Executive Summary:
The Ministry of Corporate Affairs (MCA) addressed questions regarding ESG norms, the Business Responsibility and Sustainability Report (BRSR), and greenwashing. While BRSR is not mandatory for non-listed companies, SEBI has introduced BRSR Core with Key Performance Indicators (KPIs) and assurance assessments for listed entities based on a phased implementation. The ministry is also running capacity building programs for MSMEs on sustainability compliance.
Key Points / Main Content:
* **BRSR Mandate and Guidelines:**
* BRSR is mandatory for the top 1000 listed companies by market capitalization since FY 2022-23.
* Remaining listed entities, including those on the SME Exchange, may voluntarily disclose the BRSR.
* BRSR allows for interoperability with internationally accepted reporting frameworks, allowing cross-referencing.
* **Mitigating Greenwashing:**
* SEBI introduced BRSR Core with critical KPIs requiring assurance assessment.
* BRSR Core assurance assessment will follow a phased approach.
* Top 150 listed entities from FY 2023-24.
* Top 250 listed entities from FY 2024-25.
* Top 500 listed entities from FY 2025-26.
* Top 1000 listed entities from FY 2026-27.
* Voluntary ESG disclosures for the value chain of top 250 listed entities from FY 2025-26, with voluntary assurance from FY 2026-27.
* SEBI prescribed guidelines to prevent greenwashing for green debt securities, including third-party review.
* Industry Standards Forum (ISF) formulated industry standards on BRSR Core in December 2024.
* ESG disclosures for the value chain introduced for the top 250 listed entities on a comply-or-explain basis from FY 2024-25 with limited assurance applicable on a comply-or-explain basis from FY 2025-26.
* **Capacity Building for SMEs:**
* The Ministry of MSME is running capacity building programs under the RAMP scheme.
* These programs focus on ESG compliance for MSMEs, Industry Associations, and State Government officials.
Impact Analysis:
* **Listed Companies:**
* Impact: Required to make ESG disclosures as per the BRSR framework. Phased implementation of BRSR Core with assurance assessment. Potential voluntary ESG disclosures for the value chain.
* Action Required: Prepare for mandatory BRSR reporting. Implement BRSR Core KPIs and assurance assessments according to the specified timeline. Evaluate and implement voluntary value chain ESG disclosures.
* **Non-Listed Companies:**
* Impact: No mandatory BRSR reporting requirement.
* Action Required: No action required unless they choose to voluntarily disclose BRSR.
* **MSMEs:**
* Impact: Access to capacity building programs and workshops on ESG compliance through the RAMP scheme.
* Action Required: Participate in available capacity building programs to improve ESG practices and compliance.
* **SEBI:**
* Impact: Responsible for monitoring and regulating ESG disclosures and preventing greenwashing.
* Action Required: Enforce BRSR Core requirements and green debt security guidelines.
* **Industry Associations (ASSOCHAM, CII, FICCI):**
* Impact: Involved in formulating industry standards for BRSR Core through the ISF.
* Action Required: Support implementation of BRSR Core standards and promote adoption among members.
Key Entities Referenced
Business Responsibility and Sustainability Report (BRSR): A reporting framework mandated by SEBI for ESG disclosures by listed companies in India.
Securities and Exchange Board of India (SEBI): The regulatory body for securities and commodity market in India, responsible for mandating and overseeing ESG disclosures.
National Guidelines on Responsible Business Conduct (NGRBCs): Revised principles released by MCA in March 2019, which were revised from the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business NVGs.
BRSR Core: A limited set of critical core Key Performance Indicators (KPIs) within the BRSR framework, for which listed entities need to obtain assurance assessments.
ASSOCHAM: One of the three industry associations, along with CII and FICCI, that comprise the Industry Standards Forum (ISF).
CII: One of the three industry associations, along with ASSOCHAM and FICCI, that comprise the Industry Standards Forum (ISF).
FICCI: One of the three industry associations, along with ASSOCHAM and CII, that comprise the Industry Standards Forum (ISF).
Raising and Accelerating MSME Performance (RAMP): A World Bank-supported Central Sector Scheme implemented by the Ministry of MSME to build capacity for MSMEs in Environmental, Social and Governance compliance.
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
LOK SABHA
UNSTARRED QUESTION NO. 1267
ANSWERED ON MONDAY, July 28, 2025/Sravana 6, 1947 (Saka)
STEPS TO ALIGN ESG NORMS WITH GLOBAL NETWORK
QUESTION
1267. SHRI AMRINDER SINGH RAJA WARRING:
Will the Minister of CORPORATE AFFAIRS be pleased to state:
(a) whether the Government plans to make BRSR (Business Responsibility and
Sustainability Report) mandatory for non-listed companies above a threshold turnover;
(b) the steps being taken by the Government to align India’s ESG norms with global
frameworks like ISSB or EU-CSRD;
(c) the mechanisms put in place to monitor greenwashing in corporate ESG
disclosures; and
(d) whether the Government has launched capacity-building programmes for SMEs on
sustainability compliance;
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) & (b) No Sir. The National Voluntary Guidelines on Social, Environmental and
Economic Responsibilities of Business’ (NVGs) were revised by MCA and new
principles called the National Guidelines on Responsible Business Conduct (NGRBCs)
were released in March, 2019. Subsequently, the Ministry of Corporate Affairs (MCA)
constituted a Committee on Business Responsibility Reporting, of which SEBI was a
member, for finalizing sustainability reporting formats, based on the framework of the
NGRBCs. Based on the recommendations of the Committee, extensive stakeholder
consultation, in 2021, SEBI mandated the top 1000 listed companies (by market
capitalization) to make ESG disclosures as per the Business Responsibility and
Sustainability Reporting (BRSR) from FY 2021-22 on a voluntary basis and mandatorily
from FY 2022 - 23. The remaining listed entities, including the entities which listed
their specified securities on the SME Exchange, may voluntarily disclose the Business
Responsibility and Sustainability Report. The Committee, in its report, had inter-alia
taken note of international reporting frameworks as well as global trends in
sustainability reporting. At the same time, needs of India’s specific socio-economic
and environmental challenges were kept in mind while formulating BRSR and therefore
BRSR allows for inter-operability with internationally accepted reporting frameworks
i.e. those listed entities which prepare and disclose sustainability reports (as part of
annual report) based on internationally accepted reporting frameworks can cross-
reference the disclosures made under such framework to the disclosures sought under
the BRSR. Further, in case the data sought in the reporting format is already disclosed
in the annual report, the listed entity can provide a cross-reference to the same.
Contd….2/-2-
(c) In order to mitigate risks of greenwashing, vide circulars dated July 12, 2023 and
March 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), top 250 listed entities (from FY 2024-25), top 500
listed entities (from FY 2025-26) and applicable to the top 1000 listed entities from 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.
SEBI vide (i) circular dated February 03, 2023 prescribed certain dos and don’ts that
an issuer of green debt security must ensure to avoid the occurrence of greenwashing
and (ii) circular dated February 06, 2023, inter-alia, specified appointment of a third
party reviewer/ certifier for a green debt security for post-issue management of the use
of proceeds from the green debt security and verification of the internal tracking and
impact reporting. The said requirement of appointing a third party reviewer/ certifier is
applicable on a ‘comply or explain’ basis for a period of two years from April 01, 2023.
These provisions are now incorporated in Chapter IX-A and Chapter IX respectively of
the Master Circular for issue and listing of Non-convertible Securities, Securitised Debt
Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper
dated May 22, 2024.
Furthermore, in December 2024, Industry standards on BRSR Core have been
formulated by the Industry Standards Forum (“ISF”) comprising of representatives from
three industry associations, viz. ASSOCHAM, CII and FICCI, under the aegis of the
Stock Exchanges, in consultation with SEBI. The standards aim to facilitate effective
implementation of the disclosure requirements under BRSR Core, promote ease of
doing business and bring about standardization in implementation of BRSR Core.
Moreover, to increase transparency, as per BRSR Core, ESG disclosures for the value
chain have been introduced for the top 250 listed entities (by market capitalization),
on a comply-or-explain basis from FY 2024-25. The limited assurance of the same shall
be applicable on a comply-or-explain basis from FY 2025 - 26.
(d) The Ministry of MSME implements the World-Bank supported Central Sector Scheme
“Raising and Accelerating MSME Performance” (RAMP). Under the aegis of this
scheme, capacity building programmes and workshops are being organized for MSMEs,
Industry Associations, State Government officials and other stakeholders in
Environmental, Social and Governance compliance. State/UT Governments have also
been provided grants under RAMP for conducting ESG Workshops.
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