Algorithmic Criminal Liability in Greenwashing: Comparing India, United States, and European Union

Current laws are unprepared for AI-generated greenwashing: Existing fraud statutes across India, the US, and the EU rely on proving human intent, creating a critical gap when deceptive environmental claims are generated by algorithms rather than people—making it difficult to hold anyone legally accountable.

Companies may need stricter accountability standards: The research identifies "strict liability models" as viable solutions, suggesting that corporations could be held responsible for algorithmic deception even without proving intentional wrongdoing, shifting the burden toward companies to ensure their AI systems don't mislead about environmental practices.

The EU is leading on regulatory solutions: The EU's Corporate Sustainability Due Diligence Directive (CSDDD) offers a potential model for other jurisdictions, indicating that Europe is ahead in creating governance frameworks that require companies to actively monitor and audit their AI systems for greenwashing risks.

"Algorithmic due diligence" should become standard practice: The paper recommends mandatory due diligence requirements specifically for AI systems within Environmental, Social, and Governance (ESG) frameworks, meaning companies would need to regularly test and verify that their algorithms aren't making false environmental claims.

Legal systems need fundamental rethinking: The study reveals that laws built around human decision-making are "antiquated" for the AI era, suggesting that policymakers must develop entirely new legal frameworks rather than simply patching existing ones to address algorithmic deception in corporate sustainability reporting.