infrastructure and Energy

In a landmark judgement delivered in March 2024, in MK Ranjitsingh & Others vs. Union of India & Others, the Supreme Court of India sought to balance two goals which it considered “equally crucial” – the conservation of a “critically endangered species”, the Great Indian Bustard, and the conservation of the environment.
The Supreme Court has proposed a way ahead to address the dilemma presented to it. Balanced and prompt follow up action will be critical to approach both biodiversity and climate goals in a meaningful way.

Can Controlling Shareholders Influence the Votes of Public Shareholders? An Analysis of ‘Coerced Voting’ in an Indian Context

Insights | July 8, 2024 | Practice Area: Corporate Governance and ESG, General Corporate, Mergers and Acquisitions

“Coerced voting” as understood in the US context, refers to situations where controlling shareholders compel other public shareholders to vote in a predetermined manner in relation to a specific matter. This may potentially involve instances of bribing, offering incentives, or entry into arrangements to make them vote in a certain way. Such voting mechanisms inherently involve a level of influence exerted by the controlling shareholder.
This note considers “coerced voting” in an Indian context and reflects on the jurisprudence of Delaware courts in this regard.

The Indo-Pacific Economic Framework for Prosperity: Opportunities for Indian Companies

Insights | June 26, 2024 | Practice Area: Anti-corruption; Fraud and Investigations, Clean Energy, Corporate Governance and ESG, Projects; Infrastructure and Energy, Regulatory, Tax

Along with 13 other countries (including the US, Japan, Singapore, South Korea and Australia), India has joined the Indo-Pacific Economic Framework for Prosperity (“IPEF”). Representing 40% of global GDP and almost 30% of international trade in goods and services, the IPEF is expected to promote economic activity, investment, and sustainable growth in the Indo-Pacific region. It also aims to address emerging economic challenges – such as those related to trade, supply chains, clean energy (including green infrastructure), taxation and anti-corruption.
While agreements in respect of a clean economy and a fair economy, respectively, were reached in June 2024 at the IPEF Ministerial meeting held in Singapore, the IPEF agreement on supply chains, signed in November 2023, came into force earlier this year (February 2024).
The IPEF presents a unique opportunity for Indian companies to enhance competitiveness and expand their markets. By actively engaging with the framework, businesses in India can position themselves as key players in the dynamic Indo-Pacific landscape. Further, the IPEF presents an opportunity for India to strengthen economic cooperation with the US – which relationship, in turn, is likely to prove valuable for both Indian and American companies.

Regulatory Spotlight on Identification of Promoters

Insights | April 3, 2024 | Practice Area: Capital Markets, Corporate Governance and ESG, Regulatory

Identification of “promoters” ahead of an initial public offering in India is a critical step given the resultant disclosure requirements, obligations and other implications. In the recent past, the Indian securities regulators have increased their scrutiny over the persons and entities being identified as promoters in offer documents.
This note provides an overview of certain recent developments in connection with the identification of promoters.

REITs and InvITs: Evolution of the Regulatory Landscape in India

Insights | March 15, 2024 | Practice Area: Capital Markets, Corporate Governance and ESG, InvITs; REITs and Business Trusts, Real Estate, Regulatory

Business trusts play a significant role in Asian and global capital markets. India introduced real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) in 2014. As the regulatory regime approaches the completion of a decade, this note reflects on the evolution of the regulatory landscape for REITs and InvITs in India.

Innovative Constructions: Assessing the Investment Viability of New Construction Technologies

Insights | November 20, 2023 | Practice Area: Banking and Finance, Clean Energy, Corporate Governance and ESG, General Corporate, Projects; Infrastructure and Energy, Regulatory

Every year, Indians require 10 million new homes. At the same time, global markets are increasingly focused on sustainability, climate change and ESG-related goals. The confluence of such factors has created various opportunities to employ climate-responsive construction techniques, including through the use of eco-friendly and sustainable material. Relatedly, the interplay of energy-efficient solutions, green-certified buildings, targeted investments and financing, key legislative changes, government incentives and a coordinated regulatory framework, as well as increased digitalization, may change this ecosystem in fundamental ways.

Modifications to Schemes of Arrangement

Insights | October 5, 2023 | Practice Area: Corporate Governance and ESG, General Corporate, Mergers and Acquisitions, Regulatory, Technology; Media and Telecommunications

Once a scheme of arrangement has been approved by its shareholders or the relevant National Company Law Tribunal, what, if any, modifications are permissible to the scheme of arrangement without seeking fresh shareholder approval?

This note considers the legal framework for modifications to approved schemes of arrangement. It also examines the proposed merger of Zee Entertainment with Sony Pictures India where this question potentially arises for consideration.

Carbon Credits: An Overview

Insights | September 27, 2023 | Practice Area: Banking and Finance, Clean Energy, Corporate Governance and ESG, Projects; Infrastructure and Energy, Regulatory

The idea of carbon credits, including the establishment of a market for such credits, has generated significant global attention in recent years. While this idea is not new, it has become especially important today to understand what such credits entail and how these can benefit businesses – given the worldwide momentum towards ESG-related goals.
Carbon market transactions involve the purchase of emission rights from entities which have the technical and/or economic ability to reduce emissions. India’s Carbon Credit Trading Scheme, 2023 defines a ‘carbon credit’ to mean a value assigned to a reduction, removal or avoidance of emitted greenhouse gases amounting to one metric ton of CO2 or its equivalent. Accordingly, certificates may be issued by the government under the newly amended Energy Conservation Act, 2001.
In regulated carbon markets, each registered/obligated entity may be allotted a certain number of credits. Those that produce fewer emissions than the number of credits issued by the government (or an authorized agency) may enjoy a surplus. Conversely, companies with older and/or less efficient operations may generate more emissions than their credit allocation. The latter category may then look to buy credits to balance their emissions, including on account of a regulatory mandate.
This exchange between buyers and sellers will establish the market price. If it is cheaper for an emitter to trade in, rather than control, emissions, they can buy credits. Those that find it feasible to reduce emissions at a cost less than the market price can sell. Emissions trading can thus transform the right to emit a pollutant into a tradable good and create economic incentives for reduction.

SEBI Tightens Governance Norms for Listed Entities

Insights | July 11, 2023 | Practice Area: Capital Markets, Corporate Governance and ESG, Regulatory

On June 14, 2023, the SEBI tightened governance requirements for listed entities by amending the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. One of the key changes brought about by the SEBI is to the disclosure regime under Regulation 30 of the LODR Regulations, which will become effective on July 14, 2023. This note discusses these changes and their implications.