India: Auditing the companies for Green compliance

September 26, 2018


The modern world is full of competition with all countries battling the race of economic development. While the passion for winning the title of progressive economy increases often over the other essential responsibilities including duty towards the surrounding environment are ignored. The excessive use of non-renewable energy sources and their improper disposal has led to the depletion of the environment at a very high scale. This has become a growing concern of the Government who is aiming to strike a balance between the economic growth and its side effects to mother nature.

Environment Impact Assessment

With a view to conserve and safeguard the environment against the potential threats posed by new projects taken up by different entities, the Government has mandated the requirement of Environmental Impact Assessment (hereinafter referred to as “EIA”). The EIA acts as an instrument whereby the Government identifies, predicts, evaluates and mitigates the biophysical, social, and other relevant effects of development proposals prior to major decisions being taken and commitments made. Only after the clearance from the Government authorities based on the recommendations of an Expert Appraisal Committee, can an assignment be undertaken by the business entity.

Green Check

In order to ensure that the projects such as power plants, mines and oil and gas exploration while expanding their scope of business do not fail to comply with the requisite environment standards as prescribed under the law, the Government is working to subject such ventures to the scanner of the independent auditors dedicated in this regard.[1]

The Government has proposed that the approved auditors will conduct randomised, third-party compliance monitoring of environment clearance conditions. The institutions empanelled by the Government shall be ensuring adherence to the environmental guidelines in respect of specific industries taking up tasks which may impact the environment.

The compliance monitoring is planned to be done inter-alia against the baseline information available in the Environmental Impact Assessment report, Environmental Management Plan appraised by the Environmental Audit Committee, terms and conditions of the environmental clearance as well as other provisions as may be specified by the Ministry from time to time.

The Government is in the process of reinforcing the provisions of environmental impact assessment with the objective to minimize adverse impacts on the surrounding environment attributable to the new undertakings of the corporates by ensuring a regulatory check on compliance of the same.


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