Recent Amendments — ESG Reporting and BRSR

For over a decade Indian sustainability disclosure meant a thin, narrative Business Responsibility Report stapled to the annual report of a few hundred companies. Between 2021 and 2025 that changed beyond recognition. Through a cluster of amendments to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 — backed by detailed circulars on the Business Responsibility and Sustainability Report (BRSR), BRSR Core, value-chain ESG and third-party assurance — SEBI built a phased, market-capitalisation-tiered, partly machine-readable and increasingly externally verified ESG disclosure architecture. This chapter traces that evolution provision by provision, separates what is mandatory from what is voluntary, and untangles the 2024-25 reforms that swapped "assurance" for "assessment" and softened the value-chain mandate. For the regulatory bedrock on which all of this sits, read it alongside Principles Governing Disclosures and the broader SEBI LODR hub.

From the Business Responsibility Report to BRSR

The lineage of ESG disclosure in India predates BRSR. SEBI first mandated a Business Responsibility Report (BRR) in 2012 for the top 100 listed entities by market capitalisation, later codified in Regulation 34(2)(f) of the LODR Regulations and progressively extended to the top 500 and then the top 1,000 entities. The BRR was structured around the nine principles of the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs, 2011), but it was largely qualitative, narrative-driven and difficult to compare across firms or to benchmark year-on-year.

The conceptual upgrade came when the Ministry of Corporate Affairs released the National Guidelines on Responsible Business Conduct (NGRBC) in March 2019, refreshing the nine principles to align with the UN Guiding Principles on Business and Human Rights, the Sustainable Development Goals and the Paris Agreement. SEBI then constituted a committee whose recommendations produced the BRSR — a far more granular, quantitative and standardised format intended to make ESG performance measurable, comparable and decision-useful for investors. Understanding this shift matters because Regulation 34 sits within the suite of specific listing obligations for equity-listed entities, and BRSR is procedurally part of the annual report mandated under that regulation.

Regulation 34(2)(f): the statutory anchor

The entire BRSR edifice hangs on a single sub-clause. Regulation 34(2)(f) of the LODR Regulations requires the annual report of specified listed entities to contain a Business Responsibility and Sustainability Report describing the initiatives taken by the entity from an environmental, social and governance perspective, in the format specified by the Board. Crucially, the substantive content of BRSR does not live in the regulation text itself — Regulation 34(2)(f) is an enabling hook that delegates the format and detail to SEBI circulars. This drafting choice lets SEBI update the disclosure format without each time amending the gazetted regulation, which is precisely how the framework has been able to evolve so rapidly. It is a familiar regulatory technique — the primary instrument fixes the obligation and its enforceability, while a delegated circular carries the technical detail that genuinely needs frequent revision as reporting practice and data quality mature. The practical consequence for a reader is that the bare regulation will tell you little about what BRSR actually contains; the substance is in the circulars.

The current text of Regulation 34(2)(f) was substituted by the SEBI (LODR) (Second Amendment) Regulations, 2021, notified on 5 May 2021, replacing the reference to the old Business Responsibility Report with the BRSR. A further substitution arrived through gazette notification SEBI/LAD-NRO/GN/2023/131 dated 14 June 2023, which inserted the machinery for reasonable assurance of "BRSR Core" and for value-chain disclosure. Because the regulation merely enables, the operative reading sequence for any student or practitioner is: regulation text first, then the governing SEBI circular, then the latest master circular consolidating amendments. This layered structure mirrors the common obligations of listed entities, where high-level regulatory duties are fleshed out by subordinate circulars.

The 2021 mandate: BRSR for the top 1,000

SEBI operationalised BRSR through a circular dated 10 May 2021. The headline rule: filing the BRSR is mandatory for the top 1,000 listed entities by market capitalisation, replacing the BRR with effect from financial year 2022-23. For FY 2021-22 the BRSR was kept voluntary, giving large issuers a one-year runway to build data systems. Entities outside the top 1,000 may file BRSR voluntarily, and SEBI also prescribed a pared-down "BRSR Lite" for unlisted entities and smaller listed companies wishing to disclose on a voluntary basis.

This market-cap-tiered, phased design is the signature of the whole regime. Rather than imposing identical burdens on every listed company, SEBI calibrates obligations to size, on the logic that the largest issuers carry the greatest systemic ESG footprint and have the deepest compliance capacity. The same graduated philosophy underlies many corporate-governance norms in LODR, including the thresholds for board composition requirements such as independent and woman directors.

The choice to use market capitalisation rather than turnover or net worth as the tiering metric is itself deliberate. Market capitalisation is a live, market-determined proxy for an issuer's significance to public investors, and it tracks the population whose ESG conduct most affects the savings channelled into listed securities. The flip side is that the relevant ranking is reckoned as on 31 March of the preceding financial year, so a company crossing into the top 1,000 must gear up its data systems in advance of its first mandatory reporting cycle. BRSR Lite, by contrast, is a confidence-building device: it lets smaller and unlisted entities rehearse ESG disclosure on a lighter template — for instance reporting only their top three products rather than the full ninety-percent-of-turnover roster demanded of the comprehensive format — before any mandate reaches them.

Anatomy of the BRSR: three sections, two tiers of indicators

The BRSR format is organised into three sections. Section A — General Disclosures captures identifying and contextual data: CIN, registered office, products and services, operating locations, employee and worker numbers (disaggregated by gender), holding and subsidiary structure, and CSR details. Section B — Management and Process Disclosures sets out the policies and governance arrangements through which the entity gives effect to the nine NGRBC principles, including the role of the board and the highest authority responsible for sustainability. Section C — Principle-wise Performance Disclosures is the substantive core, reporting performance against each of the nine principles.

Within Section C, every principle carries two layers of questions. Essential Indicators are mandatory and seek hard data — energy and water consumption, greenhouse-gas emissions, waste, gender pay parity, training, complaints and the like. Leadership Indicators are voluntary and reward more ambitious disclosure, such as life-cycle assessments, value-chain engagement and green-credit generation. This essential-versus-leadership split is doctrinally important: it lets SEBI signal a direction of travel through voluntary leadership metrics before later hardening selected ones into mandatory requirements — exactly what happened when nine quantitative metrics were carved out as "BRSR Core".

A further design feature worth noting is the emphasis on disaggregation and comparability. Workforce data is broken down by gender and by permanent-versus-other status; environmental data is sought in absolute and in intensity terms (for example per rupee of turnover), so that performance can be normalised across firms of different sizes; and many questions require year-on-year figures so that trends, not just snapshots, become visible. This is the qualitative leap over the old Business Responsibility Report, which permitted free-form narrative that resisted comparison. By forcing structured, numeric, time-series data, the BRSR format makes ESG performance auditable in principle — a precondition for the later move to mandatory external verification of the Core attributes.

The nine NGRBC principles

BRSR performance disclosure is structured entirely around the nine principles of the NGRBC, which the guidelines describe as interdependent, interrelated and non-divisible. In summary: Principle 1 — conduct and govern with integrity, ethically, transparently and accountably; Principle 2 — provide goods and services sustainably and safely; Principle 3 — respect and promote the well-being of all employees, including those in value chains; Principle 4 — respect the interests of and be responsive to all stakeholders; Principle 5 — respect and promote human rights; Principle 6 — respect and make efforts to protect and restore the environment; Principle 7 — engage in influencing public and regulatory policy responsibly and transparently; Principle 8 — promote inclusive growth and equitable development; and Principle 9 — engage with and provide value to consumers responsibly.

For exam purposes the high-frequency principles are Principle 6 (environment — where greenhouse-gas, energy, water and green-credit disclosures sit) and Principles 3 and 5 (employee well-being and human rights — the social pillar). Mapping each BRSR Core attribute back to its parent principle is a common analytical question, and the alignment of these principles with the NGRBC rather than with any foreign standard is the point most often tested.

BRSR Core and the June 2023 amendment

The most consequential reform arrived in 2023. Recognising that voluntary, unverified ESG data invites greenwashing, SEBI carved out a sub-set of the BRSR — christened BRSR Core — comprising a limited number of key performance indicators across nine ESG attributes that are quantitative and amenable to external verification. The nine attributes broadly cover greenhouse-gas footprint, water footprint, energy footprint, embracing circularity (waste management), enhancing employee well-being and safety, enabling gender diversity in business, enabling inclusive development, fairness in engaging with customers and suppliers, and openness of business.

The legal mechanics were set in motion by gazette notification SEBI/LAD-NRO/GN/2023/131 dated 14 June 2023 amending Regulation 34(2)(f), followed by the operative circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12 July 2023, titled "BRSR Core — Framework for assurance and ESG disclosures for value chain". This circular did two distinct things: it mandated reasonable assurance of the BRSR Core attributes, and it introduced ESG disclosure for the value chain. Treating these as a single rule is a common error — they have separate scopes and separate timelines, examined below. The reform also strengthened the credibility of the broader disclosure system that the disclosure principles are meant to safeguard.

The phased assurance timeline

Under the July 2023 circular, mandatory reasonable assurance of BRSR Core was rolled out on a glide path keyed to market capitalisation. The top 150 listed entities were the first cohort, required to obtain reasonable assurance of their BRSR Core for FY 2023-24. The net then widens: top 250 from FY 2024-25, top 500 from FY 2025-26, and the full top 1,000 from FY 2026-27. This deliberate ramp gave assurance providers and reporting entities time to build capacity, and it concentrated the earliest and most rigorous scrutiny on the largest issuers.

It is essential to keep two numbers distinct. The top 1,000 figure governs who must file the BRSR at all (since FY 2022-23). The phased 150 / 250 / 500 / 1,000 figures govern who must obtain assurance of the BRSR Core sub-set. A company can therefore be obliged to file a full BRSR years before it is obliged to have any part of it externally verified. Confusing the filing population with the assurance population is the single most frequent mistake in this topic.

The choice of reasonable assurance, rather than the lighter limited assurance familiar from some foreign sustainability regimes, was itself significant when first announced — reasonable assurance is the higher-confidence engagement, closer in rigour to a financial audit opinion, and signalled SEBI's intent that BRSR Core data should be genuinely dependable rather than merely "not implausible". The later 2024-25 introduction of an assessment option, discussed below, softened the cost of that rigour without abandoning the principle that the quantitative Core must be independently checked. For the listed entity, the practical upshot is that BRSR Core data must be capable of withstanding third-party scrutiny from the very first year it falls within the assurance net, which is why the phased glide path matters operationally and not merely as a compliance date.

ESG disclosure for the value chain

The 2023 circular also reached beyond the listed entity itself into its value chain — a recognition that a company's true ESG footprint includes its upstream suppliers and downstream customers. As originally framed, value-chain ESG disclosure (on the BRSR Core attributes) applied to the top 250 listed entities from FY 2024-25 on a comply-or-explain basis, with the value chain defined as the upstream and downstream partners that cumulatively comprise 75% of the entity's purchases and sales by value, respectively.

This was the most contested element of the framework. Listed entities objected that they were being made accountable for data generated by third parties over whom they had no control and limited verification ability, and that the 75%-cumulative definition could sweep in an unmanageably long tail of small partners. Those objections drove the 2024-25 reforms that materially recast both the threshold and the timeline, discussed next.

The underlying rationale for reaching into the value chain at all is sound and reflects international practice: a listed company's most material environmental and social impacts frequently lie not within its own four walls but in its supply chain — in the emissions of its suppliers or the labour conditions of its contractors. Capturing only entity-level data would therefore miss the larger part of the ESG footprint. The regulatory tension is between that completeness objective and the reality that a company cannot vouch for data it neither generates nor controls. SEBI's 2024-25 recalibration is best understood as an attempt to hold the completeness objective while relieving the accountability strain — by making the disclosure voluntary and the partner set more sharply defined.

The December 2024 reforms: easing the value-chain mandate

At its meeting on 18 December 2024 the SEBI Board approved a package of changes — flowing from an Expert Committee on ease of doing business — that significantly recalibrated the value-chain and assurance requirements. Three changes stand out. First, the value-chain identification threshold was redefined: instead of cumulatively covering 75% of purchases and sales, the value chain now comprises partners that individually account for 2% or more of the entity's purchases or sales by value, with the entity retaining discretion to limit disclosure to those partners cumulatively making up 75%. Second, value-chain ESG disclosure was downgraded from comply-or-explain to voluntary, addressing the accountability-for-third-party-data concern head-on. Third, the timelines were deferred by a year: value-chain ESG disclosure shifted to FY 2025-26, and the related limited assurance/assessment to FY 2026-27, with comparatives waived in the first year of reporting.

These changes were given regulatory effect through the SEBI (LODR) (Amendment) Regulations, 2025 and the implementing circular dated 28 March 2025, "Measures to facilitate ease of doing business with respect to framework for assurance or assessment, ESG disclosures for value chain, and introduction of voluntary disclosure on green credits". The reforms reflect a regulator recalibrating an ambitious mandate against real-world compliance cost — a recurring theme across the LODR amendments, and one that connects this chapter to the broader logic of listed-entity obligations.

"Assurance" versus "assessment": a deliberate vocabulary shift

One of the subtlest but most examinable 2024-25 changes is terminological. The Expert Committee recommended that entities be given the option to undertake either reasonable assurance or an assessment of their BRSR Core and value-chain ESG disclosures. The distinction is not cosmetic. "Assurance" is a defined term in the auditing and assurance standards ecosystem, performed by professionals bound by specific professional-body standards; restricting BRSR Core verification to that population narrowed the pool of providers and pushed up cost. "Assessment" is a broader concept that, per SEBI, can be carried out against standards notified by SEBI without the same professional-association constraints, widening the market of eligible providers and reducing compliance expense.

For students, the safe formulation is: the BRSR Core regime now permits assurance or assessment, the choice resting with the listed entity, with both subject to standards SEBI has notified. The change is squarely a deregulatory, ease-of-doing-business move and should be characterised as such rather than as any dilution of the underlying ESG data requirements, which remain intact.

Green credits: a new voluntary leadership indicator

The 28 March 2025 circular introduced a new voluntary disclosure on green credits, slotted into the Leadership Indicators under Principle 6 (environment). The new indicator invites entities to report green credits generated or procured — for example through tree plantation under the Green Credit Programme — both by the listed entity itself and by its top 10 value-chain partners, applicable from FY 2024-25 onwards.

Placing green credits among the voluntary leadership indicators rather than the mandatory essential indicators is consistent with SEBI's established pattern: introduce an emerging metric as voluntary, let market practice and data quality mature, and reserve the option of later mandating it. It also links the BRSR framework to the parallel Green Credit Programme administered under environmental law, signalling regulatory coordination across the ESG landscape rather than a siloed securities-law mandate. Extending the indicator to the top 10 value-chain partners, rather than confining it to the listed entity, is consistent with the framework's broader ambition of looking beyond the corporate boundary — but keeping it voluntary acknowledges the practical difficulty of obtaining reliable green-credit data from third parties at this early stage.

Interplay with the Companies Act and CSR

BRSR does not operate in a vacuum; it intersects with the Companies Act, 2013. Section 135 of the Companies Act mandates corporate social responsibility spending for companies crossing prescribed net-worth, turnover or profit thresholds, and Section 134(3)(m) read with the relevant rules requires disclosure of conservation of energy and technology absorption in the board's report. BRSR Section A expressly captures CSR details, so a listed company simultaneously satisfies a securities-law disclosure duty (LODR Regulation 34) and reflects a company-law spending obligation (Section 135) within the same document.

The two regimes serve different ends, however. Section 135 is an expenditure mandate enforced through company-law machinery; LODR Regulation 34(2)(f) is a disclosure mandate enforced through the listing-agreement and SEBI's enforcement powers. A company can comply with one and fall foul of the other. Keeping the disclosure-versus-expenditure distinction clear, and recognising that BRSR consolidates rather than replaces these parallel duties, is a frequent point of conceptual testing alongside the foundational material in Introduction, Scope and Definitions.

Enforcement, materiality and the greenwashing concern

The animating policy behind moving from voluntary narrative reporting to assured quantitative disclosure is the prevention of greenwashing — the practice of overstating environmental or social credentials to attract ESG-conscious capital. Unverified disclosures are easy to embellish; this is exactly why SEBI introduced mandatory verification (assurance or assessment) of the quantitative BRSR Core attributes rather than leaving the whole BRSR to self-certification.

BRSR sits within the LODR enforcement architecture generally. A false or misleading BRSR disclosure can attract action under the LODR Regulations and, where it amounts to a misrepresentation that influences securities prices, potentially under the SEBI Act, 1992 and the PFUTP Regulations. SEBI's own dedicated dos-and-don'ts circular on ESG ratings and disclosures, and its caution against unsubstantiated "net-zero" or "carbon-neutral" claims, reinforce that BRSR statements are regulated representations and not mere marketing. Material accuracy in these disclosures therefore implicates the same fidelity-to-truth obligations that run through the principles governing disclosures.

Exam strategy and common traps

For judiciary and CLAT-PG aspirants, a handful of distinctions reliably separate strong answers. First, anchor everything in Regulation 34(2)(f) and remember it is an enabling provision elaborated by circulars, not a self-contained rule. Second, keep the populations straight: top 1,000 for filing BRSR (FY 2022-23 mandatory, FY 2021-22 voluntary); 150 / 250 / 500 / 1,000 phased for BRSR Core assurance (FY 2023-24 through FY 2026-27). Third, treat BRSR Core (nine quantitative attributes, externally verified) as a distinct sub-set of the full BRSR.

Fourth, on the value chain, know both the original rule (top 250, comply-or-explain, 75% cumulative, FY 2024-25) and the December 2024 / March 2025 recast (voluntary, 2% individual threshold, deferred to FY 2025-26 with assurance/assessment to FY 2026-27). Fifth, characterise the assurance-or-assessment option and the green-credit indicator correctly — both are ease-of-doing-business and direction-setting moves, not dilutions of substance. Finally, connect BRSR to the NGRBC nine principles and to Section 135 of the Companies Act to demonstrate cross-regime command. A precise, date-anchored answer that respects these distinctions will outscore a vague "ESG is good for governance" essay every time. Build the rest of your LODR foundation through the SEBI LODR hub.