SEBI’s BRSR Mandate: How ESG Disclosure Became a Legal Obligation for Indian Corporates

By Apalka Bareja and Ritvik Kashyap

Introduction

Environmental, Social, and Governance (ESG) parameters have swiftly emerged as critical non-financial indicators that influence corporate performance, investor decisions, and stakeholder trust. Globally, businesses are being held accountable not just for their profits but also for their environmental footprint, social impact, and governance frameworks. India, too, has joined this global movement with a regulatory push ushered in by the Securities and Exchange Board of India (SEBI) through the introduction of the Business Responsibility and Sustainability Reporting (BRSR) framework. What began as voluntary reporting on social responsibility has now transformed into a structured, enforceable ESG disclosure regime. The BRSR mandate marks a significant evolution in the way Indian companies are expected to operate—with transparency, accountability, and sustainability at the core.

What is ESG?

Environmental, Social, and Governance (ESG) represents a framework that enables businesses to operate responsibly across three critical dimensions:

• Environmental: Measures how companies manage their ecological footprint—covering areas such as greenhouse gas emissions, energy and water consumption, pollution control, biodiversity conservation, and waste management.
• Social: Examines how businesses treat their employees, customers, and surrounding communities. Key focus areas include labour practices, workplace safety, diversity and inclusion, customer relations, and community engagement.
• Governance: Assesses the company’s internal control mechanisms, including board independence, ethical leadership, anti-corruption policies, transparency, and accountability structures.

Investors and regulators now demand that companies integrate these considerations into their operations and strategy—not only to comply with the law but also to build long-term, sustainable growth.

India’s ESG Evolution: From Voluntary to Mandatory

India’s ESG journey has evolved significantly over the last decade. What started as voluntary guidance has gradually transitioned into a regulatory mandate:

1. 2009–2011: The Ministry of Corporate Affairs (MCA) issued Voluntary Guidelines on Corporate Social Responsibility in 2009[1], which evolved into the National Voluntary Guidelines (NVGs) in 2011, embedding principles of responsible business conduct.
2. 2012–2019: SEBI’s Initial ESG Push[2]
   • In 2012, SEBI introduced Business Responsibility Reporting (BRR) for the top 100 listed entities.
   • This threshold was expanded to 500 companies in 2015 and to the top 1,000 by 2019.
3. 2021: Introduction of BRSR[3]
   • SEBI replaced the BRR with the Business Responsibility and Sustainability Report (BRSR) a comprehensive framework requiring listed entities to report on ESG indicators from FY 2022–23 onward.
   • Unlike BRR, BRSR introduces quantitative key performance indicators (KPIs), enabling better comparability, standardisation, and verification of ESG practices.
4. 2023: BRSR Core Framework[4]
   • In July 2023, SEBI launched the BRSR Core, a subset of disclosures requiring reasonable assurance from third parties.
   • It mandates disclosure on parameters such as greenhouse gas emissions, water and energy consumption, median wages, and job creation.
   • Initially applicable to the top 150 listed entities, this requirement now extends to the top 1,000 listed companies.

This regulatory trajectory clearly shows India’s commitment to embedding ESG at the heart of corporate governance.

SEBI’s BRSR Mandate: Implications for ESG Compliance and Investor Confidence

The BRSR regime introduced by SEBI is not merely an additional reporting burden it is a strategic shift that reshapes how Indian companies present themselves to the world.

• Regulatory Enforcement: ESG disclosure has now become a statutory requirement for India’s top 1,000 listed companies. Non-compliance may attract regulatory consequences or raise red flags among investors and stakeholders.
• Investor Communication: With investors increasingly factoring in ESG performance before making decisions, the BRSR helps companies offer standardised, credible, and comparable data to the market.
• Operational Accountability: Companies are being forced to establish internal ESG frameworks, develop tracking mechanisms, and institutionalise sustainability into day-to-day operations.
• Public Scrutiny: Companies are now more visible to civil society, regulators, and watchdogs when it comes to their ESG conduct. Disclosures are accessible and can shape public perception and brand credibility.

From Voluntary CSR to Mandatory ESG

The enactment of CSR under Section 135 of the Companies Act, 2013, made India a global pioneer in mandating corporate responsibility spending. However, CSR remained limited in scope, often centred on donations and community development without mandatory disclosure of impact.

ESG, on the other hand, demands a deeper institutional commitment requiring companies to reconfigure how they assess risk, create value, and communicate outcomes. While CSR tells the story of how a company gives back, ESG evaluates how a company does business, including how it impacts the environment, treats people, and manages ethical responsibilities.

The transition from voluntary CSR to mandatory ESG is not just a legal shift, it represents a cultural and operational transformation.

Conclusion

SEBI’s BRSR mandate represents a turning point in India’s corporate regulatory framework. By making ESG disclosure a statutory requirement, the regulator has firmly embedded sustainability, ethics, and transparency into the fabric of corporate governance. Businesses that embrace this shift will not only meet compliance standards but also position themselves as future-ready enterprises trusted by investors, regulators, and the wider community.

As global investment trends increasingly favour responsible and transparent businesses, Indian corporates must view ESG not merely as a disclosure obligation, but as a strategic pillar for enduring growth and resilience.

[1] Available at: https://www.nfcg.in/pdf/CSR_Voluntary_Guidelines_2009.pdf

[2] Available at: https://www.sebi.gov.in/legal/circulars/aug-2012/business-responsibility-reports_23245.html

[3] Available at: https://www.sebi.gov.in/legal/circulars/may-2021/business-responsibility-and-sustainability-reporting-by-listed-entities_50096.html

[4] Available at: https://www.sebi.gov.in/legal/circulars/jul-2023/brsr-core-framework-for-assurance-and-esg-disclosures-for-value-chain_73854.html