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Environmental and Social Due Diligence in the Dairy Industry – An Overview

Environmental and social due diligence in the dairy industry is the process of evaluating the environmental and social impacts of the business's actions and practices. It further allows dairy enterprises to assess novel investments, veiled risks & liabilities, thereby encouraging them to adopt appropriate mitigation strategies to avoid future losses.

With countless variables distressing the industry's sustainability and economic viability, environmental and social due diligence in the dairy industry is becoming progressively significant. Connect with Corpbiz experts to get supervision throughout the entire process for conducting environmental and social due diligence in the diary industry. Top 3% of market leaders in the dairy industry trust us. Now, it's your turn.

Environmental and Social Due Diligence in the Dairy Industry
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What are the Benefits of Conducting ESDD in the Dairy Industry?

The benefits of conducting ESDD in the dairy industry are as follows:

Benefits of Conducting ESDD in the Dairy Industry
Risk Identification & Mitigation

Risk Identification & Mitigation

Conducting ESDD in the dairy industry helps entities identify and mitigate environmental and social risks that affect business operations in India.

Better Financial Performance

Better Financial Performance

Conducting ESDD in the dairy industry implements standards and measures to manage the business's financial performance better.

Supply Chain Traceability

Supply Chain Traceability

ESDD in the dairy industry strengthens supply chain traceability for companies that ethically and sustainably source raw materials and reduce dependence on unreliable suppliers.

Long-term Price Management

Long-term Price Management

Conducting ESDD in the dairy industry ensures long-term price management and helps prevent future expenses associated with legal fines, environmental cleanup, or emergency repairs.

Market Access & Brand Enhancement

Market Access & Brand Enhancement

ESDD in the dairy industry enables entities to enter new markets that prioritize sustainability and to build a strong brand image among consumers who prefer cruelty-free products.

Ensure Fair Labour Practice

Ensure Fair Labour Practice

ESDD in the dairy industry ensures strict compliance with the working conditions, welfare of employees, fair wages, and safety standards, particularly in labor-intensive farm operations.

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Key Environmental Aspects Crucial for Due Diligence in the Dairy Industry

The entities must consider the following environmental aspects crucial for conducting due diligence in the dairy industry:

  • Wastewater and manure management.
  • Carbon footprint and energy consumption.
  • Reduce ammonia and methane emissions.
  • Focus on sustainable land usage.
  • Minimize the footprint of cattle farming.

Key Social Aspects Crucial for Due Diligence in the Dairy Industry

The key social aspects to be considered for conducting due diligence in the dairy industry are as follows:

  • Ensure ethical treatment and animal welfare.
  • Comply with fair labour practices & safe working conditions.
  • Ensure positive engagement of local communities.
  • Monitor and manage the dairy supply chain.

Who Needs to Conduct ESDD in the Dairy Industry?

The key stakeholders required to conduct ESDD in the dairy industry to manage environmental risks, ensure food safety, and comply with dairy industry regulations are as follows:

  • Commercial dairy farms & producers.
  • Milk processing plants and manufacturers.
  • Investors and financial institutions.
  • Supply chain suppliers and partners.
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Mandatory ESDD Compliance Checklist in the Dairy Industry

Mandatory ESDD Compliance Checklist in the Dairy Industry

Have a look at some of the mandatory ESDD compliance checklists required for entities engaged in the dairy industry:

  • FSSAI License: It is mandatory for entities to obtain an FSSAI license to produce, pasteurise, process, store, distribute, forfeit, or sell milk or milk products in compliance with the provisions of the Food Products Standards and Food Additive Regulations, 2011.
  • Setup a Cooperative Model: The dairy industry in India is known for its unique three-tier cooperative model, which establishes primary dairy cooperative societies at the village level, district milk unions, and state federations to enhance transparency.
  • Align with ESG Reporting Framework: The ESDD compliance checklist requires the firms to manage ESG reporting and disclosures under the SEBI's Business Responsibility and Sustainability Reporting framework.
  • Consent to Operate: The ESDD compliance checklist requires the entities to mandatorily obtain a consent to operate from the State Pollution Control Board under the Air and Water Acts.
  • Effluent Treatment Plant Setup: It is mandatory to ensure the setup of an effluent treatment plant to manage the high-strength wastewater, which is an output of milk, fat, cleaning chemicals, etc.
  • FSMS Plan Implementation: The entities involved in the dairy industry must ensure the implementation of the Food Safety Management System (FSMS) plan in accordance with Schedule 4 of the FSSAI regulations.
  • Personal Health & Hygiene: The entities in the dairy industry must ensure that annual medical examinations and inoculations are conducted for food handlers and that proper uniforms, gloves, and masks are maintained.
  • Groundwater Extraction Permission: Entities in the dairy industry must obtain valid groundwater extraction permission if the water used for business operations is sourced from underground.
  • Comply with Animal Welfare Mandate: Entities engaged in the dairy industry must comply with the Animal Welfare mandate under the National Livestock Policy, 2013.

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Types of ESDD Conducted Across Dairy Segments in India

The different types of ESDD conducted across dairy segments in India are as follows:

Category of Dairy Segments Key Dairy Products Type of ESDD
Milk Powders Whole milk powder, skimmed milk powder, dairy whiteners, flavoured milk, A2 milk, etc. Environmental Due Diligence
Liquid Milk Condensed milk, standardised or toned milk, pasteurised milk, etc. Environmental and Social Due Diligence
Traditional Dairy Products Ghee, curd, paneer, lassi, etc. Social Due Diligence
Value-Added Dairy Products Ice cream, yoghurt, cheese, butter, etc. Environmental Due Diligence

Legal Architecture Mandatory for ESDD in India's Dairy Industry

The legal architecture mandatory for conducting ESDD in India's dairy industry is as follows:

  • Food Safety and Standards Authority of India Act, 2006: The Food Safety and Standards Authority of India (FSSAI) Act, 2006, is an essential framework that establishes uniform standards for the licensing, quality testing, labelling, and packaging of milk and dairy products.
  • Essential Commodities Act, 1995: The Essential Commodities Act, 1995, is an old regulation that provides emergency powers to regulate the prices and supply of milk and other dairy products.
  • Cooperative Societies Regulation: The Cooperative Societies Act, 1912, and the Multi-State Cooperative Societies Act, 2002, which define the membership rights, profit-sharing norms, and governance structure, are considered the backbone of the cooperative dairy network in India.
  • Environmental Protection Laws: The Environmental (Protection) Act, 1986, and the Water (Prevention and Control of Pollution) Act, 1974, are laws that provide for compliance with effluent discharge, waste management, and pollution control measures by the SPCB.
  • Animal Welfare and Prevention of Cruelty to Animals Act, 1960: The Animal Welfare and Prevention of Cruelty to Animals Act, 1960, is a statutory regulation that establishes minimum standards for animal husbandry and humane dairy practices in India.
  • Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016: The Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, are an important set of regulations that govern the disposal of hazardous waste generated in day-to-day dairy operations.

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Get Corpbiz's Services for Environmental and Social Due Diligence in the Dairy Industry

  • GAP Analysis & Risk Assessment: Get support for conducting a GAP analysis and assessing environmental and social risk factors associated with services and processing within the dairy industry.
  • Implement Waste Management Strategies: We implement robust waste management strategies to support sustainable day-to-day dairy operations in India.
  • Conduct Due Diligence Surveys: Our experts help conduct due diligence surveys, including interviews, data room management, and public registration preparation.
  • ESDD Reporting & Communication: Get expert assistance to ensure the delivery of clear, comprehensive, and actionable environmental and social due diligence reports of the dairy industry.
  • Supply Chain Management: Connect to ensure thorough management of social and environmental impacts across the supply chain, including fair labour practices and community impact.
  • Customized Due Diligence Solutions: Get customised due diligence solutions for your dairy business, varying based on the project's specific task level.

Why Trust Corpbiz for Environmental and Social Due Diligence in the Dairy Industry?

Why Trust Corpbiz for Environmental and Social Due Diligence in the Dairy Industry?

Handled 1500+ Dairy Due Diligence Projects

Handled 1500+ Dairy Due Diligence Projects

At Corpbiz, we have handled 1500+ dairy due diligence projects, covering all environmental and social impact within the dairy industry.

10+ Years of Compliance Expertise

10+ Years of Compliance Expertise

With 10+ years of compliance expertise, we provide specialized guidance for environmental and social due diligence in the dairy industry.

AI-Powered Service Delivery

AI-Powered Service Delivery

We employ high-tech AI platforms to deliver efficient, AI-powered services to dairy industry entities that comply with the provisions for environmental and social due diligence in the dairy industry.

500+ Environmental Compliance Experts

500+ Environmental Compliance Experts

Connect with our team of 500+ environmental compliance experts and consultants providing specialized guidance for ESDD and ESG compliance within the dairy industry.

24/7 Client Support Services

24/7 Client Support Services

Get 24/7 dedicated client support services to facilitate prompt answering of queries, along with automated documentation and real-time updates.

Cost-Effective Pricing Structure

Cost-Effective Pricing Structure

Our cost-effective and transparent pricing structure is considered more economical than maintaining an in-house team to ensure ESDD compliance in the dairy industry.

Ready for ESDD in the Dairy Industry?

Let our seasoned experts handle ESDD in the dairy industry for you.

  • 100% Accuracy
  • 24/7 Dedicated Support
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FAQs on Environmental and Social Due Diligence in the Dairy Industry

Environmental and social due diligence in the dairy industry refers to the systematic evaluation of environmental and social risks associated with day-to-day operations, investments, and the supply chain.

The key challenges faced while conducting environmental and social due diligence in the dairy industry are higher GHG emissions, manure & waste handling, land degradation, biodiversity loss, unfair labour practices, occupational hazards, low productivity & quality control, data collection issues, etc.

The three-tier cooperative model of India's dairy sector encompasses primary dairy cooperative societies at the village level, district milk unions, and a state federation to enhance transparency, introduce independent directors, and enable digitized auditing, all of which require legal structuring and compliance guidance in India.

White Revolution 2.0 is a government policy reform aimed at creating 75,000 new dairy cooperatives and strengthening 46,000 existing dairy cooperatives by 2029. This 2024 institutional reform agenda further promoted digitization, women's participation, and sustainable growth options within the dairy industry.

The entities enjoy reduced overhead, fewer penalties, expert knowledge, technological integration, sustainability branding, enhanced reputation, improved efficiency, and other merits of outsourcing Environmental and social due diligence in the dairy industry.

The widely observed impacts of dairy farming on the environment include deforestation, soil degradation, greenhouse gas emissions, and water pollution. Moreover, a 2013 report published in the International Dairy Journal reports that 1.23 kilograms of carbon dioxide are produced per kilogram of milk processed.

Currently, the dairy industry in India is considered the world's largest milk producer. It accounts for nearly 25% of global output. In addition to this, the production reached 247.87 million metric tonnes and per capita availability jumped to over 471 grams per day.

About the Author


NE
Neha Dawra

Legal Researcher

Written by Neha Dawra. Last updated on Jun 15 2026, 05:59 PM

Neha Dawra has 4+ years of experience in legal research and intellectual property advisory. Her expertise lies in analyzing IP laws, drafting structured legal content, and simplifying complex registration procedures into clear, simple insights.

 

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