SEBI panel proposes changes to BRSR framework

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A SEBI committee has suggested changes to the BRSR, or Business Responsibility and Sustainability Reporting, framework. 

ESG disclosures for the value chain will be applicable to the top 250 listed entities on a comply-or-explain basis from FY25. 

The committee felt the definition of ‘value chain’ needed to be rationalised to cover only significant partners. Accordingly, value chain partners would be redefined to include those upstream and downstream partners of a listed entity, individually comprising 2 per cent or more of the listed entity’s purchases or sales (by value), respectively.

For FY25, the first year of reporting ESG disclosures for the value chain, reporting previous year numbers will be voluntary.

Green Credits generated by the company and the value chain partners will be an additional leadership indicator added under BRSR. This is in light of the Ministry of Environment, Forest and Climate Change notification dated February 22. 

About BRSR, the term “assurance” will be substituted with “assessment or assurance”. This will provide flexibility to listed entities to undertake either assessment (which is cost-effective and not burdensome) or assurance (which may be requested by investors/clients of listed entities), said a SEBI circular on Wednesday. 

SEBI mandated the top 1,000 listed companies to file BRSR as part of their annual report from FY22-23 onwards. In 2023, it introduced the BRSR Core framework for assurance and ESG disclosures for the value chain. 

BRSR Core is a sub-set of the SEBI BRSR format. BRSR Core consists of several additional key performance indicators under nine ESG attributes.