ESG GUIDELINES AND WAY FORWARD FOR INDIAN CORPORATES

Environmental, Social, and Governance (ESG) criteria serve as a framework for assessing a company's sustainability and ethical practices across three essential dimensions: environmental stewardship, social responsibility, and governance integrity.

- Mr. Adeeb K T

As global environmental and social challenges intensify, investors and stakeholders increasingly demand that businesses adopt responsible practices, making the effective integration of ESG principles vital for enduring success. Indian businesses are becoming acutely aware of the reputational risks associated with insufficient ESG performance. In response to evaluations by international rating agencies regarding these risks, Indian firms are motivated to enhance their sustainability efforts, progressing beyond simple compliance to align themselves with global sustainability objectives.

Sustainability Reporting in India: A Chronology of Regulations

2009: The Ministry of Corporate Affairs (MCA) introduces the “Voluntary Guidelines on Corporate Social Responsibility.”

2011: The MCA releases the “National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business 2011,” establishing a reporting framework.

2012: The Securities and Exchange Board of India (SEBI) mandates that the top 100 listed companies by market capitalization submit a Business Responsibility Report (BRR).

2016: The BRR filing requirement is extended to cover the top 500 listed companies.

2017: A SEBI circular recommends voluntary adoption of integrated reporting by the top 500 companies beginning FY2018.

March 2019: The updated NVGs are issued as the “National Guidelines for Responsible Business Conduct.”

December 2019: SEBI expands BRR requirements to the top 1000 listed companies starting in 2020.

2021: The Business Responsibility and Sustainability Reporting (BRSR) framework is introduced for the top 1000 companies, transitioning from voluntary to mandatory status in FY2023.

2023: SEBI unveils BRSR Core, which will apply to the top 150 listed companies from FY2024 onwards.

SEBI’s 2023 ESG Reporting Guidelines: The BRSR Format