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Regulatory update
India’s journey toward ESG and corporate sustainability has seen substantial growth over the last two decades, culminating in the launch of the Business Responsibility and Sustainability Report (BRSR) Core in 2023.
2009: Voluntary guidelines for CSR - In 2009, the Ministry of Corporate Affairs (MCA) introduced voluntary guidelines for Corporate Social Responsibility (CSR), focusing on key areas such as ethical business practices, worker welfare, human rights, environmental responsibility and inclusive social development.
2011: Revised National Voluntary Guidelines (NVG) - In 2011, the MCA revised these voluntary guidelines. The updated National Voluntary Guidelines (NVG) broadened the scope to include the social, environmental and economic responsibilities of businesses. This change established a foundation for a more comprehensive approach to corporate responsibility.
2013: Corporate Social Responsibility Act - In 2013, India made history by becoming the first country to enact a Corporate Social Responsibility Act, highlighting the role of businesses in promoting inclusive growth and equitable development.
2013: Business Responsibility Report (BRR) - In the same year, the Securities and Exchange Board of India (SEBI) mandated that the top 100 listed companies submit a Business Responsibility Report (BRR), inspired by the AA1000 standards on stakeholder engagement and accountability. This framework reinforced transparency and inclusivity in corporate governance.
2018: National Guidelines on Responsible Business Conduct (NGRBC) - By 2018, the BRR was revised into the National Guidelines on Responsible Business Conduct (NGRBC) to align with the United Nations Guiding Principles (UNGP) on business and human rights.
2021: Business Responsibility and Sustainability Report (BRSR) - In 2021, India made a significant leap in corporate governance by introducing the Business Responsibility and Sustainability Report (BRSR). The BRSR offers comprehensive disclosures on ESG issues, incorporating key elements from the Global Reporting Index (GRI) standards. This alignment with AA1000 and GRI standards empowers Indian companies to benchmark their ESG performance against international peers, enhancing transparency and accountability in reporting.
2023: BRSR Core- In 2023, the journey continued with the launch of BRSR Core, which expanded the scope to include value chain members and incorporated assurance processes. This updated framework emphasises critical areas such as job creation, business transparency, and fair wages, deeply integrating sustainability into corporate governance.
BRSR Core – ESG/Sustainability disclosures timeline
SEBI-mandated reporting timeline
The introduction of the ISSB and its subsequent release of IFRS S1 and S2 standards in 2023 marked a pivotal moment in sustainability reporting. In India, these principles are increasingly reflected in BRSR Core, which has become the country’s key reporting standard. BRSR Core integrates key elements of the GRI standards and aligns closely with the global objectives set by IFRS S1 and S2. By covering both financial and climate-related risks, BRSR Core ensures that Indian companies adhere to international best practices while addressing specific local ESG challenges.
Overall, the adoption of BRSR and its alignment with IFRS through BRSR Core is a testament to India's dedication to providing transparent disclosures that meet investor demands while contributing to the country’s broader sustainability goals.
Key market insights:
India is one of the countries most affected by extreme weather events resulting from climate change and rising temperatures. The country has submitted its long-term low-carbon development strategy to the United Nations Framework Convention on Climate Change (UNFCCC), reaffirming its goal of achieving net zero emissions by 2070 in line with the Paris Agreement.
To support this goal, India’s Nationally Determined Contributions (NDCs) aim to reduce greenhouse gas emissions and limit the global temperature rise. Achieving these targets will require a 70-fold increase in solar and wind installations, along with the necessary infrastructure to produce 114 million metric tonnes of green hydrogen annually. Electricity generation accounts for nearly half of India’s annual emissions, with the industrial sector consuming more than 40% of this electricity. Therefore, the industrial sector must play a significant role in India’s energy transition to meet its net zero target.
India has set ambitious goals for 2030, aiming to reduce carbon intensity by 45% and to achieve 500 GW of non-fossil energy capacity, including solar, wind, small hydro, and energy efficiency projects. The nation’s commitment to sustainability is closely linked to its environmental strategies, with relevant provisions included in the annual budget. Significant funding is being allocated for projects such as rail and metro transport, solar and wind energy, green hydrogen, forestry, electric mobility and charging infrastructure, and vehicle scrapping as part of a circular economy.
Industries are encouraged to adopt transformative technologies for decarbonisation, with many setting Science-Based Targets (SBTs) to align with international climate goals. SEBI mandates climate risk disclosures, showcasing the country’s innovative policies in the pursuit of a greener future. Recognising the importance of Scope 3 emissions, companies are encouraged to collaborate with suppliers to reduce their carbon footprints and promote the use of renewable energy throughout their value chains.
Circular economy
India is also transitioning to a circular economy, promoting resource efficiency and sustainable practices through various initiatives. The recent amendments to Extended Producer Responsibility (EPR) rules aim to strengthen recycling targets and enhance sustainable waste management.
The transition to green hydrogen represents a significant step toward achieving net zero emissions. India’s National Green Hydrogen Mission aims to produce substantial quantities of green hydrogen, positioning the country as a leader in this field. Heavy industries are increasingly investing in green hydrogen technology to lower emissions.
Industry
As India's construction market expands, there is an increasing adoption of green technologies to ensure that urban development remains sustainable and responsible. The government has mandated that all new government buildings meet green building standards, promoting sustainability across the sector.
In the realm of sustainable finance, the regulatory framework for green debt securities has evolved to align with global principles, reflecting a strong interest in green investments, particularly through green bonds.
Additionally, India has developed 109 high-yield, climate-resilient crop varieties. Under the sustainable agriculture initiative, approximately one crore (10 million) farmers are set to adopt natural farming practices, aided by the establishment of 10,000 bio-input resource centres.
Social sustainability is a critical aspect of India's transition, driven by a commitment to workforce well-being, diversity, and community engagement. Companies are increasingly focused on improving occupational safety, health, and environmental (SHE) standards to create safer workplaces and promote employee well-being, which is essential for long-term resilience.
Gender diversity is gaining significant momentum, with many organisations setting ambitious targets to increase the percentage of women in the workforce, particularly in leadership and board positions. This reflects a broader push toward inclusive corporate governance, ensuring that decision-making structures are more representative and equitable.
CSR continues to play a vital role in India's social development. Businesses are actively investing in community welfare programs that address key issues such as education, healthcare, and rural infrastructure. Initiatives such as the Skill India Mission and the National Apprenticeship Promotion Scheme are essential for empowering youth through skills development and enhancing employability, particularly in underserved regions. Furthermore, support for Micro, Small, and Medium Enterprises (MSMEs) remains a priority. Companies are encouraged to adopt responsible sourcing practices that ensure fair wages and labour rights within their supply chains.
This focus on ethical supply-chain management promotes social equity and strengthens the resilience of smaller enterprises, making them active participants in the sustainability agenda.
Transparency in governance is also crucial, as companies are expected to disclose their efforts toward improving human rights, labour relations and grievance mechanisms. This commitment to accountability not only strengthens stakeholder trust but also aligns India’s corporate practices with global standards for social sustainability.
Governance is a cornerstone of India’s sustainable development framework, emphasising transparency, accountability, and ethical corporate behaviour. Central to this framework is the BRSR which requires companies to create and disclose their policy framework and procedures related to ESG issues. This includes important areas such as ethical conduct, anti-corruption measures, stakeholder engagement, diversity and inclusion, gender equality and human rights throughout business operations and supply chain partners.
Additionally, companies are expected to provide transparent disclosures of their key performance indicators
The BRSR mirrors global reporting standards, integrating concepts from frameworks such as the GRI and the International Integrated Reporting Framework (IIRC). It specifies essential governance policies, including:
- Whistleblower Protection
- Anti-Corruption
- Code of Conduct
- Corporate Social Responsibility
- Human Rights
Together, these guide corporations toward practices that meet international expectations.
Companies are expected to provide detailed ESG-related information about their value chain, following the guidelines set out in the BRSR Core. This includes key upstream and downstream partners of the listed entity, which collectively account for at least 75% of their purchases or sales by value.
Companies are required to disclose ESG-related information pertaining to their value chain, following the guidelines set out in the BRSR Core. The value chain should encompass the principal upstream and downstream partners of the listed entity, which collectively account for 75 percent of its purchases or sales (by value).
The BRSR comprises three sections:
Section A: General disclosures about the company.
Section B: Details on policies, strategic goals, management practices, and processes.
Section C: Performance evaluations based on nine guiding principles for responsible business conduct.
According to these principles, businesses should:
- Conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable.
- Provide goods and services in a manner that is sustainable and safe.
- Promote the well-being of all employees, including those in their value chains.
- Respect the interests of and be responsive to all its stakeholders.
- Respect and promote human rights.
- Respect and make efforts to protect and restore the environment.
- When engaging in influencing public and regulatory policy, businesses should do so in a manner that is responsible and transparent.
- Promote inclusive growth and equitable development.
- Engage with and provide value to their consumers in a responsible manner.
The impact of greenwashing regulation in India
Between 2019 and 2022, India saw a significant rise in climate risk disclosures and net zero targets, aligning with trends observed in many other APAC countries. However, in 2023, there was a noticeable decline in both climate disclosures and net zero commitments within India.
In 2024, the Central Consumer Protection Authority (CCPA) released new Guidelines for the Prevention and Regulation of Greenwashing or Misleading Environmental Claims, following a comprehensive review conducted in 2023. These updated guidelines aim to combat deceptive practices where companies falsely advertise themselves as environmentally friendly, including claims regarding net zero products and targets.
This major update to the greenwashing guidelines may have contributed to the decline in disclosures, as 25% of companies that previously disclosed their climate claims chose to remove these statements from their annual reports and websites.
Mahesh Dalvi - Director, ESG & Sustainability, RSM India
