The Securities and Exchange Board of India (SEBI) on Friday announced a set of updates to facilitate ease of doing business. The updates, which include disclosing green credits both at the entity and the value chain level, enhance the transparency, comparability, and reliability of ESG disclosures by Indian companies.
Under the updated framework, companies can earn green credits by initiating environmental restoration activities, such as tree plantations on degraded lands, with value chain partners. These credits will serve as indicators of environmental leadership as per Principle 6 of the BRSR.
Entities can now voluntarily disclose under Principle 6 of BRSR as an additional 8th leadership indicator on green credits generated or purchased. Both by the listed entity as well as by the top ten value chain partners. This shall be applicable for BRSR disclosures for FY 2024-25 and onwards.
Other key SEBI updates are as below:
Assessment/Assurance
Standardized Assessment of BRSR Core (by 3rd party) per Annexure 17A
Listed entities shall mandatorily undertake assessment or assurance of the BRSR Core, as per the glide path specified below:
| Financial Year | Applicability of BRSR Core to top listed entities (by market capitalization) |
| FY2023-24 | Top 150 Listed entities |
| FY2024-25 | Top 250 Listed entities |
| FY2025-26 | Top 500 Listed entities |
| FY2026-27 | Top 1000 Listed entities |
Starting FY25, third-party assessments of BRSR Core disclosures will follow standards developed by Industry Standards Forum (ISF), made in consultation with SEBI.
Also, BRSR Core specifies Data and Approach for Assessment or assurance as a base methodology.
ESG Disclosures for Value Chain
To facilitate ease of doing business, provide additional time to listed entities and their value chain partners for setting up measurement and reporting systems and avoid unintended impact on small businesses in terms of cost and compliance requirements, SEBI has decided to defer the disclosure and assessment of the value chain by one year.
SEBI also refined the definition of value chain partners, as those upstream and downstream entities that comprise 2% or more of a company’s purchases or sales, with a disclosure limit covering 75% of transactions.
The disclosures shall be applicable to the top 250 companies by market capitalisation from FY 2025-26 with assessment / assurance becoming applicable from FY2026-27, both on a voluntary basis.
It also adds 2 new paras:
- 3.5 For the first year of reporting ESG disclosures for value chain, reporting of previous year numbers shall be voluntary. To illustrate, for value chain disclosures of FY 2025-26, reporting of previous year data (i.e., data for FY 2024-25) shall be voluntary.
- 3.6 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, respectively, for which ESG disclosure are provided.
