The Global Reporting Initiative (GRI), the world's most widely used sustainability reporting framework, continues to demonstrate strong growth despite market consolidation pressures. According to Eco-Business, four out of five of the largest companies globally report using GRI, with the framework serving companies in more than 100 countries. GRI CEO Robin Hodess emphasizes that "companies are not going to be reporting less" in the future, citing the general shift towards more regulation and mandatory reporting requirements. The framework has evolved to complement the growing focus on financial materiality, with GRI's mission remaining focused on impact reporting that examines how organizations impact the world. Hodess notes that "what you commit to and what you're accountable for help drive behaviour" - a principle that supports continued sustainability reporting commitment.
India's ESG regulatory landscape has undergone significant transformation, with the Supreme Court declaring environmental protection a core component of CSR in 2025, marking a landmark legal precedent. According to the latest analysis from Bharati Vidyapeeth Deemed University, this ruling represents a crucial milestone in integrating environmental considerations into corporate social responsibility requirements. The concept of Environmental, Social and Governance (ESG) has rapidly transformed corporate law and practice in India, with the regulatory framework evolving from the Companies Act 2013 CSR provisions to recent SEBI and MCA regulations. This legal evolution demonstrates the judicial system's recognition of ESG's importance in corporate governance and sustainability reporting.
India's Business Responsibility and Sustainability Reporting (BRSR) framework, made compulsory for listed companies from 2022-23, positions the country as a pioneer in mandatory ESG disclosures. According to reports from Business Standard, this initiative was implemented five years ago in 2021, with the European Union following suit only in 2024-25. The framework was further strengthened by the introduction of BRSR Core in 2023, which prescribed third-party assessment of key performance indicators, enhancing the credibility of the scheme. Environmental, social and governance (ESG)-related issues are gaining increasing importance globally, with the BRSR guidelines needing to be constantly reviewed in line with global developments to maintain their relevance for stakeholders.
The current BRSR guidelines mandate disclosures under nine ESG categories with sector-agnostic reporting templates. As reported by Business Standard, these templates may result in information overload or deficiency of relevant, sector-specific information. The regulator could utilize the National Industrial Classification to categorize different sectors while prescribing sector-specific templates, ensuring that disclosure requirements are tailored to industry-specific needs rather than applying standardized templates across all sectors. Surely, the templates for a thermal power plant can't be similar to that of an IT industry, with the existing guidelines allowing companies to report 'not applicable' under columns that are not relevant to them.
The current disclosure regime lacks benchmarking capabilities, making it difficult to assess absolute company performance. According to the analysis in Business Standard, disclosures under various parameters could be compared with benchmarks prescribed by government or regulators for different activities. This would provide stakeholders with a more meaningful framework for evaluating corporate ESG performance across sectors and activities. The disclosure regime helps stakeholders compare companies operating in the same sector, making it more useful if disclosures under various parameters could also be compared with benchmarks prescribed by the government or regulators for different activities.
The government has established ambitious ESG targets including reducing emission intensity of GDP by 45% by 2030 from 2005 levels and achieving net-zero greenhouse gas emissions by 2070. As reported by Business Standard, these milestones require disaggregation across different activities and sectors, with clear expectations from corporations regarding their contributions toward these commitments. The government needs to figure out the contributions it expects from corporations toward meeting these commitments and aspirations. Some sectoral GHG emission targets have recently been fixed for hard-to-abate sectors under the Carbon Credit Trading Scheme (CCTS), with companies in the covered sectors required to clearly disclose their performance vis-à-vis those targets. Going forward, specific targets should also be fixed for other parameters such as water-use intensity and the proportion of renewables in total energy consumption.
The current BRSR coverage is limited to the top 1,000 listed firms, with the analysis suggesting that criteria need to be reconsidered to include more GHG-emitting industries. According to Business Standard, categorisation based on market capitalisation may not achieve the desired purpose, as some of the most GHG-emitting industries could be outside the cohort of the top 1,000 listed companies. Many large companies whose ESG disclosures would be highly relevant prefer to remain unlisted. The BRSR coverage needs to go beyond the top 1,000 listed firms, with the inclusion of micro, small and medium enterprises requiring a more gradual approach with capacity building and hand-holding support. They would need to be covered under a lighter version of the regulations, say, BRSR-Lite. Over the past few years, the sustainability reporting standards developed by the International Sustainability Standards Board have been largely accepted globally, with more and more jurisdictions moving towards adopting them. We should set a roadmap to align BRSR with these standards, with valid and convincing arguments to satisfy international investors if local conditions require exceptions under certain parameters.
