With the fifth largest economy in the world, India’s sustainability action substantially impacts the world’s collective sustainability journey. Having pledged to reach net zero emissions by 2070, the Indian government is taking significant steps to bridge the gap between sustainability intentions and performance. The Securities and Exchange Board of India (SEBI) introduced its Business Responsibility and Sustainability Report (BRSR) framework in 2021, a standard for ESG-related disclosures that is mandatory for the top 1,000 listed entities by market capitalization.
Since FY 2022/23, organizations in the regulation’s scope have been required to publish their BRSR reports, encompassing 300 data points, alongside their annual reports. In July 2023, SEBI introduced BRSR Core – a more stringent subset of the BRSR mandating 42 KPIs and value-chain disclosures – alongside BRSR Lite, a simplified voluntary disclosure for smaller, unlisted firms. Regulatory compliance may be challenging for many organizations, with less than one third (27%) of Indian businesses reporting that they feel well-prepared to meet ESG requirements, according to Deloitte’s ESG preparedness survey report.
As deadlines for the increasing scope and complexity of the BRSR draw closer, decision-makers at affected firms across India should:
- Engage with a diverse group of stakeholders.
Successful sustainability reporting requires firm-wide buy-in, as all aspects of a business impact a firm’s ESG performance. Reaching out to a wide range of stakeholders will enable sustainability leads to design and implement strategies that are well-suited to business operations, avoiding internal data silos. Broad and deep engagement across an organization also significantly enhances the accuracy and relevance of ESG reporting, ensuring that disclosures truly reflect the firm’s impact and priorities.
- Use reporting to improve performance; not as a box-ticking exercise.
Through the BRSR, SEBI encourages firms to use disclosures for genuine business transformation, rather than just going through the motions of compliance. Improving the quality of reporting – by investing the time and resources into collecting accurate, meaningful data on relevant metrics – allows decision-makers to gain greater insight into the organization’s impacts and dependencies. This mitigates the reputational – and financial – risk of greenwashing and provides the opportunity to use sustainability as a competitive advantage. - Commit to establishing a sustainable supply chain.
While the BRSR only requires the top 250 firms to make ESG-related disclosures across value chains from FY 2024/25, businesses should promote ESG-aligned performance within their supply chains to support long-term resilience and sustainable development. This may become mandatory as regulations develop – whether due to further BRSR expansion or as Indian firms operating within the EU come under the purview of the CSRD – so present efforts will stand organizations in good stead for future compliance. - Consider working with a consulting provider.
The sustainability-related regulatory landscape is evolving constantly, in India as across the world. Organizations have already begun to suffer from a shortage of the right resourcing and expertise to meet compliance requirements; BRSR Core may lead Indian firms to realize their existing skills and bandwidth are no longer adequate. Sustainability leaders should consider working with specialist consultancies to ease the burden and operationalize ESG ambitions. With the right external partner, firms are more empowered to create robust sustainability strategies, improve regulatory preparedness and enhance data governance. - Invest in technology to meet sustainability needs.
Decision-makers should also review their technological preparedness for ESG reporting. Software tools can be pivotal in improving sustainability performance, streamlining data collection, optimizing analysis and enhancing reporting. Circular economy tools help to improve product footprints, social impact solutions provide greater social engagement and supply chain software enhances visibility over supply chains. Perhaps most vitally, ESG reporting software is a key aspect of a comprehensive reporting strategy, allowing firms to automate data collection and improve validation.
While the BRSR is the sole framework for ESG disclosures in India, it is supported by a range of business regulations that influence different aspects of corporate ESG and sustainability performance. To find out more, read Strategic Focus: Understanding ESG And Sustainability Regulations In India.
