The Securities and Exchange Board of India (SEBI) via circular dated May 10, 2021 introduced the Business Responsibility and Sustainability Reporting (BRSR) for listed companies to report on Environment, Social and Governance (ESG) factors from Financial Year 2022-23 which was subsequently incorporated in the SEBI Master Circular dated July 11, 2023. BRSR is linked with Companies Act, 2013, CSR, and LODR Regulations.
Reporting on the company’s performance on sustainability-related factors has become as vital as reporting on financial and operational performance. One of the core objective is to promote the adoption of sustainable practices by companies and to integrate ESG aspects into their operational processes.
Let’s understand, what is ESG?
ESG stands for Environmental (E), Social (S) and Governance (G).
It is a framework used to evaluate how responsibly and sustainably a company operates—beyond its financial performance.
- Environmental factor: Focuses on company’s impact on environment.
It includes reporting on climate change, carbon emissions, energy efficiency, renewable energy, waste generated & management, water consumption, biodiversity, pollution control etc.
- Social factor: Reporting on how a company manages relationships with people and society.
Employee welfare, health & safety, Labour practices & human rights, Equal Opportunities, Supply chain responsibility, Community development & CSR, Diversity, equity & inclusion (DEI), Customer data privacy & product safety, etc.
- Governance factor: Examines how a company is directed, controlled and complied.
Business ethics, Board Structure and independence, transparency, Anti-corruption, shareholder’s rights, Risk management & internal controls, Compliance with laws and regulations etc.
India’s journey towards ESG & introduction of BRSR
Roots of ESG in India commenced in 2009 when the Ministry of Corporate Affairs (MCA) issued the voluntary guidelines on Corporate Social Responsibility. Further, in 2011, MCA issued the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’. In 2012, SEBI mandated the top 100 listed entities by market capitalisation to submit Business Responsibility Reports (BRR) as part of their annual report. In 2015, The requirement for filing BRR was extended to the top 500 listed entities by SEBI, also India adopted Sustainable Development Goals Agenda 2030. In 2019, MCA issued the National Guidelines on responsible Business conduct. Also, SEBI extended applicability of BRR to top 1000 listed entities. In 2020, A committee was constituted by SEBI to finalise the reporting formats which recommended that the BRR be called as BRSR.
In 2021, ESG reporting in India has moved from Business Responsibility Report (BRR) to Business Responsibility and Sustainability Report (BRSR) framework by SEBI. In 2022, SEBI constituted ESG Advisory Committee (EAC) which has given its recommendations in the areas of ESG disclosures, ESG ratings and ESG investing. Based on the above recommendations SEBI came with a consultation paper on the above as well as BRSR core.
In 2023, SEBI introduced the BRSR Core for assurance by listed entities, framework for assurance, revised format of BRSR, and ESG disclosures by value chain. In 2024, SEBI introduced Industry Standards applicable on Reporting of BRSR Core from FY2024-25 by listed entities. The Industry Standards Forum (“ISF”) comprising of representatives from three industry associations, viz. ASSOCHAM, CII and FICCI, under the aegis of the Stock Exchanges, to formulate industry standards, in consultation with SEBI.
In 2025, SEBI introduced an additional leadership indicator in in Principle 6 of BRSR format seeking disclosures on Green Credits with details on “How many Green Credits have been generated or procured by the listed entity & by the top ten value chain partners. Also, relaxation given for applicability of ESG Disclosures for Value Chain and introduced Assessment or Assurance.
Applicability of BRSR
The Securities and Exchange Board of India (SEBI), under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the LODR Regulations’) mandates the top 1,000 listed entities in India based on market capitalization to prepare the Business Responsibility and Sustainability Reporting (BRSR) on the environmental, social and governance disclosures in Annual report the financial year 2022-23 as per Regulation 34(2)(f). This report forms part of the company’s annual report, also to be submitted to the stock exchanges where company is listed.
SEBI has given the format for BRSR along with detailed guidelines for BRSR reporting.
As per Regulation 3 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 every recognized stock exchange shall prepare the list of entities at the end of the calendar year i.e., 31st December, on the basis of their average market capitalisation from 1st July to 31st December of that calendar year.
The listed entity, which is required to comply with BRSR reporting for the first time or after a period of cessation, shall check the list of entities issued by recognized stock exchange on 31st December and put in place systems, processes for compliance with clause (f) of sub-regulation (2) of regulation 34 within a period of three months from December 31 (i.e. on or before April 1) or from the beginning of the immediate next financial year, whichever is later.
Further, listed entities to disclose the Business Responsibility and Sustainability Report and/or assessment or assurance as per the Business Responsibility and Sustainability Report Core in the Annual Report prepared for the financial year in which systems and processes were required to be put in place.
As per Regulation 3 (2A), the provisions of Regulation 3 (2) shall continue to apply to listed entity unless its ranking changes in the list and such change results in the listed entity remaining outside the applicable threshold for a period of three consecutive years.
The provisions shall cease to apply at the end of the financial year following the 31st December of the third consecutive year. For listed entities that follow January to December as its financial year, the provisions shall cease to apply at the end of three months from 31st December of the third consecutive year (i.e. on 31st March) as per Regulation 3 (2B).
Format of BRSR organised into three sections:
- Section A- General Disclosures
This section provides a brief description of the company, market served, details on operation, finance, product / service, employees, CSR activities, assurance provider etc.
- Section B- Management and Process Disclosures
This section focuses on the details of the company’s operations & covers the structures, policies and management processes relating to National Guidelines on Responsible Business Conduct (NGRBC) principles concerning governance, leadership & stakeholders’ engagement. In case the business entity chooses not to adopt or report on any of the principles the same should be stated along with the reasons.
- Principle-wise Performance Disclosures
In this section, businesses are required to report on how well businesses are performing. Companies report on their performance against 9 principles of National Guidelines on Responsible Business Conduct (NGRBC), showing their commitments to responsible business through action and results.
The questions in the report are divided into two categories- Essential & Leadership.
Essential indicators are mandatory to disclose & Leadership indicators can be voluntarily disclosed by the company.
9 principles of National Guidelines on Responsible Business Conduct
Principle 1: Businesses should conduct and govern themselves with integrity and in a manner that is ethical, transparent and accountable.
Principle 2: Businesses should provide goods and service in a manner that is sustainable and safe.
Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains.
Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders.
Principle 5: Businesses should respect and promote human rights.
Principle 6: Businesses should respect and make efforts to protect and restore the environment.
Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
Principle 8: Businesses should promote inclusive growth and equitable development.
Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner.
What is BRSR Core?
The BRSR Core is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs) / metrics under 9 ESG attributes. SEBI introduced the BRSR Core for assurance by listed entities in circular dated July 12, 2023. Green-house gas (GHG) footprint, Water Footprint, Energy Footprint, Embracing circularity – details related to waste management by the entity, Enhancing Employee Wellbeing and Safety, Enabling Gender Diversity in Business, Enabling Inclusive Development, Fairness in Engaging with Customers and Suppliers and Open-ness of business are the 9 ESG attributes for the purpose of reasonable assurance or assessment of the BRSR Core.SEBI has also provided the framework for Data & Assurance approach.
Assurance or Assessment
Listed entities shall mandatorily undertake assessment or assurance of the BRSR Core as per applicability for respected financial year as per market cap.
| Financial Year | Applicability of BRSR Core to top listed entities (by market capitalization) |
| 2023-24 | Top 150 listed entities |
| 2024-25 | Top 250 listed entities |
| 2025-26 | Top 500 listed entities |
| 2026-27 | Top 1000 listed entities |
Which assurance or assessment standard should be followed by an assurance provider for the BRSR Core?
The Master Circular does not mandate or recommend the use of any specific assurance standard.
The assurance provider may appropriately use a globally accepted assurance standard on sustainability / non-financial reporting such as the International Standard on Assurance Engagements (ISAE) 3000, International Standard on Sustainability Assurance (ISSA) 5000 or assurance standards issued by The Institute of Chartered Accountants of India (ICAI), such as Standard on Sustainability Assurance Engagements (SSAE) 3000 or Standard on Assurance Engagements (SAE) 3410 “Assurance Engagements on Greenhouse Gas Statements”. Also, provide a disclosure for the assurance standard that is used.
For assessment of BRSR Core, the third-party assessment shall be undertaken as per the standards developed by the Industry Standards Forum (ISF) in consultation with SEBI as per circular dated March 28, 2025. (FAQ 8 of Section – V Business Responsibility and Sustainability Report (BRSR) Core of FAQs for LODR Regulations updated as on April 23, 2025).
ESG Disclosures for value chain
Disclosures for value chain shall be made by the listed company as per BRSR Core, as part of its Annual Report as per SEBI Circular dated July 12, 2023.
As per SEBI circular dated March 28, 2025value chain shall encompass the top upstream and downstream partners of a listed entity, individually comprising 2% or more of the listed entity’s purchases and sales (by value) respectively. However, the listed entity may limit disclosure of value chain to cover 75% of its purchases and sales (by value) respectively.
Relaxation in Applicability-
SEBI has postponed the mandatory requirement for value chain ESG disclosures to allow companies and their partners with additional time to prepare, build systems and processes for reporting.
Now, ESG disclosures for the value chain shall be applicable to the top 250 listed entities (by market capitalization), on a voluntary basis from FY 2025-26.
For the first year of reporting ESG disclosures for value chain, reporting of previous year numbers shall be voluntary. If a listed entity provides ESG disclosures for value chain, then it shall disclose the percentage of total sales and purchases covered by the value chain partners.
The assessment or assurance of the ESG disclosures for value chain shall be applicable on a voluntary basis from FY 2026-27.
Benefits of BRSR Reporting
- Stronger & brand positioning
Increases the brand value of a company by positioning it strongly in terms of perception of customers and key stakeholders. Enhanced brand value further helps a company raise financing from investors.
- Increased value creation
Company that embeds sustainability into its core operations builds a business that lasts longer, outperforms its competitors, and has a higher enterprise value vis-a-vis its peers who are resistant to change.
- Competitive advantage
Sustainable and responsible business-focused organisations can achieve competitive advantage by attracting the best talent, enhancing the company’s image and meeting stakeholder expectations.
- Enhancеd transparеncy and accountability
Investors use ESG to assess long-term risk and sustainability. Investors can make informed investment decisions based on financial and non-financial parameters reported by the company. It enables larger global investments and seamless access to global funds with competitive interest rates based on ESG ranking.
Reference:
SEBI Circular SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021
SEBI Master circular SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023
SEBI Circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated July 12, 2023
SEBI Circular SEBI/HO/CFD/CFD-PoD-1/P/CIR/2024/177 dated December 20, 2024
SEBI Circular SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/42 dated March 28, 2025
FAQs for LODR Regulations dated April 23, 2025
