Executive Summary:
The Ministry of Corporate Affairs addresses questions regarding ESG reforms following NCRBC 2025. The document clarifies that NCRBC is for dialogue and knowledge exchange, not policymaking. It highlights the integration of ESG principles into the Companies Act, 2013, and SEBI's mandate for Business Responsibility and Sustainability Reporting (BRSR) for listed companies, including the phased implementation of BRSR Core and value chain disclosures.
Key Points / Main Content:
* **NCRBC Purpose and Follow-up:**
* NCRBC is an annual event by IICA for multi-stakeholder dialogue, knowledge exchange, and capacity building on responsible business practices.
* NCRBC aims to foster a shared understanding of good practices and is not a policymaking or regulatory forum.
* No formal follow-up mechanism is required by the Government as a result of NCRBC.
* **ESG Integration in Companies Act, 2013:**
* The essence of ESG is embedded in the Companies Act, 2013, aligning corporate conduct with sustainability and ethical standards.
* Key aspects promoting ESG include disclosures on energy conservation, appointment of women directors, maternity benefits, duties of directors, and corporate social responsibility.
* Boards of companies are responsible for compliance with applicable disclosures required under the Act and rules.
* **SEBI's BRSR Mandate:**
* SEBI initially mandated Business Responsibility Reporting (BRR) based on NVGs for the top 500 listed companies by market capitalization since 2012, later increased to the top 1000.
* Companies voluntarily submitted BRSR for FY 2021-22 and mandatorily from FY 2022-23 onwards.
* BRSR Core, containing critical Key Performance Indicators (KPIs), was introduced via circulars dated July 12, 2023, and March 28, 2025.
* Assurance assessment for BRSR Core is required as per a phased approach, starting with the top 150 listed entities from FY 2023-24 and applicable to the top 1000 by FY 2026-27.
* ESG disclosures for the value chain of top 250 listed entities are voluntary from FY 2025-26, with voluntary assurance assessments from FY 2026-27.
Impact Analysis:
* **Listed Companies (Top 1000):**
* Impact: Must comply with mandatory BRSR, and phased BRSR Core with assurance assessments by FY 2026-27
* Action Required: Prepare and disclose BRSR annually, obtain assurance assessments for BRSR Core as per the specified timeline.
* **Listed Companies (Top 250):**
* Impact: Voluntary ESG disclosures for the value chain from FY 2025-26.
* Action Required: Consider voluntary ESG disclosures for their value chain and assurance assessments.
* **Company Boards:**
* Impact: Responsible for ensuring compliance with ESG-related disclosures as per the Companies Act, 2013.
* Action Required: Ensure compliance with disclosures related to energy conservation, women directors, maternity benefits, CSR, and other relevant clauses.
* **IICA:**
* Impact: Responsible for organizing NCRBC as a platform for dialogue and knowledge exchange.
* Action Required: Continue to organize NCRBC annually to facilitate discussions on responsible business practices.
Key Entities Referenced
Ministry of Corporate Affairs: A ministry in the Government of India responsible for corporate affairs.
NCRBC, 2025: National Conference on Responsible Business Conduct held in 2025; a forum for discussions on ESG reforms.
EU's Corporate Sustainability Due Diligence Directive CSDDD: A European Union directive focused on corporate sustainability due diligence.
Companies Act, 2013: An act of the Parliament of India that regulates Indian companies on various aspects including ESG.
National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business NVGs: Guidelines released in 2011 to promote business responsibility and sustainability.
National Guidelines for Responsible Business Conduct NGRBC: Upgraded and updated version of NVGs in 2019, providing guidelines for responsible business conduct.
Securities and Exchange Board of India SEBI: The regulator of the securities market in India, which mandates ESG disclosures for listed companies.
Business Responsibility and Sustainability Reporting BRSR: A reporting framework mandated by SEBI for listed companies to disclose their ESG performance.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 221
ANSWERED ON MONDAY, July 21, 2025/Ashadha 30, 1947 (Saka)
ESG REFORMS
QUESTION
221. Shri Vijayakumar Alias Vijay Vasanth:
Shri Suresh Kumar Shetkar:
Shri Manickam Tagore B:
Will the Minister of CORPORATE AFFAIRS be pleased to state:
(a) the follow-up mechanisms put in place by the Government to ensure that
discussions at NCRBC, 2025 lead to binding ESG reforms and are not limited to
voluntary industry participation;
(b) whether the Government is supporting Indian MSMEs and exporters in meeting
international ESG standards such as the EU’s Corporate Sustainability Due Diligence
Directive (CSDDD), especially to safeguard market access and if so, the details thereof;
(c) the current status of ESG adoption in public sector enterprises and the way by
which the Government is ensuring transparency and accountability in their
sustainability disclosures;
(d) whether the Government shares any concrete regulatory or policy outcomes
expected from NCRBC 2025, particularly in areas like BRSR alignment, green finance
and workforce transition; and
(e) the way by which the global partners like UNICEF and ILO actively participate in
order to incorporate their recommendations into national ESG policy frameworks,
especially for inclusive employment and supply chain due diligence?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF
STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS
[SHRI HARSH MALHOTRA]
(a) to (e) IICA is an autonomous body under the Ministry of Corporate Affairs (MCA),
mandated to undertake academic research, provide capacity building, and facilitate
advocacy in areas relating to corporate affairs and responsible business conduct. IICA
introduced its programme on responsible business conduct and consequently, it
organises the National Conference on Responsible Business Conduct (NCRBC) which
is an annual event to facilitate multi-stakeholder dialogue, knowledge exchange, and
capacity building on themes relating to responsible business practices. The
deliberations at the NCRBC aims at fostering a shared understanding of good practices
and encouraging academic enhancements in collective understanding of business
responsibility and the conference is not intended to serve as a policymaking or
regulatory forum, calling for putting in place a formal follow-up mechanism by the
Government.
Contd….2/-2-
Business Responsibility and Sustainability Reporting is an approach to drive an
organization’s commitment to sustainability which was first embedded in the National
Voluntary Guidelines on Social, Environmental and Economic Responsibilities of
Business (NVGs) released in 2011 and later incorporated in Companies Act, 2013,
which envisages wider responsibilities for a Company and its Directors beyond its
shareholders to its stakeholders - employees, community, and environment. In keeping
with global developments and domestic changes, the NVGs were upgraded and
updated as the National Guidelines for Responsible Business Conduct (NGRBC) in 2019.
The essence of Environmental, Social and Governance (ESG) is embedded in the
Companies Act, 2013, aligning corporate conduct with sustainability and ethical
standards. The key aspects of the Act that promote ESG principles can be found in
relevant clauses related to Director’s responsibility in their Board Report w.r.t
disclosures about energy conservation, appointment of women directors, disclosures
on maternity benefit, duties of directors, corporate social responsibility etc.
Furthermore, these disclosures are part of the financial statements and the Board of
the respective companies are responsible for compliance of applicable disclosures
which are required under the Act and rules made thereunder. For any policy formation,
the government consults all the stakeholders.
The Securities and Exchange Board of India (SEBI) had mandated top 500 listed
companies by market capitalisation to make disclosures on business responsibility and
sustainability indicators contained in the NVGs since 2012 through Business
Responsibility Reporting (BRRs) which were then later increased to the top 1000 listed
companies (by market capitalization) where these companies for the FY 2021-22 would
voluntarily submit the report on BRSR and mandatorily from FY 2022-23 onwards.
Subsequently, vide circulars dated July 12, 2023 and Mar 28, 2025, SEBI has introduced
BRSR Core, which contains a limited set of critical / core Key Performance Indicators
(KPIs), for which listed entities shall need to obtain assurance/ assessment, as per the
specified glide path beginning with the top 150 listed entities from FY 2023 – 24, and
applicable to the top 1000 listed entities by FY 2026 - 27. Further, SEBI has also
introduced ESG disclosures for the value chain of top 250 listed entities on a voluntary
basis from FY 2025 - 26 and assurance/assessment of the same on a voluntary basis
from FY 2026 - 27. These are applicable to both private and public sector companies.
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