India: Environment

Environmental, Social and Governance (“ESG”) considerations have increasingly become an important component of corporate decision-making, investor assessments and brand positioning in India. As businesses seek to demonstrate their environmental credentials, terms such as “green”, “eco-friendly”, “sustainable”, “carbon neutral” and “environmentally friendly” are increasingly used in advertising, product packaging, corporate communications and sustainability disclosures.

The article summarises recent Supreme Court judgment that provides important clarity on the law governing post facto environmental clearances by reaffirming the primacy of prior environmental clearance and delineating the narrow circumstances in which statutory regularisation may be permissible. It also draws a clear distinction between delegated legislation and executive action, limiting the scope for future administrative regularisation.

In Vanashakti v Union of India, 2026 INSC 761 a three-judge bench of the Supreme Court pursuant to review proceedings settled the long-contested issue of ex post facto Environmental Clearance (EC) granted under the Environment Impact Assessment Notification, 2006 (EIA Notification, 2006). The Court held that the prior EC regime is mandatory in nature and upheld the validity of the 2017 Notification issued by the Ministry of Environment, Forest and Climate Change (MoEFCC) as a time bound amnesty scheme, and struck down the 2021 Office Memorandum (2021 OM) as an impermissible administrative action with prospective effect. The Court passed a common judgment and order in a group of petitions.