Artificial Intelligence and Corporate Liability in The Era of ESG Compliance: Challenges and Frameworks

Abstract

Sustainable practices are essential for a nation to achieve social justice, protect the environment, and grow economically. Examining comparative perspectives on foreign norms and understanding how ESG duties translate into corporate accountability is the main goal of this research. The Companies Act 2013, Sections 135 and 166, SEBI mandates, BRSR-mandated disclosures, and other applicable statutes are consulted in this study of ESG compliance and corporate accountability in India. Efforts to incorporate ESG responsibilities into company mandates should include more stringent liability measures, judicial changes, and ESG reporting requirements if India is serious about closing its recurrent enforcement gaps. Corporate India is under pressure from society, authorities, and investors to adopt ESG principles in their operations. Disparities in company compliance and weak enforcement are among the many obstacles in the ever-changing legal framework governing ESG duties. Machine Analytics, natural language processing, automated due diligence, and predictive risk modelling are crucial tools for compliance, regulation, and maintaining corporate responsibility. The current study also explores the use of AI in ESG compliance monitoring, where it can enhance enforcement, improve risk identification, and promote more active corporate governance. The recommendations examine what India needs: stronger enforcement, greater access to appropriate legal remedies (such as class actions), and adherence to key international standards. The report suggests ways forward, including making ESG reporting more obligatory and imposing harsher fines so that SDG 16 can be achieved further, that is, peace, justice and stronger institutions.