INSITE - India- April 2025

SEBI Updates ESG Disclosure Norms Under LODR

Summary: The Securities and Exchange Board of India (SEBI) has revised its Listing Obligations and Disclosure Requirements (LODR)  regulations to enhance Environmental, Social, and Governance  (ESG) transparency. Key changes include voluntary green credit disclosures within the BRSR and the option for listed entities to choose between “assessment” or “assurance” for Business Responsibility and Sustainability Report (BRSR) core and value chain ESG reporting.

In Detail: In a significant step toward improving corporate sustainability reporting, SEBI has amended the LODR Regulations through circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/42, incorporating key updates to ESG disclosures. These amendments are based on recommendations from expert committees and extensive public consultations.

Below are the key highlights of the amendment:

1. Enhanced ESG Framework in BRSR

   
   

   • The amendments expand the BRSR framework by introducing voluntary disclosures related to green credits.

   • These disclosures aim to encourage listed companies to transparently report initiatives that generate or utilize green credits, supporting India’s broader climate and sustainability goals.

     
     

2. Flexibility in BRSR Core & Value Chain Disclosures

   
   

   • Listed entities can now choose between “assessment” or “assurance” for BRSR Core and value chain ESG disclosures, with the “assessment” to be conducted as per Industry Standards Forum (ISF) guidelines.

   • This dual option provides companies with flexibility in their sustainability journey while maintaining the integrity of disclosures.

     
     

3. Phased Implementation Timeline

   
   

   • The rollout of mandatory BRSR Core assessment/assurance will follow a staggered approach:

     
     

     (a) FY 2023-24: Top 150 listed companies

     (b) FY 2024-25: Top 250 companies

     (c) Gradually scaling to the top 1000 listed entities by FY 2026-27

     
     

4. Deferred Implementation for Value Chain Disclosures

   
   

   • ESG disclosures relating to an entity's value chain (suppliers and customers) have been deferred to allow better preparedness:

     
     

     (a) Voluntary disclosures to begin in FY 2025-26

     (b) Mandatory assessment/assurance from FY 2026-27

These value chain disclosures apply to partners that individually account for 2% or more of the entity’s total purchases or sales.

Objective and Impact

The updated ESG disclosure framework is designed to:

• Streamline compliance procedures for listed companies

• Provide enhanced flexibility while ensuring credible and transparent reporting

• Encourage broader participation in India’s sustainable development and climate goals

By enabling a gradual transition and offering dual options for BRSR Core and value chain ESG reporting, SEBI’s move is expected to strengthen India’s ESG ecosystem and align corporate disclosures with global best practices.

Key Links:  SEBI | Measures to facilitate ease of doing business with respect to framework for assurance or assessment, ESG disclosures for value chain, and introduction of voluntary disclosure on green credits