BRSR Reporting in India: Key Changes to ESG Disclosures Introduced by SEBI

In December 2024, the Securities and Exchange Board of India (SEBI) approved key decisions related to the BRSR Core framework, ESG disclosures for the value chain, and assurance requirements.

The Securities and Exchange Board of India (SEBI) mandates the top 1,000 listed entities in India to prepare Business Responsibility and Sustainability Reporting (BRSR) under the SEBI (LODR) Regulations, 2015. BRSR includes disclosures aligned with the National Guidelines on Responsible Business Conduct.

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On July 12, 2023, SEBI introduced a framework for BRSR Core, ESG disclosures for the value chain, and assurance requirements. In May 2024, an Expert Committee recommended:

• Terminology change: Replace “assurance” with “assessment” to reduce financial and compliance burdens.
• Value chain reporting: Cover upstream and downstream partners accounting for 2 percent or more of purchases/sales. ESG reporting for FY 2024-25 should allow voluntary past-year disclosures, shifting from a ‘comply or explain’ to a voluntary approach.
• Green credit program: Introduce a leadership indicator under BRSR Principle 6 to track green credit generation by companies and their value chains.

New developments in BRSR framework: ESG disclosure and assurance requirements

SEBI, in its board meeting on December 18, 2024, approved key decisions related to the BRSR Core framework, ESG disclosures for the value chain, and assurance requirements, based on recommendations from the Expert Committee. See Press Release No.36/2024 from SEBI here.

Further, through a circular issued on December 20, 2024, SEBI introduced the Industry Standards on Reporting of BRSR Core (‘Industry Standards’) – see official circular here. Developed by the Industry Standards Forum (ISF)—comprising ASSOCHAM, FICCI, and CII—these standards aim to streamline and standardize BRSR Core disclosures under the SEBI LODR Regulations.

The Industry Standards are designed to help listed entities comply with Regulation 34(2)(f) of the LODR Regulations, ensuring consistency in BRSR Core reporting. These requirements will be applicable from FY 2024-25 onwards.

Key changes

1. ESG disclosures for value chain
   • Deferred by one year—applicable from FY 2025-26, with assessment or assurance required from FY 2026-27.
   • Voluntary approach instead of the existing comply-or-explain requirement.
   • Covers upstream and downstream partners that individually account for 2 percent or more of purchases/sales (by value). Entities may limit disclosures to cover 75 percent of total purchases and sales.
   • Previous year data reporting is voluntary for the first year of value chain ESG disclosures.
2. Green credit disclosure
   • A new leadership indicator under Principle 6 of BRSR introduced to track Green Credits generated or procured by the listed entity and its top-10 value chain partners.
3. Assessment or assurance
   • “Assurance” replaced with “Assessment or Assurance” for BRSR Core disclosures.
   • Applicable for listed entities from FY 2024-25 and for value chain partners from FY 2026-27 onwards.

Guidance from the Industry Standards note

The Industry Standards supplement SEBI’s BRSR Guidance Note (Annexure II) and provide normative references to it.

Part A: General Requirements

1. Intensity-based calculations
   • Entities must report intensity ratios for revenue adjusted for Purchasing Power Parity (PPP) and output-based intensity for GHG emissions (Scope 1 & 2), water consumption, energy intensity, and waste intensity.
   • PPP conversion rates: Entities should use the latest PPP rate for India as published by the IMF and disclose the rate used in BRSR reporting. The same rate should be used for both the current and previous financial years.
   • Output-based intensity calculation:
     • Manufacturing entities should use Total Production as the output measure.
     • Service entities should use Full-Time Equivalent (FTE) as the input measure.
   • Entities may voluntarily provide additional intensity ratios based on metrics such as unit of product, production volume, or employee count.
2. Spend-based approach to estimating environmental footprint
   • If primary data on emissions, energy, or water consumption is unavailable, entities may use a spend-based approach to estimate these values based on annual spending data.
   • The Industry Standards provide detailed guidance on implementing this methodology.

Part B: Attribute-wise Requirements

Attribute 1: Greenhouse Gas Footprint

• Scope 1: Entities must disclose the source of emission factors used.
• Scope 2:
  • Use the latest CEA-published grid emission factor for electricity consumption.
  • If measurable data is unavailable, entities can use the spend-based method (only as an initial measure, not after measurable data is available).
  • Entities must specify the source of spend-based factors and justify their use.

Attribute 2: Water Footprint

• If direct measurement is unavailable, entities should estimate consumption using Central Ground Water Authority (CGWA) guidelines.
• If data is available at a facility level, sub-unit water usage should be estimated accordingly.
• For overseas locations, consumption rates relevant to that country or region should be used.

Attribute 3: Energy Footprint

• Entities must report power delivered through local connections, categorized under renewable and non-renewable sources.

Attribute 4: Embracing circularity – details related to waste management by the entity

• BRSR Guidance Note remains the primary reference for this attribute.

Attribute 5: Enhancing Employee Wellbeing and Safety

• KPIs must cover:
  • Health insurance, accident insurance, maternity & paternity benefits, and daycare facilities.
  • Health & safety measures, including mental health access.
• Cost Reporting:
  • Must be based on actual expenditures from audited financials.
  • Costs incurred on insurance, maternity/paternity leave, health check-ups, fitness programs, and medical services should be detailed.
• Definitions of ‘revenue’ and ‘permanent disabilities’ are clarified.

Attribute 6: Gender Diversity in Business

• Clarifications provided on ‘total wages’ and reporting of POSH (Protection of Women from Sexual Harassment) complaints.

Attribute 7: Enabling Inclusive Development

• Definitions of MSMEs, small producers, input materials, and total purchases clarified.
• This KPI applies only to Indian entities within the reporting boundary.

Attribute 8: Fairness in Engaging with Customers and Suppliers

• Cybersecurity incidents must be reported as per CERT-In’s directive (April 28, 2022).
• Entities must disclose percent of incidents involving customer data vs. total cyber incidents reported to CERT-In.
• For foreign jurisdictions, follow local regulatory requirements; if absent, CERT-In guidance should be used.

Attribute 9: Open-ness of business

• Clarifications provided on ‘other liabilities,’ ‘cost of goods/services procured,’ ‘trade payables,’ and ‘trading houses.’

Background reading:

• ESG Reporting Mandates in India: Guidelines for Businesses
• SEBI’s Consultation Paper on BRSR Aims to Ease ESG Compliance
• Environmental Compliance for Companies in India: Key Legislation and ESG Guidelines

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