BRSR Compliance for the Top 1000 Listed Entities and their Value Chain Partners

February 13, 2025

Introduced by SEBI in 2021, the Business Responsibility and Sustainability Reporting (BRSR) framework aims to enhance transparency and promote sustainability among businesses. It is mandated for the top 1,000 listed companies by market capitalization. SEBI has revised the current requirements under BRSR for these listed entities and their value chain partners, requiring companies to incorporate these updates into their reporting processes. In December 2024, to promote ease of doing business for listed entities and their value chain partners, the Board approved measures related to BRSR requirements, including ESG disclosures, their assurance, and the introduction of voluntary green credit disclosures.

Deferral of ESG Disclosures: ESG disclosures for the value chain will now apply from FY 2025-26, and “assessment or assurance” will be applicable from FY 2026-27.
Voluntary ESG Disclosures: ESG disclosures for the value chain will now be “voluntary”, replacing the current “comply-or-explain” requirement. This is understood to be valid for the current year of reporting.
Reduced Scope of Value Chain: The scope of value chain reporting has been reduced to include only the top upstream and downstream partners of a listed entity, each constituting 2% or more of the entity's purchases and sales (by value). Additionally, listed entities can limit value chain disclosures to cover 75% of their total purchases and sales (by value).
Optional Previous Year Reporting: Reporting of previous year numbers will be voluntary in case of first year of reporting of ESG disclosures for value chain.
Green Credit Leadership Indicator: A new leadership indicator under Principle 6 of BRSR has been introduced, requiring disclosure of Green Credits generated or procured by the listed entity and its top 10 value chain partners.
Assessment or Assurance: The term "assurance" in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, regarding BRSR, has been replaced with "assessment or assurance”. The "assessment" will involve a third-party evaluation based on standards developed by the Industry Standards Forum (ISF) in consultation with SEBI. This will apply to BRSR Core disclosures for listed entities starting from FY 2024-25 and for value chain disclosures from FY 2026-27.

The revised requirements under the BRSR framework offer companies enhanced flexibility in fulfilling ESG reporting requirements. The extended timelines provide companies with additional time to engage with value chain partners, gather necessary information, explain the importance of sharing this data, and provide training to ensure a clear understanding of the requirements. By integrating the revised timelines, businesses can better align their sustainability initiatives with evolving standards, promoting greater accountability and transparency over time. To gain a better understanding of the challenges and solutions in BRSR, read our blog: /brsr-for-value-chain-compliance-and-implementation/

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