Non-financial reporting has gained global significance as businesses recognize their impact on the environment, society, and governance (ESG). This shift has encouraged companies to adopt more sustainable business models, ensuring greater transparency and accountability. Several international institutions, such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD), have developed standardized formats for ESG disclosures. India, too, has progressively strengthened its ESG reporting framework through various guidelines and mandates.
National Voluntary Guidelines (NVG) – 2011
The Ministry of Corporate Affairs (MCA) introduced the National Voluntary Guidelines (NVGs) on Social, Environmental, and Economic Responsibilities of Business in July 2011. These guidelines provided a framework based on nine principles, helping Indian businesses integrate responsible business conduct into their operations.
Introduction of Business Responsibility Reporting (BRR) – 2012
Following the release of the NVGs, the Securities and Exchange Board of India (SEBI) made it mandatory for the top 100 listed companies to disclose non-financial data regarding their environmental and social responsibilities through Business Responsibility Reports (BRR). These disclosures were required to be included in the companies’ annual reports, ensuring transparency for stakeholders.
Agenda for Sustainable Development – 2015
In 2015, the United Nations General Assembly adopted the 2030 Agenda for Sustainable Development, establishing 17 Sustainable Development Goals (SDGs). This agenda provided a structured framework for countries and businesses to align their sustainability efforts with global objectives.
Expansion of BRR – 2015
To enhance corporate accountability, SEBI expanded the BRR mandate to cover the top 500 listed companies by market capitalization from FY 2015-16 onwards. This move aimed to strengthen sustainability reporting and improve responsible business practices.
National Guidelines on Responsible Business Conduct (NGRBC) – 2019
In 2019, the MCA introduced the National Guidelines on Responsible Business Conduct (NGRBC : https://www.mca.gov.in/Ministry/pdf/NationalGuildeline_15032019.pdf), an updated version of the NVGs. The NGRBC incorporated evolving national and international sustainability standards, encouraging companies to go beyond regulatory compliance and adopt responsible business conduct.
Further Expansion of BRR – 2019
SEBI further expanded the scope of BRR, making it mandatory for the top 1000 listed companies to publish BRRs as part of their annual reports, increasing transparency and corporate accountability.
Introduction of Business Responsibility and Sustainability Reporting (BRSR) – 2021
In May 2021, SEBI replaced BRR with a more comprehensive Business Responsibility and Sustainability Reporting (BRSR) framework. This new reporting structure required the top 1000 listed companies to disclose their sustainability performance from FY 2022-23 onwards, ensuring greater alignment with global ESG standards.
BRSR Core – 2023
SEBI introduced the BRSR Core in 2023 to enhance the credibility and comparability of ESG disclosures. The BRSR Core is a subset of the broader BRSR Reporting framework, focusing on key performance indicators (KPIs) across nine ESG attributes. It includes new KPIs tailored to the Indian market, such as job creation in small towns and gender-based wage disparities. Additionally, intensity ratios adjusted for Purchasing Power Parity (PPP) were introduced for better global comparability.
To support these enhancements, SEBI amended the Listing Obligations and Disclosure Requirements (LODR) Regulations, reinforcing ESG reporting obligations for listed entities. The introduction of BRSR Core ensures more standardized and verifiable ESG data, aiding investors and stakeholders in making informed decisions.
Conclusion
The evolution of ESG reporting in India has been marked by a progressive strengthening of regulations, aligning corporate sustainability efforts with global best practices. From voluntary guidelines to mandatory reporting structures, India has steadily enhanced its non-financial disclosure framework. The introduction of BRSR and BRSR Core demonstrates a commitment to transparency, accountability, and sustainable business practices. As ESG considerations continue to shape investment and regulatory landscapes, Indian businesses must adapt and embrace these evolving standards to remain competitive and responsible in the global market.