In 2023, the Securities and Exchange Board of India (SEBI) introduced a new mandate requiring disclosures and assurance for the value chain of listed entities as per the Business Responsibility and Sustainability Reporting (BRSR) Core. The regulatory expansion shifts corporate accountability beyond direct operations to encompass intricate supplier networks. Companies in India must now scrutinize their entire supply chain, demanding auditable ESG data from external stakeholders, a level of oversight uncommon in global mandatory reporting frameworks.
Companies have increasingly reported on ESG metrics, but the SEBI BRSR Core mandate now demands auditable 'reasonable assurance' and deep value chain scrutiny. Many corporate governance structures are not yet equipped to provide this. The new requirement elevates ESG reporting from a qualitative exercise to a quantitative, verifiable standard, creating tension between existing capabilities and stringent new regulatory expectations.
Indian listed entities face a multi-year, phased transformation of their ESG data management and board oversight. The multi-year, phased transformation will likely separate those with genuine sustainability integration from those with only performative efforts. The mandate compels a re-evaluation of ESG assurance and risk management for corporate boards by 2026, forcing a shift towards deeply embedded, auditable frameworks rather than mere compliance.
The New Mandate: From Voluntary to Verifiable
The SEBI BRSR Core mandate fundamentally redefines corporate ESG reporting in India. It shifts focus from voluntary disclosures to mandatory, auditable data, specifically requiring reasonable assurance on 9 key ESG attributes, according to Glocert International. The SEBI BRSR Core mandate departs from earlier, less rigorous standards, compelling robust internal controls and data collection. SEBI's phased approach requires the top 1000 listed entities to obtain this assurance progressively, as stated by Uniqus. Reasonable assurance demands independent verification, extending beyond data aggregation to the reliability of underlying systems, especially for the value chain. By narrowing the focus to 9 core attributes, SEBI aims for concentrated effort on impactful, auditable areas, driving tangible governance changes and integrating ESG into core risk management.
The Scale of the Shift: Numbers and Timeline
- 9 — key ESG attributes are mandated for reasonable assurance under the BRSR Core, according to Glocert International. These attributes form the core of the new auditable reporting framework.
- 150 — companies, specifically the top listed entities, were initially subject to BRSR Core applicability in FY 2023-24, according to Glocert International. This marks the beginning of a multi-year phased implementation.
- 1000 — companies, comprising the top listed entities, will be required to comply with BRSR Core by FY 2026-27, according to Glocert International. The expansion to 1000 companies demonstrates the broad reach of the mandate across India's corporate sector.
- 130+ — disclosure items are contained within the full BRSR framework, according to Glocert International, illustrating the comprehensive nature of the broader reporting requirements from which the BRSR Core subset is derived.
The phased rollout of the BRSR Core, starting with 150 companies and expanding to 1000 by FY 2026-27, signals a systemic, long-term transformation for a significant portion of India's listed economy. The phased rollout allows companies time to build internal capabilities, but also creates a clear compliance timeline. The focus on a select 9 attributes for reasonable assurance, out of over 130 potential disclosure items in the full BRSR framework, indicates SEBI's strategic prioritization. The focus on a select 9 attributes ensures critical ESG aspects are rigorously verified, driving focused, effective governance change rather than overwhelming companies with exhaustive, unauditable disclosures. The cumulative effect points to robust ESG assurance becoming a standard expectation for India's largest corporations by the end of 2026.
Boardroom Readiness: Who's Ahead, Who's Behind
American Tower's board of directors prioritizes ESG programs and processes, exemplifying a proactive approach to corporate sustainability oversight. American Tower's board of directors' emphasis extends to integrating ESG metrics into executive incentives, with the Compensation Committee incorporating individual ESG metrics into the short-term incentive program for executives in 2022, according to Nareit. Such integration directly links executive performance to ESG outcomes, fostering accountability at the highest levels.
In 2021, American Tower established a Global Sustainability Committee (GSC) to implement its sustainability strategy, as reported by Nareit. The Global Sustainability Committee (GSC) ensures ESG objectives are systematically pursued and embedded within operational strategies. Companies with such sophisticated governance structures, where ESG oversight is deeply integrated within board committees and executive incentives, are demonstrably better positioned to meet the rigorous demands of the BRSR Core mandate. Their existing frameworks for data collection, risk management, and accountability provide a significant advantage.
Conversely, Indian companies that have historically treated ESG as a mere compliance checkbox or a public relations exercise, lacking robust internal controls and auditable data systems, will face significant challenges. The BRSR Core's requirement for reasonable assurance across the value chain, particularly on the 9 key ESG attributes, necessitates a complete overhaul of their governance and data infrastructure. The BRSR Core's requirement creates a clear distinction between proactive corporations that embed sustainability into their strategic DNA and those that must now rapidly build these capabilities under regulatory pressure, indicating a potential competitive disadvantage for the latter group by 2026.
The Road Ahead: Challenges and Opportunities
The BRSR Core's demand for 'reasonable assurance' on 9 key ESG attributes, particularly across the value chain, signifies a fundamental shift from voluntary, qualitative reporting to mandatory, auditable data collection. The BRSR Core's demand for 'reasonable assurance' exceeds typical global expectations, compelling significant investment in ESG data infrastructure, expertise, and internal controls. Companies must develop systems to gather auditable data from direct operations and their entire supply chain, a complex undertaking requiring new technologies and collaboration. While leading global companies like American Tower have proactively embedded ESG into executive compensation and board-level oversight, the BRSR Core will compel all top Indian listed entities to rapidly develop similar, auditable governance structures, regardless of their current maturity. Unprepared firms face substantial compliance hurdles, potential reputational damage, and increased operational costs as they scramble to build robust data and assurance frameworks by the 2026 deadline. By focusing on a subset of 9 critical ESG attributes, SEBI strategically targets the most impactful and auditable areas. The focus on a subset of 9 critical ESG attributes ensures a focused push towards fundamental governance change, creating a competitive disadvantage for those who delay internalizing these stringent requirements. Companies embracing this targeted approach early can optimize resources and position themselves as leaders in sustainable finance, attracting ESG-conscious capital.
What Boards Must Do Now
- Boards must establish clear, direct oversight for the 9 core ESG attributes required for reasonable assurance under the BRSR Core mandate.
- Implement robust internal controls and data collection systems capable of providing 'reasonable assurance' across the entire value chain, including third-party suppliers, by the phased deadlines.
- Integrate auditable ESG metrics into executive compensation structures by 2026 to align leadership incentives directly with compliance and sustainability performance outcomes.
By fiscal year 2026-27, the top 1000 Indian listed entities, including major players like Reliance Industries, will likely face significant penalties and reputational damage if their board-level oversight and value chain data collection systems are not fully auditable under the BRSR Core mandate.
