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Securities and Exchange Board of India’s Circular on Business Responsibility & Sustainability Report and ESG Disclosures

Fox & Mandal Securities and Exchange Board of India’s Circular on Business Responsibility & Sustainability Report and ESG Disclosures

Securities and Exchange Board of India’s Circular on Business Responsibility & Sustainability Report and ESG Disclosures


In an era where enterprises are regarded as vital components of the society, they are not merely accountable to their shareholders for the profits solely but to the society at large too, which is also a stakeholder. Thus, responsible business practices need to be applied keeping public interest in mind, specifically in the case of listed entities, as they hold huge amounts of funds received from the public.

With the growing impact of environmental, social and governance (hereinafter referred to as “ESG”) risks, and the need for assurance and expanding the scope of disclosures, Securities and Exchange Board of India (hereinafter referred to as “SEBI”) by way of a circular titled “BRSR core – Framework for assurance and ESG Disclosures for value chain”, dated 12 July 2023, has notified Business Responsibility and Sustainability Reporting (hereinafter referred to as “BRSR”) as well as ESG disclosures.

The BRSR as well as ESG disclosures were notified based on the recommendations of the ESG Advisory Committee (hereinafter referred to as the “EAC”) provided for in the Consultation Paper on ESG Disclosures, Ratings and Investing, released on 20 February 2023.


The following are the circulars and guidelines issued in regard to the exhaustive disclosures required to be made:

I. National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (July 2011): The Ministry of Corporate Affairs (hereinafter referred to as “MCA”) released the National Voluntary Guidelines (hereinafter called “NVGs”), which replaced the ‘Voluntary Guidelines on Corporate Social Responsibility’ released in 2009 by MCA. The NVGs laid down the basic requirements for businesses to function responsibly and were applicable on all businesses irrespective of their size, sector, or location as well as on micro, small and medium enterprises, with the reporting framework designed on an apply-or-explain basis. The NVGs were articulated in the form of nine principles (hereinafter referred to as “Principles”), which provided guidance to businesses as to what constitutes responsible business conduct.

II. SEBI Circular CIR/CFD/CMD/10/2015 Format for Business responsibility Report (BRR) (4 November 2015)

Introduction of BRR: The SEBI Circular of 2015 (hereinafter referred to as “2015 Circular”) mandated the Annual Report of the listed entity to contain a Business Responsibility Report (hereinafter referred to as “BRR”), which described the initiatives of the entity from an ESG perspective, with key principles for the assessment of fulfilment of ESG principles based on the principles as entailed in the NVGs.

The introduction of the 2015 Circular rescinded the SEBI Circular CIR/CFD/DIL/8/2012 released on 13 August 2012, on BRR, which mandated the BRR inclusion in the annual reports of top 100 listed entities based on market capitalization at Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE), while the rest of the listed entities could voluntarily disclose the same.

III. National Guidelines on Responsible Business Conduct (15 March 2019): MCA, in March 2019 released the National Guidelines on Responsible Business Conduct (hereinafter referred to as “NGRBCs”), which are a revision over the NVGs and better aligned with the Sustainable Development Goals and the ‘Respect’ Principle of the United Nations Guiding Principles. The NGRBCs are applicable on all businesses irrespective of their size, sector or location including multinational corporations. The NGRBCs take the requirement of reporting a step further by identifying specific aspects of each of its nine updated Principles as a part of the duty and responsibility of the business.

IV. SEBI Circular SEBI/HO/CFD/CMD-2/P/CIR/2021/562: Business responsibility and sustainability reporting by listed entities (10 May 2021)

Introduction of BRSR: The SEBI Circular of 2021 (hereinafter referred to as “2021 Circular”) introduced the reporting requirements on ESG parameters called the Business Responsibility and Sustainability Reporting (hereinafter referred to as “BRSR”), replacing the preceding BRR. The BRSR sought disclosures from entities based on the nine principles of the NGRBCs. Following the 2021 Circular, reporting under each Principle was divided into essential and leadership indicators, where the former was on a mandatory basis while the latter was on a voluntary basis.

Amendment in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as “LODR Regulations”): The 2021 Circular brought forth an amendment in Regulation 34(2)(f) of the LODR Regulations whereby a BRR outlining the listed entity’s actions from an ESG standpoint, in the format as occasionally defined by the Board, or the top 1,000 listed organisations based on market capitalization, was to be attached to the Annual Report, with the provision that after the financial year 2021–2022 the requirement to submit a BRR shall be eliminated, and starting with the financial year 2022–2023 the top 1,000 listed entities based on market capitalization shall submit a BRSR in the format as determined by the Board from time to time.

Applicability: The filing of BRSR was mandatory for the top 1000 listed companies (by market capitalisation) with effect from financial year 2022-23, while the filing was voluntary for the financial year 2021-22.

V. SEBI Circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122: BRSR Core – Framework for assurance and ESG disclosures for value chain (12 July 2023)

Introduction of BRSR Core: The Board through the SEBI Circular, released on 12 July 2023, (hereinafter referred to as “2023 Circular”), has introduced the BRSR Core, which is a subset of BRSR, that entails a set of Key Performance Indicators (hereinafter referred to as “KPIs”)/ metrics under 9 ESG Principles. The 2023 Circular has introduced new KPIs for assurances such as job creation. Further, intensity ratios based on revenue adjusted for Purchasing Power Parity have also been included. The 2023 Circular specifies the data and approach for reporting and assurance, as a base methodology, where any industry specific estimations must be disclosed.

ESG Disclosures for Value Chain: Disclosures for value chain must be made by the listed entity as per BRSR Core, in its Annual Report. Value Chain, as specified in the 2023 Circular, encompasses the top upstream and downstream partners of a listed entity, comprising cumulatively for 75% of purchases/sales (by value), respectively. For the same, KPIs for value chain to the extent it is attributable to the business with the said value chain partner must be reported, which may be separated for upstream and downstream partners or on an aggregate basis. The applicability of the same is from 2024-25.

Assurance Provider: The Board of the listed entity must ensure that the assurance provider of the BRSR Core has the necessary expertise for the reasonable assurance, and the entity has no conflict of interest with the assurance provider.

Amendment in the LODR Regulations: The 2023 Circular has brought forth an amendment in Regulation 34(2)(f) of the LODR Regulations whereby now a BRSR on ESG disclosures for the top 1,000 listed entities based on market capitalization, must be attached with the Annual Report, in the format that may occasionally be defined by the Board. Furthermore, the listed firms are required to disclose information and seek assurance in accordance with the BRSR Core for their value chain as of the date and in the manner that the Board may from time to time specify.

Applicability: The 2023 Circular has mandated top 1000 listed companies (by market capitalization) to make disclosures as per the BRSR format, as a part of their Annual Reports, where listed entities must mandatorily take reasonable assurance of the BRSR Core, as per the following table:

Financial Year Applicability of BRSR Core to top listed entities (by market capitalization)

2023 – 24 Top 150 listed entities
2024 – 25 Top 250 listed entities
2025 – 26 Top 500 listed entities
2026 – 27 Top 1000 listed entities

The 2023 Circular has applied ESG disclosures for the value chain to be mandatorily applicable on the top 250 listed entities (by market capitalization) on a comply-or-explain basis from financial year 2024-25, and the limited assurance of the same shall be applicable from financial year 2025-26, on a comply-or-explain basis.


In order to ensure proper reporting as limiting the cost of compliance, the 2023 Circular, introduced the reporting of disclosures in following BRSR format:

I. Section A: General Disclosures
1. Details of the listed entity: Corporate Identity Number (CIN), name, year of Incorporation, registered office address, corporate address, e-mail, telephone, website, financial year for which reporting is done, name of the Stock Exchange(s) where shares are listed, paid-up capital, contact details of the person to be contacted for BRSR report queries, and reporting boundaries;

2. Product/services: Details of the business activities, Products/services sold by entity accounting for 90% of the entity’s turnover;
3. Operations: Number of locations where plants/offices of the entity are situated, and markets that are served by the entity entailing details on location and customers;

4. Employees: Employee (including differently abled) details at the end of financial year, participation/inclusion/representation of women, and turnover rate for permanent employees and workers for past three years;

5. Details of Holding, Subsidiary and Associate Companies (including joint ventures);

6. CSR Applicability;

7. Transparency and Disclosures Compliances: Grievances on any principles under the NGRBCs, and the entity’s material responsible business conduct issues, if any.

II. Section B: Management and Process Disclosures

1. Policy and Management processes: The said disclosure entails details of whether the entity’s policies cover the principles and core elements of NGRBCs, whether the policies have been approved by the Boards, whether the policies have been translated to procedures, and whether such policies apply to the entity’s value chain partners. Along with this are disclosures pertaining to the names of national or international standards that have been adopted by the entity corroborating with each principle, specific commitments/goals of the entity with timelines to achieve the same, as well as performance of the entity against such specific commitments/goals;

2. Governance, leadership, and oversight: The said disclosure entails a statement by the Director responsible for the BRR, entailing ESG challenges/targets/achievements. Additionally, this disclosure contains details of the highest authority responsible for implementation of Business Responsibility policies, details of any specified Committee of Board/Director for decision making on sustainability related issues, if any, and details of any external agency conducting evaluation of such policies, if any, and an explanation if a said NGRBC principle is not covered under the entity’s policies.

III. Section C: Principle Wise Performance Disclosure – The said disclosure aims at assisting the entity in incorporating the principles.

1. Principle 1 – Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable.

2. Principle 2 – Business should provide goods and services in a manner that is sustainable and safe.

3. Principle 3 – Businesses should respect and promote the well-being of all employees, including those in their value chains.

4. Principle 4 – Business should respect the interests of and be responsive to all its stakeholders.

5. Principle 5 – Businesses should respect and promote human rights.

6. Principle 6 – Businesses should respect and make efforts to protect and restore the environment.

7. Principle 7 – Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.

8. Principle 8 – Businesses should promote inclusive growth and equitable development.

9. Principle 9 – Businesses should engage with and provide value to their consumers in a responsible manner.


The 2023 Circular issued by SEBI has thus paved way for greater transparency in reporting by entities and the inclusion of BRSR Core has made reporting easier for small and inexperienced entities, exhibiting SEBI’s dedication to ensure proper reporting by entities. The success and efficacy of ESG disclosures will ultimately be boosted through the implementation of the 2023 Circular that takes into account the diverse nature of businesses and value chain partners, enabling organisations to comply with the disclosure criteria.


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