Okay, I'm ready to analyze the provided policy text and generate the requested report.
**Report on Sustainability Disclosure Policy Enhancements**
**1. Executive Summary:**
This report analyzes a policy speech by Shri Amarjeet Singh, WTM, SEBI, focusing on biodiversity and sustainability disclosures, particularly in the context of corporate reporting. The core purpose is to highlight the increasing importance of biodiversity considerations for businesses, detail SEBI's initiatives in sustainability disclosures including nature-related reporting (BRSR), and emphasize the critical role of Chartered Accountants in assuring the credibility of these disclosures. The key findings indicate a move towards more quantifiable and outcome-oriented sustainability reporting, incorporating nature-related risks, dependencies, and impacts, with a phased approach to assurance and value chain considerations. Recent changes ease requirements regarding value chain disclosures, making them voluntary instead of mandatory.
**2. Introduction:**
This report aims to provide a comprehensive overview of SEBI's policy direction regarding sustainability and biodiversity disclosures, based on the provided speaking notes. It outlines the key aspects of this direction, focusing on the rationale, components, and implications for affected stakeholders, particularly those in the corporate sector.
**3. Policy Overview:**
* **Core Objective(s):** The core objectives, as inferred from the text, are:
* To increase corporate awareness and action regarding biodiversity-related risks and opportunities.
* To enhance the quality and credibility of sustainability disclosures, including nature-related aspects.
* To align domestic ESG reporting frameworks with international standards while addressing unique domestic challenges.
* To foster a more sustainable and responsible business environment through improved transparency and accountability.
**4. Background and Rationale:**
The speech highlights the growing recognition of the interdependency between business and biodiversity. While climate change has received significant attention, the policy aims to address the comparative lack of focus on biodiversity-related issues, despite their significant impact on the global economy. The rationale is to encourage companies to understand and mitigate their impact on ecosystems, recognizing that biodiversity loss poses material financial risks and that current environmental, social, and governance (ESG) reporting standards are not consistently addressing the issue. The recent amendment to value chain disclosure requirements suggests a pragmatic approach, balancing the desire for comprehensive reporting with the practical challenges faced by companies. The shift to voluntary reporting may aim to encourage broader initial adoption while gathering further data and experience.
**5. Key Provisions / Changes:**
This document discusses changes to the Business Responsibility and Sustainability Report (BRSR). The key change relates to the value chain disclosures:
* **Specific Part of Policy Changed:** The section related to value chain disclosures within the BRSR framework.
* **New Rule/Provision:** The disclosure requirement for value chains is now *voluntary* instead of *comply-or-explain*. The scope of the value chain disclosure is also reduced to cover top upstream and downstream partners of a listed entity, comprising 2 or more of the listed entity's purchases and sales by value, respectively. Listed entities may limit disclosure of value chain to cover 75 of its purchases and sales by value, respectively.
* **Difference/Effect of Change:** This change eases the burden on listed companies by removing the mandatory aspect of value chain disclosures. Companies now have the discretion to decide whether and to what extent they disclose information about their value chain's sustainability performance. It potentially reduces the volume of reported data but may also lead to less comprehensive transparency regarding the broader environmental and social impacts of a company's operations.
**6. Target Audience and Stakeholders:**
The primary target audience is listed companies in India, specifically the top 1000 by market capitalization, as they are mandated to file the BRSR. Other stakeholders include:
* Investors: As they rely on sustainability disclosures for investment decisions.
* ESG Rating Providers: Who use the information to assess companies' sustainability performance.
* Chartered Accountants: Who are expected to play a crucial role in assuring the credibility of the disclosures.
* Regulators (SEBI): Responsible for overseeing and enforcing the disclosure requirements.
* The Ministry of Environment, Forest and Climate Change: Whose Green Credit Programme is referenced.
**7. Implementation Aspects (Inferred):**
* **Responsible agency/bodies:** SEBI is the primary responsible body for implementing and overseeing the BRSR framework. ICAI (Institute of Chartered Accountants of India) is expected to play a role in capacity building and guiding the accounting profession.
* **Timelines or procedures:** The BRSR is applicable to the top 1000 listed entities. Assurance requirements for BRSR Core are being implemented through a glide path. The voluntary indicator on green credits is applicable for BRSR filed for FY 2024-25 onwards.
* **Amendment-Specific Implementation:** Companies now have the flexibility to decide on the scope and extent of their value chain disclosures, based on their assessment of materiality and feasibility.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcome of the changes to the value chain disclosure requirements is:
* **Increased Adoption:** By making value chain reporting voluntary and reducing the scope, more companies may be willing to engage in some level of disclosure, leading to a broader understanding of sustainability issues across value chains.
* **Improved Focus:** Companies can prioritize the most material aspects of their value chain, leading to more relevant and impactful disclosures.
* **Reduced Compliance Burden:** The shift to voluntary reporting reduces the burden on companies, potentially freeing up resources for other sustainability initiatives.
**9. Conclusion:**
SEBI's policy direction, as articulated in the speech, emphasizes the increasing importance of biodiversity and nature-related considerations in corporate sustainability reporting. The BRSR framework, with its focus on quantifiable metrics and outcome-oriented disclosures, represents a significant step towards a more transparent and accountable business environment. The recent amendment making value chain disclosures voluntary reflects a pragmatic approach, balancing the need for comprehensive reporting with the practical realities faced by businesses. The role of Chartered Accountants in assuring the credibility of these disclosures is crucial for building trust and ensuring the effectiveness of the framework.
Key Entities Referenced
Shri Amarjeet Singh: WTM (Whole Time Member), SEBI (Securities and Exchange Board of India)
WTM: Whole Time Member, referring to a role at SEBI
SEBI: Securities and Exchange Board of India, a regulatory body
ICAI: Institute of Chartered Accountants of India, the organizer of the event
United Nations Global Compact Network India: UNGC Network India UNGCNI, co-organizer of the event
UNGCNI: United Nations Global Compact Network India, co-organizer of the event
May 24, 2025: Date of the event
COP15: 15th Conference of the Parties to the Convention on Biological Diversity in Montreal in December 2022
KunmingMontreal Global Biodiversity Framework: A framework adopted by nearly 200 countries, including India, outlining 23 global targets related to biodiversity
India: Country that adopted the KunmingMontreal Global Biodiversity Framework
National Biodiversity Strategy and Action Plan: NBSAP, updated plan by India explicitly calling on companies to disclose their risks, dependencies, and impacts on biodiversity
NBSAP: National Biodiversity Strategy and Action Plan, updated plan by India explicitly calling on companies to disclose their risks, dependencies, and impacts on biodiversity
Taskforce on Naturerelated Financial Disclosures: TNFD, an organization that has developed a set of disclosure recommendations and guidance for nature-related dependencies, impacts, risks and opportunities.
TNFD: Taskforce on Naturerelated Financial Disclosures, an organization that has developed a set of disclosure recommendations and guidance for nature-related dependencies, impacts, risks and opportunities.
International Sustainability Standards Board: ISSB, researching sustainabilityrelated risks and opportunities associated with biodiversity, ecosystems and ecosystem services
ISSB: International Sustainability Standards Board, researching sustainabilityrelated risks and opportunities associated with biodiversity, ecosystems and ecosystem services
BEES: Biodiversity, ecosystems and ecosystem services, researched by the ISSB
Business Responsibility Reporting: BRR, a mandatory reporting requirement introduced by SEBI in 2012 for top companies
BRR: Business Responsibility Reporting, a mandatory reporting requirement introduced by SEBI in 2012 for top companies
Business Responsibility and Sustainability Report: BRSR, a new framework for ESG reporting prescribed by SEBI in 2021
BRSR: Business Responsibility and Sustainability Report, a new framework for ESG reporting prescribed by SEBI in 2021
ESG: Environmental, Social, and Governance factors
TCFD: Task Force on Climate-related Financial Disclosures, an international framework
GRI: Global Reporting Initiative, an international framework
Green Credit Programme: A program of the Ministry of Environment, Forest and Climate Change related to green credits
Ministry of Environment, Forest and Climate Change: Indian governmental organization related to the Green Credit Programme
BRSR Core: A select set of metrics in the BRSR for which assurance requirements were introduced by SEBI in July 2023
International Auditing and Assurance Standards Board: IAASB, a global standardsetter that has stepped in with sustainabilityspecific assurance
IAASB: International Auditing and Assurance Standards Board, a global standardsetter that has stepped in with sustainabilityspecific assurance
International Ethics Standards Board for Accountants: IESBA, a global standardsetter that has stepped in with sustainabilityspecific ethical standards
IESBA: International Ethics Standards Board for Accountants, a global standardsetter that has stepped in with sustainabilityspecific ethical standards
Speaking Notes of Shri Amarjeet Singh, WTM, SEBI at the Programme on
Biodiversity & Business in Harmony (Roles and Opportunities for Chartered
Accountants)
Organized by ICAI and United Nations Global Compact Network India (UNGCNI)
May 24, 2025
1. Good afternoon. It is a pleasure to be part of this event. I thank ICAI for inviting me.
2. I appreciate the organizers’ efforts in hosting this program and bringing much-
needed attention to biodiversity related issues. The past few years have seen
increased awareness around climate change, driven by efforts from governments,
investors and regulators. Biodiversity and nature-related issues have however,
received comparatively less global attention despite the fact that as per some
estimates1, 50% of the global economy is dependent on biodiversity. The theme of
this event (biodiversity and business in harmony) underscores that growth and
ecological responsibility are not mutually exclusive goals — they must move in
tandem if we are to build a sustainable future.
3. In my address today, I would like to (i) first, touch upon why biodiversity matters for
corporates and some of the global developments, particularly in the area of
disclosures, (ii) secondly, I will share the work done by SEBI in the area of
sustainability disclosures, including nature-related reporting and (iii) finally, I will talk
about assurance of sustainability disclosures and the role of Chartered Accountants.
A. Why biodiversity matters for corporates
4. Companies across sectors rely heavily on biodiversity for essential resources such
as water, raw materials, fertile soil, and pollination. These dependencies can create
risks within operations and supply chains. For example, critical global supply chains
— from agribusiness to semiconductors — can face disruptions due to water
1 https://www.weforum.org/stories/2023/02/biodiversity-nature-loss-
cop15/#:~:text=The%20report%20delivers%20a%20stark,on%20nature%20and%20its%20services%E2%80%9Dshortages and water stress. Similarly, the degradation of forests can pose a serious
threat to the long-term availability and security of key commodities and natural
resources that certain industries depend on.
5. At the same time, corporate activities can also adversely impact ecosystems —
through pollution, deforestation, land use change, and overextraction of natural
resources. Such impacts can accelerate biodiversity loss, further compounding the
risks to business continuity and resilience. Recognizing these growing risks and
dependencies, the global community has begun to respond.
B. Global developments
6. At the 15th Conference of the Parties to the Convention on Biological
Diversity COP15 in Montreal in December 2022, nearly 200 countries, including
India, adopted the Kunming-Montreal Global Biodiversity Framework. It outlines 23
global targets, including the 30x30 goal — to conserve at least 30% of the planet’s
land and ocean by 2030.
7. Target 15 of this framework — and also India’s updated National Biodiversity
Strategy and Action Plan (NBSAP) — explicitly calls on large and transnational
companies and financial institutions to disclose their risks, dependencies, and
impacts on biodiversity. This includes reporting on business operations, supply
chains, value chains, and portfolios. The framework therefore recognizes
that biodiversity is no longer just an environmental issue — it is a material financial
issue.
8. Reporting on biodiversity however poses challenges. Biodiversity is multifaceted,
covering aspects such as land, water, oceans, atmosphere. There is no universal
indicator of risk exposure like greenhouse gas (GHG) emissions for climate
reporting. Biodiversity-related risks are localised, further adding to the challenge of
data availability and aggregation.9. In this context, the Taskforce on Nature-related Financial Disclosures (TNFD) has
developed a set of disclosure recommendations and guidance that can enable
business to assess, report and act on their nature-related dependencies, impacts,
risks and opportunities.
10. As part of its work plan, the International Sustainability Standards Board (ISSB) is
researching sustainability-related risks and opportunities associated with
biodiversity, ecosystems and ecosystem services (BEES). As per the initial findings,
published by ISSB –
The market is still in early stages of assessing and understanding effects of
BEES-related risks and opportunities on an entity’s prospects.
Companies commonly disclose information on water, pollution and waste,
however information on other topics such as species, land-use change,
resource use and extraction are far less common and consistent.
11. To my mind, we are still in the early stages of building a decision-useful biodiversity
reporting ecosystem. The foundations are however being laid.
C. BRSR and nature related disclosures
12. Let me now turn to the work done by SEBI in the area of sustainability disclosures,
including nature-related reporting.
13. As many of you would be aware, SEBI’s journey in sustainability disclosures started
way back in 2012 when it introduced a mandatory Business Responsibility Reporting
(BRR) for top 100 companies. Let me fast forward to 2021, when SEBI prescribed
a new framework for ESG reporting, called the Business Responsibility and
Sustainability Report or BRSR.14. The BRSR was a notable departure from the BRR. The BRR was more of a light
touch regime while BRSR is more focused on having quantifiable metrics and is
more outcome oriented.
15. It is a home-grown framework, tailored to our unique domestic requirements and
aligned with our national priorities. While developing the framework, we were
cognizant that emerging markets have a different set of environmental & social
challenges. Therefore, we have consciously followed a climate plus approach that
includes reporting on quantitative social metrics. At the same time, we had also
conducted a benchmarking exercise with the then available international
frameworks such as TCFD and GRI; and there are a number of commonalities
between these frameworks and the BRSR. The BRSR is applicable to the top 1000
listed entities (by market capitalisation) on a mandatory basis.
16. Key nature related disclosures
a. In addition to disclosure of sustainability related risks, opportunities and targets,
the BRSR includes key nature related disclosures on air pollutants, water, waste
generated and waste management practices, operations in ecologically sensitive
areas etc.
b. More recently, we have added a leadership (voluntary) indicator on green credits
that have been generated or procured (under the Green Credit Programme of the
Ministry of Environment, Forest and Climate Change) by the listed entity or its top
102 value chain partners. This is applicable for BRSR filed for FY 2024 – 25
onwards.
2 In terms of value of purchases and salesD. BRSR Core – Assurance and Value chain disclosures
17. We are mindful that transparency without credibility can be counterproductive. With
a number of stakeholders such as investors and ESG Rating Providers placing
reliance on the disclosures in the BRSR, and concerns around green-washing being
raised globally, in July 2023, we introduced assurance requirements for a select set
of metrics in the BRSR, called the BRSR Core.
18. A glide path, in terms of timelines and applicability to listed entities, has been
prescribed for implementation of assurance requirements.
19. Given that a number of companies have significant sustainability footprints such as
the use of natural resources, employment practices, emissions and wastages in
their value chain, disclosures as per the BRSR Core were also extended to the value
chain of listed companies.
20. We have recently eased the disclosure requirements with regard to ESG disclosures
for the value chain:
We have made the disclosure “voluntary”, instead of the earlier
requirement of ‘comply-and-explain’
We have also reduced the scope of value chain to cover the top
upstream and downstream partners of a listed entity, individually comprising
2% or more of the listed entity's purchases and sales (by value),
respectively, while retaining the requirement that the listed entity may limit
disclosure of value chain to cover 75% of its purchases and sales (by value),
respectively.E. Role of Chartered Accountants
21. As sustainability reporting evolves, both in the mandatory and voluntary space, the
role of Chartered Accountants is important in assuring sustainability-related
information, and upholding their integrity.
22. While a profession agnostic approach to sustainability assurance is being advocated
globally, there is no doubt that Chartered Accountants, long regarded as custodians
of financial integrity, are well placed to contribute meaningfully to this field. The
ability to understand financial statements equips them to assess the linkages
between sustainability-related risks and financial performance. Having said that,
sustainability assurance is inherently multidisciplinary, and its successful
implementation will require collaboration across a range of skill sets.
23. I would also urge the profession to be mindful of the ethical considerations and
challenges, associated with sustainability assurance. Ensuring the credibility of such
disclosures demands careful attention to issues like conflicts of interest,
confidentiality, objectivity, and the consistent application of professional skepticism.
In this context, it is encouraging to note that global standard-setters,
the International Auditing and Assurance Standards Board (IAASB) and
the International Ethics Standards Board for Accountants (IESBA) have stepped in
with sustainability-specific assurance and ethical standards to help guide the
profession.
24. Of course, standards alone are never enough. As new disclosure frameworks, and
standards emerge, one of the most critical challenges will be capacity building.
Successful implementation of these frameworks depends on the availability of
trained professionals who understand both financial and environmental
dimensions of sustainability. This is where institutions like ICAI can play a pivotal
role by guiding the profession and fostering greater discourse, education, and
preparedness across the ecosystem.F. Concluding Remarks
25. Ultimately, our goal is a future where sustainability is woven into the fabric of our
financial systems. This will be a collective journey and a number of stakeholders –
investors, companies, regulators, and civil society - will have to coordinate and
collaborate in the shift towards more informed capital markets, and more inclusive
and sustainable economies, that better serve our environment and society.
I am confident that the profession will rise to the occasion and play a defining role
in this transition — not just as technical experts, but as ethical leaders and agents
of change.
Thank You !