A new SEBI circular outlines provisions for ESG disclosures for the value chain, including disclosures for upstream and downstream partners and reporting KPIs in the BRSR Core for their value chain.
The proposal outlines several changes to the value chain reporting system, including rationalizing the definition of ‘value chain’ to cover only significant partners.
Some of these changes include:
• The proposed changes to the definition of value chain partners include excluding upstream and downstream partners, each comprising 2% or more of a listed entity’s purchases and sales.
• This will reduce the maximum number of upstream/downstream partners from 50 to 38, ensuring coverage of key partners.
• For the first year of reporting ESG disclosures, previous year numbers will be voluntary.
• The listed entity will also disclose the percentage of total sales and purchases covered by these partners.
• The Ministry of Environment, Forest and Climate Change (MoEFCC) has recommended adding a leadership indicator to BRSR, stating the number of Green Credits generated by the company and its value chain partners.
The committee also recommends redefining value chain partners to include upstream and downstream partners, each comprising 2% or more of the entity’s purchases and sales, to avoid cost burden and compliance issues for small businesses.
The new provision is a part of the Security and Exchange Board of India (Sebi)’s expert Committee that has proposed measures to improve the ease of doing business concerning BRSR.
The proposed amendments will be carried out in Regulation 34 (2)(f) of LODR Regulations, SEBI said in the circular.
The proposed amendment to the LODR Regulations and SEBI circulars on BRSR aims to replace the term “assurance” with “assessment” in the annual report, requiring listed entities to obtain an assurance assessment of the BRSE Core for their value chain.
The Regulations, 2015 mandates annual reports of the top 1,000 listed entities based on market capitalization to include a BRSR report on ESG disclosures.
