Introduction

The robustness of a country’s ESG disclosures is critical for building investor trust and encouraging the inflow of climate finance. A 2024 global study^[1] highlights that, as global investors increasingly incorporate sustainability factors into their investment decisions, they face inconsistent and unclear ESG disclosures. As a result, they are seeking internationally comparable regulatory standards to address data gaps and inconsistencies across jurisdictions. Beyond addressing these challenges, there is also an opportunity for a country to develop such regulatory standards. Sustainable investing will likely continue to grow as continued market momentum towards sustainability is forecast to drive more than US$40 trillion in global economic growth between 2021 and 2070, alongside substantial capital reallocation, infrastructure development, and investment in the coming decades.

The Securities Exchange Board of India (SEBI) introduced the BRSR^[2] standards in 2021 by amending Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015^[3] (SEBI LODR Provisions), marking an important step towards establishing robust corporate ESG disclosure standards in India (a progressive step from the erstwhile Business Responsibility Report standards). Applicable from Financial Year (FY) 2022-23, the BRSR requires the top 1,000 listed companies in India to disclose their ESG performance in a prescribed format. Aligned with the nine principles of the National Guidelines on Responsible Business Conduct^[4] (NGRBC) issued by India’s Ministry of Corporate Affairs (MCA) for responsible business conduct, the BRSR was further strengthened with the introduction of ‘BRSR Core’^[5] in July 2023. As a subset of the BRSR, BRSR Core requires listed companies to provide additional disclosures against identified Key Performance Indicators (KPIs), supported by third-party compliance verification, from FY 2023-24. As of 2025-2026, BRSR Core applies to the top 500 listed companies and will expand to cover the top 1,000 listed companies by FY 2026-27.

These measures mark progress in advancing corporate sustainability in India, as businesses align with the national target of becoming a developed country by 2047 and achieving net-zero emissions by 2070. As for the emissions reduction target, a 2024 report^[6] by the Indian Institute of Management, Ahmedabad, indicates that there is limited traction in companies pursuing net-zero commitments aligned to India’s national targets: of the 1,012 companies assessed, only 179 have made explicit net-zero or carbon neutrality commitments, and just 119 have specified timelines. Commitments also vary across sectors, affecting the quality and consistency of disclosures under the BRSR. There remains scope to enhance the BRSR framework’s effectiveness by aligning it more closely with leading global standards, particularly the Global Reporting Initiative (GRI) and the International Financial Reporting Standards (IFRS) issued by the International Sustainability Standards Board (ISSB)—to enhance interoperability and relevance and to encourage broader adoption of corporate sustainability practices and disclosures. The challenge and opportunity lie in strengthening interoperability while reflecting India’s context and ensuring disclosures remain both feasible for companies and decision-useful for investors and other stakeholders. Against this backdrop, this report outlines practical reforms to position the BRSR as a ‘gold standard’ for corporate ESG disclosures in India.

Overview of International Business Sustainability Reporting Standards

At present, several international sustainability reporting standards are in use. Some are voluntary, such as those issued by the ISSB and the GRI, while others are mandatory and jurisdiction-specific, including the European Union’s (EU) Corporate Sustainability Reporting Directive^[7] (CSRD) and the European Sustainability Reporting Standards^[8] (ESRS). The global benchmarks for ESG standards that are focused on financial materiality are IFRS Standard 1 (general sustainability-related) (IFRS S1) and IFRS Standard 2 (climate-related) (IFRS S2), issued by the ISSB. Currently, 37 jurisdictions worldwide^[9] (Brazil, Indonesia, Australia, and the EU), which together account for ~60 percent of the global Gross Domestic Product (GDP), more than 40 percent of the market capitalisation and ~60 percent of global Greenhouse Gas (GHG) emissions, have adopted, announced plans to adopt, or are taking steps towards adopting the IFRS standards, demonstrating their growing relevance.

Furthermore, the GRI, which helps assess an organisation’s significant effects on the economy, environment, and people, remains the dominant standard used for impact materiality. 78 percent of the world’s 250 biggest companies worldwide use GRI for sustainability disclosures,^[10] including those in Singapore, Japan, Brazil, and Taiwan.

Other standards, such as the Climate Disclosure Standards Board^[11] (CDSB), the Task Force on Climate-related Financial Disclosures^[12] (TCFD), and the Sustainability Accounting Standards Board^[13] (SASB), have been integrated into or superseded by ISSB’s IFRS S1 and S2. Further, the Integrated Reporting Framework,^[14] now part of the IFRS system, remains available as a voluntary tool for connecting financial and sustainability information, but is no longer needed with the adoption of the ISSB-IFRS standards.

The analysis in this brief is informed by: (1) a comparative benchmarking of key provisions in the current BRSR framework against the ISSB standards (relevant standards being IFRS S1 and S2) and the GRI; and (2) a high-level roundtable discussion organised by the Observer Research Foundation^[a] with diverse stakeholders, including regulators, industry bodies, investors, compliance advisors, regulatory experts, sustainability experts, and MSME experts. The analysis is qualitative in nature and reflects perspectives and data as of October 2025. As the BRSR is a recent regulatory development, empirical evidence on its direct and systemic impacts remains emergent. This analysis therefore relies primarily on early compliance signals and observable trends drawn from stakeholder consultation.

Comparative Benchmarking

The extent of alignment or misalignment between key provisions of the BRSR and the ISSB (IFRS S1 and S2) and the GRI has been assessed below:

Table 1: ISSB (IFRS S1 and S2) vs. GRI vs. BRSR

	ISSB - IFRS S1 and IFRS S2	GRI	BRSR
Scope of Coverage	IFRS S1 covers sustainability-related financial information and applies to all entities (business and not-for-profit) issuing financial reports (need not be under IFRS or Generally Accepted Accounting Principles) disclosing sustainability-related data (including scope 1, 2, and 3 emissions) as well as risks and opportunities reasonably affecting the entity.   (IFRS S1, paragraphs 5-9)   IFRS S2 covers disclosure of climate-related physical and transition risks as well as climate-related opportunities.   (IFRS S2, para 6–9)	As a voluntary international standard, it covers all types of organisations wishing to report their impacts on the economy, environment, and people, including impacts on human rights because of their activities or their business relationships.   (GRI 1: 2.2, 2.5)	As India’s ESG regulatory framework, the BRSR mandates the top 1,000 listed companies (by market capitalisation) to disclose information across nine identified ESG principles and KPIs, including scope 1 and scope 2 emissions. Currently, scope 3 emissions are not mandatory. All other listed companies can voluntarily report under the BRSR.   (SEBI LODR Regulations 2015, SEBI Circular dated July 12, 2023, SEBI)
Purpose of Reporting Data and Design	IFRS S1 aims to facilitate the disclosure of all sustainability-related risks and opportunities that could reasonably be expected to affect an entity’s cash flows, access to finance, or its cost of capital over the short, medium, or long term.   To facilitate disclosures that are comparable, verifiable, timely, and understandable and therefore useful to the primary users of an entity’s financial reports when making decisions about providing resources to the entity.   (IFRS S1 paragraphs 1-4, 10)   IFRS S2—To enable users of financial reports to understand the governance processes, controls, and procedures an entity uses to monitor, manage, and oversee climate-related risks and opportunities.   To facilitate understanding of an entity’s strategy for managing climate-related risks and opportunities.   (IFRS S2 paragraph 5)	To help understand an organisation’s impacts and how it integrates sustainable development in its business strategy and model.   To identify financial risks and opportunities and assess long-term success.   For research and benchmarking.   (GRI 1)	To facilitate ESG disclosures by top listed entities with relevance to the Indian context.   To integrate ESG considerations into business reporting.   To enable investors and other stakeholders to assess ESG-related risks and opportunities in the top-listed companies.   (SEBI Circular dated 12 July 2023, SEBI Circular dated 10 May 2021)
Determination of Material Information	IFRS S1 defines materiality based on “whether omitting, misstating or obscuring that information could reasonably be expected to influence decisions of primary users of general-purpose financial reports”. Materiality judgements are entity-specific, and the standard does not prescribe thresholds or quantitative parameters. As materiality assessed on annual basis.   (IFRS S1 paragraphs 17-19)   IFRS S2 does not contain separate materiality provisions and instead draws on the materiality approach set out in IFRS S1, applying it specifically to climate-related information.	Materiality is not limited to financial materiality. It includes impact materiality as well.   The process for determining materiality involves using sectoral standards to understand context and assess impact (actual + potential), and this is aided by stakeholder consultation to determine the significance of impact. The most significant ones are “material”, and both the process of determination and material topics are to be disclosed. This reviewed for each reporting period.   (GRI 2.2, 3)	Determination of materiality is less formalised, requiring companies to identify business-related ESG issues that present risks or opportunities. The rationale for selection and the approach to mitigate the risks needs to be disclosed. Quantitative disclosures against identified KPIs in BRSR Core are to be provided (Scope 1 and 2 emissions, energy consumption.) in addition to the qualitative disclosures under the larger BRSR framework. However, the determination of material issues focuses more on impact materiality. Financial materiality is not formally integrated into this process.   (SEBI LODR Regulations 2015, SEBI Circular dated 12 July 2023)
Sectoral Standards	IFRS S1 refers companies to the SASB standards for identifying and disclosing sustainability-related risks and opportunities within their particular sector or industry. The SASB sectoral standards have been integrated into the IFRS S1 framework.   (IFRS S1 paragraphs 55, 58, 59)   IFRS S2—Industry-specific climate metrics associated with the disclosure topics are embedded in the IFRS S2 guidance appendix.   (IFRS S2 paragraph 12, Appendix B)	Sector-specific standards are provided for high-impact industries—these includes material issues specific to the identified sectors and what to report on each such material issue. An organisation must use all applicable sectoral standards in which it has substantial activities.   (GRI 11 onwards)	No explicit formalisation of sectoral-specific standards. There are just sector-specific guides for 38 sectors to help companies contextualise in their BRSR reporting, but and these are granular as the global frameworks.   (National Stock Exchange - An Integrated Guide to BRSR)
Value Chain Disclosures	IFRS S1 requires disclosure of material sustainability-related risks and opportunities across the entire value chain.   (IFRS S1 paragraphs 11-12, Appendix B)   IFRS S2 requires disclosure of current and anticipated effects of climate-related risks and opportunities on the entity’s business model and value chain. Further, where in the business model and entire value chain the climate-related risks and opportunities are concentrated needs to be disclosed as well.   (IFRS S2 paragraphs 13)	Requires very detailed assessing and reporting of sustainability impacts and risks across the entire value chain (upstream and downstream), with detailed topic guidance by sector. It also includes GHG removals, energy consumption, and other ESG factors across the value chain.   (GRI 2-6, 102-9, 103-3)	Top 250 listed companies (by market capitalisation) can voluntarily disclose value chain ESG information (a shift from a previously ‘comply-or-explain’ stance). The value chain covers upstream and downstream partners, accounting for over 2 percent of purchases/sales by value, up to 75 percent coverage. External assurance for these disclosures is also voluntary and applicable from FY 2025-26.   (SEBI LODR Regulations 2015, SEBI Circular dated 28 March 2025)
Accountability Mechanism	IFRS S1—Disclosure of the governance body/authority responsible for oversight of sustainability-related risks and opportunities. Disclosures also include governance oversight processes (e.g., functions, processes and competence of the governing body/ authority), as well as the risk assessment process, scenario analysis used, and risk monitoring.   No external assurance mandated.   (IFRS S1 paragraphs 26-27)   IFRS S2—Similar accountability mechanism for the disclosure of climate risks and opportunities.   (IFRS S2 paragraphs 5-7)	Internal Controls—internal audit function, validation by the highest governance authority in the organisation.   External Assurance—by an independent provider to assess the quality and credibility of the qualitative and quantitative information reported, and to assess the process of preparing the information.   Stakeholder or Expert Panels—to seek views on its approach to sustainability reporting or for advice on the information to be reported.   (GRI 2: 2-5, 5)	Internal Controls—No robust internal control or governance requirements. Companies only need to provide a statement (as per their preference) from the director responsible for BRSR disclosures on the ESG challenges, targets and achievements.   Additionally, the highest authority responsible for the company's ESG policy implementation and disclosures needs to be disclosed.   External Assurance—by an independent provider, mandated for BRSR Core KPIs, with a glide path to applicability starting from the top 150 listed companies (by market capitalisation) from FY 2023-24 and covering the top 1,000 listed companies by FY 2026-27. External assurance is, however, voluntary for value chain disclosures, as highlighted in the row above.   There is no specific penalty or action for failure to comply with BRSR compliance; a general penalty of INR 2,000 for every day of non-compliance may be imposed.   (SEBI LODR Regulations 2015, SEBI Circular dated 28 March 2025, SEBI Circular dated 22 January 2020)

Stakeholder Consultation

On 9 October 2025, the Observer Research Foundation convened a high-level stakeholder roundtable discussion to seek inputs on the effectiveness of the current BRSR framework and identify areas to enhance its interoperability with international ESG standards. The roundtable was specially curated to bring together diverse perspectives, including those of regulators, industry bodies, investors, compliance advisors, regulatory experts, sustainability experts, and MSME experts. The insightful contributions from these broadly representative stakeholder groups have been captured in this section.

Regulatory Inputs

• Owing to earlier benchmarking against international standards like the TCFD and GRI at the time of drafting the framework, it is estimated that BRSR, in its current form, is about 40 percent aligned with ISSB (IFRS S2). A complete adoption of standards like ISSB is difficult due to domestic nuances. However, interoperability and convergence are progressing to the extent that markets are ready and national commitments are reflected. Incremental convergence is therefore preferred to balance international credibility with domestic feasibility.
• While foreign investors are increasingly demanding ISSB and GRI comparability, dual reporting is being seen as an impediment at the regulatory level, as many globally integrated companies continue to file parallel disclosures under BRSR and other international frameworks.
• Based on the review of the submitted data over the past three reporting years since the BRSR was implemented, persistent data quality issues have been observed. There is scope for the development of sector-or industry-specific standards as well as improvement to third-party assurance mechanisms to address these concerns and enhance the quality of reporting.
• Lastly, there is recognition that sustainability reporting must ultimately extend beyond the top 1,000 listed companies, especially since many of these companies already follow voluntary or global reporting frameworks due to international presence or investor demands.

Industry and Stakeholder Inputs

On the Need for International Interoperability and Benchmarking

• Convergence with global standards: Stakeholders agreed that global comparability and interoperability are essential to boost the BRSR’s credibility and enable companies to access international finance. Many international investors and development finance institutions already require ISSB- and GRI-aligned disclosures. Compliance with these international standards can improve access to cheaper and more diversified capital. A 2023 study^[15] finds that mandatory ESG disclosure reforms enhance price discovery efficiency and lead to real market outcomes, including a lower cost of capital, shifts in institutional ownership, and higher firm valuation, effectively acting as a substitute for ‘internal corporate governance’. Alignment with global standards can therefore strengthen India’s attractiveness to international finance and signal leadership within the Global South.
• Reduced duplication and compliance costs: Indian multinationals often report under multiple domestic and international disclosure frameworks, increasing compliance costs and complexity. Allowing “deemed compliance” under the BRSR for companies already aligned with international standards would help with ease of doing business.
• Market pull via clients: In sectors like IT, where over 90 percent of revenues come from overseas clients (especially in the UK, EU, and US), companies are now required to meet sustainability disclosure standards as part of their client Request for Proposals (RFPs). These include reporting on baselines (emissions data), diversity and inclusion, and other science-based targets. Adherence to international ESG standards is not just a compliance cost; it is a business opportunity that directly influences revenue and competitiveness.

On Enhancing the Scope of Coverage

• Expansion of scope: Some stakeholders have endorsed expanding the scope beyond the top 1,000 listed companies and suggested using a revenue lens instead of market capitalisation to more effectively bring high-value companies within the regulatory purview. It was also suggested that other regulatory pathways, like the SEBI (Alternative Investment Funds) Regulations, 2012 be used for early integration and promotion of ESG culture within the uncovered companies.
• Sector-specific material disclosures: Experts claimed that the current sector-agnostic BRSR requirements are not coherently tied to industry-specific materiality and have created mismatched indicators, e.g., financial services reporting on waste and water. They urged the creation of sector-specific templates with net-zero pathways—annual or five-year targets—to move beyond purely qualitative impact materiality towards explicit double materiality integration using both financial and impact lenses.

On Addressing Reporting and Data Quality Concerns

• Need for regulatory clarity: Stakeholders sought greater clarity on ambiguous disclosure requirements through the issuance of guidance notes. For example, companies faced difficulty in interpreting or quantifying indicators related to Scope 3 emissions, climate risk, human rights impact, and governance responsibilities. Companies also found it challenging to accurately identify “the highest authority responsible for implementation and oversight of the Business Responsibility policy(ies)” and whether this should be the Company Secretary, the Chief Sustainability Officer, or the Chief Executive Officer. Such issues were seen as contributing to inconsistent and poor-quality reporting.
• Reporting boundary mismatch: Many companies apply different reporting boundaries for financial and non-financial disclosures. While financial reports tend to cover global operations, ESG reporting is often limited to domestic activities to minimise complexity and compliance costs. Given that investors prefer consolidated group-level reporting, experts claimed that a regulatory push on this front would increase the completeness and comparability of the disclosures.
• Transition plan integration: Transition plan elements are scattered across multiple BRSR sections, making it difficult for investors to connect targets, actions, and governance structures. Stakeholders sought a regulatory guidance note consolidating these elements into a single document similar to ISSB (IFRS S2). This would make the reported data comparable and decision-useful for investors.

On Supply Chain and MSME Concerns

• Supply chain data integrity: Stakeholders emphasised the need to strengthen Scope 3 guidance by aligning it with ISSB (IFRS S2) and GRI, and by improving supply chain visibility and data quality. Currently, in high-emission sectors, companies are adopting the best global practices like Life Cycle Assessments (LCAs), supplier rationalisation, and barcoding and traceability systems to address data gaps. Allowing LCA-based proxy estimates where supplier data is unavailable will help companies, especially those in China-dependent sectors.
• MSME capacity building: The need for capacity building for MSMEs was highlighted, especially for micro enterprises, as their lack of manpower and funds for sustainability reporting is far more pronounced than that of small and medium enterprises. They emphasised that, as MSMEs see compliance as an additional cost and don’t necessarily see it as an economic incentive, unless compliance for them is clearly tied to financial and policy incentives in the framework, they will not feel motivated to adequately comply. Consultants suggested corporate-led supplier programmes using low-cost, easy-to-use digital reporting tools, as well as linking their ESG compliance to government incentive schemes like the Z scheme (Zero Defect, Zero Effect Scheme—Government of India initiative for MSMEs), to phase in the MSMEs within the regulatory purview (“nudge + support” model).

On Enforcing Governance and Accountability

• Financial opportunity framing: Reframing the BRSR as a financing enabler and not just as another compliance mechanism may prove more effective in enforcing compliance. Treasury and finance teams of companies should also be involved in linking disclosures with credit access and investor confidence.
• Accountability mechanisms lacking: There is a need for BRSR-specific penalties and consequences for non-compliance beyond the general SEBI LODR provisions. A clear deterrence-based enforcement tied to disclosure quality would enforce accountability.
• Benchmarking and target-setting: Experts stated that businesses repeatedly sought clarity on whether their emissions or diversity data disclosed are “good” or “bad”. Sectoral benchmarks (e.g., for steel, cement, power, textile, etc.) and standardised targets/roadmaps to net-zero could help address this concern.
• Need for board-level oversight: Mandating the establishment of a board-level ESG committee under the SEBI LODR or the Companies Act, 2013 could strengthen governance. Further, sustainability reports should carry a sign-off from the board committee, similar to audited financial statements, ensuring ownership and accountability.
• Carbon market linkage: With India’s upcoming domestic carbon market framework under the Carbon Credit Trading Scheme (CCTS) introducing its own monitoring, reporting, and verification (MRV) requirements, aligning BRSR with CCTS could improve emissions accuracy and reduce duplicative reporting. Such interoperability would enhance credibility for regulators and investors and enable cross-validation of emissions data.

Analysis and Recommendations

Regulatory Design-Level Recommendations

1. Reframe BRSR as a financial enabler and not just a compliance requirement in regulatory design.

Linking verified BRSR performance to sustainability-linked financing within the regulatory framework and positioning the BRSR as an eligibility gateway for such financing could incentivise banks and investors to integrate BRSR performance into their risk models and pricing frameworks. A KPMG report^[16] notes that ESG performance can directly influence shareholder value by affecting major value drivers, including sales growth, operating margin, cost of capital, and asset resilience. Aligning disclosure quality with tangible financial benefits would help shift corporate incentives from box-ticking towards value creation. This will also help bring finance teams into the reporting process, strengthening ownership and improving the quality of ESG reporting. However, to avoid any risk of greenwashing, SEBI must ensure that its compliance verification systems are robust. Ultimately, the efficacy of the BRSR will correspond to the level of the compliance systems built.

Responsibility: SEBI, Reserve Bank of India (RBI)

2. Consider ISSB (IFRS S1 and S2) and GRI as baselines for financial materiality and impact materiality, respectively, while embedding India-specific corporate and social overlays. Further, introduce a ‘deemed compliance’ provision whereby companies that prove compliance with ISSB and GRI are recognised as being compliant under the corresponding BRSR requirements as well. 

SEBI’s BRSR guidance note allows for interoperability between the BRSR and other key international standards via cross-referencing; however, in practice, this is ineffective and leads to duplication of reporting efforts. While the intent to contextualise ESG standards for India’s regulatory and corporate landscape is well placed, India’s ESG evolution depends on achieving greater regulatory coherence and comparability. Unless ISSB (IFRS S1 and S2) and GRI are adopted as baselines, despite enhancements to the BRSR, Indian companies will continue to face duplicative reporting, since international investors view these global standards as benchmarks of good ESG reporting. This is why companies and countries are increasingly adopting these standards to encourage more climate financing.

The BRSR should therefore evolve from a static compliance exercise into a strategic coherence framework—retaining both developmental nuance and regulatory flexibility. All future enhancements to the BRSR should be undertaken in this spirit, especially since the BRSR is still in its early stages of application, and this is the ideal time to instil confidence in stakeholders and influence their perception. To ensure regulatory influence with the intent of helping corporates in India raise international climate financing, SEBI and the MCA should engage closely with the ISSB and GRI to help shape their ESG standards. This will also help gain deeper insights into international trends on this front.

Responsibility: SEBI

3. Design interoperability as a multi-channel architecture, not just across standards. Create a unified ESG data architecture that links BRSR to—

• the RBI, the Insurance Regulatory and Development Authority of India (IRDAI), and other regulatory climate risk disclosures (for systemic risk capture);
• SEBI repositories and MCA databases (for regulatory efficiency); and
• domestic carbon market MRV systems (for emissions verification).

A digital, centralised ESG repository with cross-regulatory alignment ensures consistency, allows benchmarking, enhances credibility, and avoids manual errors and double reporting. Regulatory and market use cases for these databases can be explored for trend analysis, and research.

Responsibility: SEBI, RBI, IRDAI, Bureau of Energy Efficiency (BEE), Ministry of Finance (MOF), MCA, Ministry of Power (coordinated by MOF)

4. Expand mandatory BRSR coverage beyond the top 1,000 listed firms to other listed companies and large unlisted companies, including a revenue- or emissions-based lens instead of solely relying on market capitalisation.

Limiting BRSR to the top 1,000 firms covers less than half of India’s emissions footprint. Expanding coverage based on economic and environmental materiality will increase representativeness. Phased inclusion of other listed companies and unlisted companies will ensure wider adoption of ESG culture in India. The proportional approach recommended at Recommendation 5 below must be adopted in doing this.

Responsibility: SEBI, MCA

5. Embed proportionality and inclusivity in the regulatory design by recognising the different levels of readiness of listed, unlisted, and MSME companies and adopting a tiered approach.

A uniform framework risks widening compliance asymmetry and will defeat the objective of the BRSR framework, even with capacity-building efforts. Readiness and resources vary across different company sizes and sectors. As a 2025 study^[17] highlights, a typical MSME in India with just one manufacturing unit is subject to 1,450 compliance obligations annually, with regulatory cost burden ranging from INR 13 lakhs to INR 17 lakhs, and 42 regulatory updates per day—burdens they simply do not have the in-house expertise or institutional support for. Adding the burden of BRSR compliance without accounting for proportionality will lead to what the study rightly refers to as ‘regulatory cholesterol’. Embedding proportionality via sector-specific reporting templates and simplified digital reporting into the regulatory architecture will ensure more equitable and feasible ESG disclosure standards.

Responsibility: SEBI, MCA

6. Institutionalise governance and accountability by—

• defining separate and graduated BRSR penalties and consequences for failure to comply;
• introducing phased mandatory assurance starting with high-impact metrics (e.g., GHG emissions, water intensity usage intensity, and safety data) and expanding over time to cover all key metrics; and
• mandating board-level ESG committees and requiring them to sign off on the BRSR compliance reports.

In addition to the positive incentives to comply, the effectiveness of the BRSR framework and the credibility of the disclosures lie in accountability and enforcement. Board-level governance and verification mechanisms will ensure data ownership and strategic alignment, while enforcing proportionate penalties and assurance requirements will strengthen market discipline and investor confidence.

Responsibility: SEBI, MCA

Disclosure-Level Recommendations

7. Issue clarificatory and interpretative guidance notes.

Develop official guidance for complex and ambiguous BRSR questions and include investor use cases for easy comprehension, like the ISSB (IFRS S1 and S2)—for example, BRSR amendments to clarify “the highest authority responsible for implementation and oversight of the Business Responsibility policy(ies)”, Scope 3 estimation, and the nature of human rights data.

Many companies struggle with scattered disclosure requirements and vague definitions, resulting in inconsistent and incomplete reporting. Excessive flexibility through open-ended discretionary disclosures creates ambiguity for both companies and regulators, ultimately undermining compliance and comparability. A 2024 report^[18] by the Indian Institute of Management Ahmedabad indicates that companies are less willing to report non-mandatory disclosures, such as leadership indicators, and their non-adherence to the prescribed BRSR format impacts the quality of data available to the intended stakeholders. Consolidating guidance and structuring disclosures coherently will make BRSR easier to interpret, enhance data quality, and improve reporting consistency—a persistent issue in BRSR compliance. The specific clarifications needed on this front should ideally be identified from discussions or inputs submitted by the companies.

Responsibility: SEBI

8. Develop a ‘BRSR Companion Guide’ for integrated transition planning.

Align disclosure sequencing with transition pathways to consolidate these elements into one transition plan guidance document. This can be done by linking identified risks and opportunities with the relevant metrics and targets and ultimately connecting these with the company’s business strategy and financial performance.

While the BRSR has disclosure requirements that align with an ideal transition plan, these are scattered in the current format and difficult to connect, especially since companies are not required to disclose their transition plans—for example, reporting on environmental and social risks and opportunities for their business, steps to address them, and policies covering environmental and social metrics under the nine NGBRC principles. Investors need integrated visibility of how ambition, strategy, and financial alignment converge, as opposed to fragmented static indicators. This integration will also improve investor usability and increase BRSR interoperability with other standards like the ISSB. As regulators worldwide are mandating disclosure of climate transition plans, the BRSR should gradually phase in the disclosure of detailed transition plans.

Responsibility: SEBI

9. Develop sector-specific templates and benchmarks.

Sector-specific templates, like those in ISSB (IFRS S2), with quantitative data and risk descriptions, as well as governance elements relevant for specific industries, should be used as the baseline. These templates should include tailored KPIs, emission baselines, and net-zero pathways. Further, standardised sectoral benchmarks should be established to enable peer comparability and internal goal setting.

The current sector-agnostic BRSR framework leads to irrelevant disclosures, complicates the reporting process for companies, and is not decision-useful for the end-users of the data. Sector-specific templates will help align reporting with material issues, improve data utility for investors, and help companies interpret and contextualise their own performance.

Responsibility: SEBI

10. Take a more holistic and long-term approach to value chain reporting:

• Undertake stakeholder consultations to clearly determine the scope, KPIs and feasibility of value chain reporting, and integrate this into reporting requirements rather than keeping it open-ended.
• Indicate upfront how the approach to phased mandatory value chain reporting is expected to evolve.
• Launch an ESG Capacity Accelerator Program (jointly by SEBI-MCA-industry) for MSMEs by leveraging large corporates as anchor trainers and provide easy-to-use, pre-filled ESG templates linked to government incentive schemes (e.g., Z Scheme, credit guarantees).

Currently, ESG disclosures for value chain reporting apply to the top 250 listed companies on a voluntary basis (from a previously ‘comply-or-explain’ stance), and limited assurance is also voluntary from FY 2025-26. This is intended to ease the burden on both reporting entities and MSMEs in the value chain. Given this objective, the recommendations listed above will help companies and MSMEs adequately prepare and comply effectively. While some capacity-building initiatives for MSMEs are being undertaken—for instance, by IICA—MSMEs, bereft of the necessary resources and an enabling ecosystem, may not consistently report quality ESG data unless they are incentivised to do so. A structured, incentive-based support framework can build capacity while ensuring data inclusion through cluster-level aggregation and proxy validation. This will enable supply-chain integration without overburdening smaller firms. The proportional approach suggested in Recommendation 5 above must be adopted in doing this.

Responsibility: SEBI, MCA, Ministry of MSMEs, Industry Associations

11. Mandate group-level reporting for BRSR disclosures to increase interoperability with global standards, or mandate that there be no reporting boundary between financial reporting and sustainability reporting.

Currently, under the BRSR, the reporting boundary is to be determined by the company and disclosed to SEBI. Variations in the Indian companies’ reporting boundaries in financial and non-financial disclosures (consolidated group level vs. standalone entity level) create consistency and comparability issues. Consider taking an approach similar to the ISSB (IFRS S1), where there is no reporting boundary between financial statements and sustainability disclosures.

Shifting towards consolidated, group-level sustainability reporting would align Indian companies with global standards and enhance investor confidence. This, in turn, will create a valuable data and compliance repository for SEBI, much like regulators in other jurisdictions.

Responsibility: SEBI

Conclusion

With increased applicability of the BRSR, the need for alignment and interoperability becomes critical, especially as more countries are adopting ISSB and GRI standards and investor expectations converge around certain disclosure norms. BRSR must therefore recognise that, despite enhancements, it remains only partially interoperable with international standards. As a result, the companies, especially those seeking foreign investments or having global presence, will have to continue dual reporting and prioritise ISSB and GRI over BRSR, resulting in merely compliance-driven, inadequate submissions to SEBI.

The degree of interoperability will ultimately determine the quality and credibility of the BRSR data. Since this data is valuable for policymaking, investor confidence, and systemic assessment, establishing a robust feedback loop between market participants and SEBI is essential to strengthen this link. A balance must be struck between domestic priorities, market feasibility, and evolving international trends, and the above recommendations outlined above should be assessed in this context.

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Lavanya Mani is Fellow, ORF.

Ajay Tyagi is Distinguished Fellow, ORF.

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All views expressed in this publication are solely those of the authors, and do not represent the Observer Research Foundation, either in its entirety or its officials and personnel.

Endnotes

^[a] In New Delhi, on 9 October 2025.

^[1]Michael Bondar et al., “How Can the Enterprise Earn Investor Trust Through Sustainability Disclosures?,” Deloitte, March 12, 2024.

^[2]Securities and Exchange Board of India, “Business Responsibility and Sustainability Reporting by Listed Entities,” May 10, 2021.

^[3]Securities and Exchange Board of India, “SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” September 8, 2025.

^[4]Ministry of Corporate Affairs (Indian Institute of Corporate Affairs), “National Guidelines for Responsible Business Conduct,".

^[5]Securities and Exchange Board of India, “Circular No.: SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122,” July 12, 2023.

^[6]Amit Garg et al., “Analysis and Insights From ESG Disclosures Submitted by 1012 Indian Businesses under BRSR Guidelines,” Indian Institute of Management Ahmedabad, 2025.

^[7] European Commission, “Corporate Sustainability Reporting Directive”. 

^[8]European Commission, “European Sustainability Reporting Standards”.

^[9]Liza McAndrew Moberg et al., “ISSB Update,” IFRS Staff Paper Agenda Reference 5, November 4, 2025.

^[10]Jennifer Shulman, “Key Global Trends in Sustainability Reporting,” KPMG, 2022.

^[11]International Financial Reporting Standards, “Climate Disclosure Standards Board”.

^[12]Financial Stability Board, “Task Force on Climate-Related Financial Disclosures”.

^[13]Sustainability Accounting Standards Board, “SASB Standards”.

^[14]IFRS Foundation, “Integrated Reporting Framework".

^[15]Qiyu Zhang et al., “The Effects of Mandatory ESG Disclosure on Price Discovery Efficiency Around the World,” Science Direct, October 2023.

^[16]KPMG, “How to Determine Where ESG Can Create Value,” 2022.

^[17]Team Lease RegTech, “Decoding Compliance for Manufacturing MSMEs in India,” 2025.

^[18]Garg et al., “Analysis and Insights from ESG Disclosures Submitted by 1012 Indian Businesses under BRSR Guidelines”

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