India has positioned itself as a proactive leader in the fight against climate change, demonstrating both the desire and ability to take significant action. Business leaders in India recognize the value of redefining their corporate purpose to address not just wealth creation, but also broader concerns relevant to their key stakeholders. To support this shift, the SEBI (Securities and Exchange Board of India) introduced the BRSR (Business Responsibility and Sustainability Reporting) framework in 2021. The BRSR aims to enhance transparency and accountability among Indian corporates by requiring disclosures across the ESG (Environmental, Social, and Governance) pillars of sustainability. The top 1000 listed companies in India (based on market capitalization) are mandated to file BRSR reports alongside their annual reports, with future expansion likely to include more companies.
The BRSR report consists of three sections:
- General disclosures: Basic company information, including size, location, products, employees, and CSR activities.
- Management disclosures: Policies and processes related to leadership, governance, and stakeholder engagement, with links to relevant documents on the company’s website.
- Principle-wise disclosures: Companies report on their performance against nine principles of the NGRBCs (National Guidelines on Responsible Business Conduct), showing their commitment to responsible business through actions and results.
The questions in the report are divided into two categories (mandatory and voluntary):
- Essential indicators (mandatory)
- Leadership indicators (voluntary)
In late 2024, SEBI introduced amendments to the BRSR framework, focusing on value chain disclosures, assurance requirements, and the addition of a new leadership indicator. These key changes are summarized below:
Flexibility in Assurance or Assessment for ESG Reporting
Moving forward, the term “assurance” will be replaced with “assurance or assessment,” giving companies the flexibility to choose between having their data assured or assessed by a third party. Third-party assurance enhances brand reputation and credibility, demonstrating a company’s commitment to transparency and responsibility. It also boosts customer confidence, as consumers increasingly favour businesses with verified ESG credentials. Additionally, third-party assessment can drive efficiency by identifying areas for continuous improvement in sustainability efforts, benefiting both the organization and its broader community. However, the guidance does not clearly specify the approach that third-party assurance providers should follow during the assessment process.
ESG Value Chain Related Disclosures
- Voluntary ESG Value Chain Disclosures – Strengthening ESG Foundations: ESG value chain disclosures have shifted from a mandatory comply-and-explain framework to a voluntary one. Given the critical role of value chains—particularly in specific industries—voluntary reporting not only enhances a company’s ESG foundation but also offers a competitive advantage while aligning with stakeholder expectations.
- Revised Scope for Value Chain Disclosures: SEBI had previously mandated listed companies to report key performance indicators (KPIs) related to their value chain, covering the top upstream and downstream partners accounting for 75% of total purchases and sales (by value) starting from FY 2024-25. However, the process proved to be complex and time-consuming. In response, SEBI revised the requirement, now requiring companies to report on suppliers and customers that represent 2% or more of their total purchases and sales, with the option to disclose data for the top 75% if they choose to do so.
- Deferral of ESG Value Chain Disclosures and Third-Party Assurance: The requirement for ESG value chain disclosures and third-party assurance or assessment has been deferred by one year. These disclosures will now be mandatory starting from FY 2026-27, instead of FY 2025-26, giving companies more time to comply.
Introduction of Green Credits in Leadership Indicators under BRSR Principle 6
The inclusion of green credits in the Leadership Indicators under BRSR Principle 6 encourages companies to report on the green credits generated or procured by the company and its top 10 value chain partners. These credits, earned through activities such as tree plantation, will now be incorporated into ESG reporting. This addition strengthens companies’ commitment to sustainability and highlights their role in environmental responsibility. In addition, SEBI released the “Industry Standards on Reporting of BRSR Core” on December 20, 2024, providing guidance on preparing BRSR reports and addressing various reporting nuances. The guidance includes examples for reporting under the BRSR Core indicators, particularly for organizations that have not yet streamlined their data-gathering processes. The Industry Standards Forum (ISF) may also release further guidance on the assessment process for assurance providers to ensure consistency and reliability in verifying ESG disclosures. The ISF standards are divided into two parts: Part A, which covers general requirements, including intensity-based calculations and clarification of the spend-based approach for estimating environmental footprints; and Part B, which offers a detailed explanation of the requirements across all nine attributes. Below, we summarize the key clarifications provided in the latest Industry Standards note:
| # | Particulars | Industry Standard Guidance |
| Part A – General Requirements | ||
| 1 | Intensity based calculations | Entities should report intensity ratios for revenue, adjusted for “Purchasing Power Parity (PPP),” and “Output-based intensity” for Scope 1 and 2 GHG emissions, water consumption, energy consumption, and waste generation. The International Monetary Fund publishes PPP conversion rates for all currencies. Entities should use the latest available rate for India and disclose the rate used in a note within the BRSR report. For Output-based intensity, which varies by sector, manufacturing entities should use total product output, while service entities should use Full-Time Equivalent (FTE) to report intensity figures. Entities may voluntarily provide intensity ratios based on other metrics, such as units of product, number of full-time employees, etc. |
| 2 | Spend based approach to calculate environmental indicators | An entity may use a spend-based approach to estimate emissions, energy consumption, and/or water consumption when primary data is not available. |
| Part B – Attribute wise requirements | ||
| 1a | Attribute 1: GHG footprint – Scope 1 | New guidance has been provided for ‘recognized sources for emission factors.’ The reporting entity should disclose the source of the emission factor used. |
| 1b | Attribute 1: GHG footprint – Scope 2 | Industry Standards require entities to use the latest applicable CEI-published grid emission factor, where data is available. If data is not available, entities may use the spend-based approach for calculations, as outlined in the Industry Standards Note. |
| 2 | Attribute 2: Water footprint | In the absence of direct water measurement, entities should estimate consumption using the Central Ground Water Authority (CGWA) guidelines. If facility-level data is available, water usage should be estimated accordingly. |
| 3 | Attribute 3: Energy footprint | Entities should identify and report ‘Power delivered through the local power connection,’ categorizing it under renewable and non-renewable sources. |
| 4 | Attribute 4: Embracing circularity – details related to waste management by the entity | The BRSR Guidance Note remains the primary reference for this attribute. |
| 5 | Attribute 5: Enhancing Employee Wellbeing and Safety | KPIs should include: i. Five initiatives: health insurance, accident insurance, maternity benefits, paternity benefits, and daycare facilities. ii. Health and safety measures, including access to mental health support. Cost reporting: i. Must be based on actual expenditures from audited financials. ii. Costs incurred on insurance, maternity/paternity leave, health check-ups, fitness programs, and medical services should be detailed. The definitions of ‘revenue’ and ‘permanent disability’ have been clarified. |
| 6 | Attribute 6: Gender Diversity in business | Clarifications have been provided on ‘total wages’ and the reporting of POSH (Protection of Women from Sexual Harassment) complaints. |
| 7 | Attribute 7: Enabling Inclusive Development | The definitions of MSMEs, small producers, input materials, and total purchases have been clarified.This KPI applies solely to Indian entities within the reporting boundary. |
| 8 | Attribute 8: Fairness in Engaging with Customers and Suppliers | Cybersecurity incidents must be reported in accordance with CERT-In’s directive (April 28, 2022).Entities must disclose the percentage of incidents involving customer data relative to the total cyber incidents reported to CERT-In.For foreign jurisdictions, follow local regulatory requirements; if unavailable, CERT-In guidance should be followed. |
| 9 | Attribute 9: Open-ness of business | Clarifications have been provided on ‘other liabilities,’ ‘cost of goods/services procured,’ ‘trade payables,’ and ‘trading houses.’ |
We believe the guidance from the Industry Standards Forum will help ensure consistency in disclosures and reporting by entities. Overall, the amendments are designed to refine the assurance process and create a more supportive framework for companies on their sustainability journey. These updates simplify BRSR compliance, providing organizations with the opportunity to plan and integrate ESG disclosures across their value chain. Additionally, companies can use this time to develop policies and procedures for implementing assurance systems, ensuring a smoother transition to enhanced disclosure practices.
This article was written by T M Ashok Yashwant, Client Engagement Lead – ESG Consulting at NeoImpact. Ashok has over four years of expertise in ESG, specializing in sustainable finance, stakeholder engagement, sustainability strategy, and ESG reporting. His areas of interest include corporate net-zero strategy, low-carbon investment initiatives, green finance, and climate risk mitigation.
