India’s future energy trajectory is critical to global climate stability. The risks posed by climate change to infrastructure, economies, public health, and the environment continue to escalate around the world. Yet, at the UNFCCC 26th Conference of Parties in Glasgow, India pushed for a change of the wording of the Glasgow Pact from “phase out” of coal as an energy source to “phase down.” Even though the nation marginally increased its climate commitments at COP26, its economic goals are not compatible with global temperature goals as established in the Paris Agreement, particularly as the country seems poised to privatize existing, nationally-owned fossil fuel assets and is investing significantly in natural gas infrastructure.

India has announced a national goal to transition its economy from coal to natural gas in an effort to become a $5 trillion economy by 2025. To accomplish this goal, India has amended a variety of laws and regulations in the last two years to i) support privatization of the energy sector in the name of efficiency and increased productivity, as well as to ii) increase the inflow of foreign direct investment into the sector to boost natural gas consumption, production, and infrastructure with minimum regulatory burdens. This will lead to a rapid transformation of India’s energy sector, including the development of significant natural gas assets, infrastructure, and companies, in keeping with the Government of India’s national policy.

India’s Companies Law of 2013 ascribes a duty to directors to disclose material risks to enable stakeholders to remain informed about the risks faced by companies, but crucially omits an inclusion of risks from extreme climatic events in its definition of “material.” The lack of climate-related risk disclosure requirements for companies in the energy sector undermines the reliability of information available to companies, investors, and community members at large. India’s corporate governance framework needs to evolve to include stricter and more robust climate-risk disclosure requirements because a director’s failure to factor climate-related risks can cause a significant decline in the value of the company as well as cause avoidable damage to consumers and community at large. Given the similarities in the legal systems and the law between India and the United Kingdom, this Note undertakes a comparison of the corporate governance structures and the Companies Acts of the two nations. Further, this Note looks at the status and future of climate related risk disclosure requirements for companies in the United Kingdom and the United States as possible models of nations transitioning from coal to natural gas economies for India to follow in instating its own stringent disclosure guidelines and requirements.

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