Corporate Affairs Bulletin: Environment Audit Rules, 2025

Background

The Ministry of Environment, Forest and Climate Change (the "MoEFCC") has issued a notification (dated August 29, 2025) on the Environment Audit Rules, 2025 (the "Rules"). These Rules establish a framework for the certification, registration, and functioning of environment auditors in India for ascertaining the environmental compliance of projects, activities or processes prescribed under various environmental laws. The Rules support India's commitments on climate action, ESG frameworks, and Green Credit Rules, 2023, and supplement, but do not replace, government inspections.

Legal Basis and Applicability

The Rules are issued under the provisions of the Environment (Protection) Act, 1986, read with the Environment (Protection) Rules, 1986.

They apply to audits of projects governed by the following environment laws:

Environment (Protection) Act, 1986;
Air (Prevention and Control of Pollution) Act, 1981;
Water (Prevention and Control of Pollution) Act, 1974;
Forest (Conservation) Act, 1980;
Wildlife (Protection) Act, 1972;
Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980
Rules, regulations, notifications and directions issued thereunder.

Audits may also be undertaken in relation to activities under the Ecomark Rules, 2024, E-Waste (Management) Rules, 2022, Plastic Waste Management Rules, 2016 and Battery Waste Management Rules, 2022, and any other rules issued by the MoEFCC, as well as the Environment Impact Assessment (EIA) regime, the Coastal Regulation Zone (CRZ) notifications, frameworks and related environmental approvals (the "green approvals").

Key Definitions at a Glance

Certified Environment Auditor (CEA): An individual certified by the Environment Audit Designated Agency (EADA) to undertake environment audits.
Registered Environment Auditor (REA): A certified auditor, firm or body corporate (with two or more CEAs) registered by the EADA to conduct audits and perform prescribed functions.
Environment Audit: A systematic audit, verification, examination, inspection, or analysis of any project, activity or process having a bearing on the environment.

The Environment Audit Designated Agency (EADA)

The EADA shall be notified by the Central Government, and its functions include, but are not limited to, the following:

Setting minimum eligibility criteria for REAs.
Conduct examinations.
Certify and register REAs.
Monitor performance of REAs.
Maintain a public online register.
Issue directions or undertake disciplinary action.
Facilitate capacity building through training, workshops and courses.

A Steering Committee chaired by an Additional Secretary, MoEFCC, will oversee implementation, review provisions, and recommend amendments.

Roles and Responsibilities of REAs

The roles and responsibilities of REAs include, but are not limited to:

Undertaking environment audits of projects governed by applicable environmental laws.
Conducting sampling and analysis of emissions, effluents and wastes; evaluating the effectiveness of pollution control and waste management systems.
Reporting violations or non-compliance and computing environmental compensation where required by the competent authority.
Preparing and submitting environment audit reports as per regulations and guidelines and verifying self-compliance reports.
Performing assignments from CPCB/SPCBs/PCCs, including under EPR frameworks, and verification assignments under the Green Credit Rules, 2023 when duly authorised.
Maintain independence and avoid conflict of interest by not having any personal, financial, or professional relationships with the auditee (including family ties, employment, etc.). They cannot provide non-audit services that compromise independence, or accept gifts or inducements. Before accepting any assignment, REAs must submit a formal undertaking confirming the absence of conflict of interest.

Certification and Registration

The Rules introduce a two-track certification mechanism for CEAs:

Recognition of Prior Learning (RPL): Certification based on prior experience and expertise; available for a limited period to be specified by the Government.
National Certification Examination (NCE): A structured examination to assess eligibility for certification.

Once certified, auditors can seek registration as REAs. Registration is valid for five years and renewable, subject to criteria to be specified in Government guidelines.

Matters to be Specified by Central Government Guidelines

The Central Government will specify or determine the following through guidelines:

The minimum eligibility criteria for Certified Environment Auditors, including qualifications and experience requirements.
The detailed procedure for certification, including the process for RPL and the NCE (syllabus, format, and passing standards).
The procedure and conditions for registration of CEAs as REAs, including renewal requirements.
The fee structure and payment process for certification, registration, and audit assignments.
Standard formats and methodologies for environment audit reports, including sampling protocols and evidence requirements.
The format for the conflict-of-interest undertaking that auditors must submit.
The mechanism for random assignment of auditors to projects, including the digital platform and safeguards to ensure impartiality.
A detailed code of conduct covering integrity, ethics, confidentiality, and professional behavior.
The framework for monitoring and oversight of auditors and the EADA, including disciplinary procedures and appeal mechanisms.
The capacity-building requirements, such as training programs, workshops, and continuous professional development for auditors.
The verification protocols for activities under the Green Credit Rules, 2023.
Any additional procedural clarifications necessary for the effective implementation of these Rules.