In FY 2026-27, Indian industries will confront a significant leap in corporate sustainability reporting. The Securities and Exchange Board of India (SEBI) is tightening its grip on Business Responsibility and Sustainability Reporting (BRSR), making assurance on key metrics and value chain reporting a core part of the mandate for a wider range of companies. This marks a shift from a voluntary, “comply-or-explain” framework to a more stringent, verifiable system. The top 1,000 listed entities will be required to get assurance on their BRSR Core disclosures, while the top 250 will be voluntarily disclosing ESG information for their value chains, with assurance becoming voluntary in the same year.

Navigating the Assurance Compulsion

The requirement for assurance on the BRSR Core—a subset of essential ESG metrics—is the most impactful change. This is aimed at enhancing the credibility of reported data and combating greenwashing.

• Expanded Scope: The mandate for assurance on BRSR Core disclosures will apply to the top 1,000 listed entities by market capitalization in FY 2026-27, a significant increase from the previous phased approach.
• Assurance vs. Assessment: In a key amendment, SEBI has offered flexibility by allowing companies to opt for a third-party assessment as an alternative to “reasonable assurance.” This change was made to address industry concerns about the high costs and logistical complexities, offering a more manageable option, especially for companies new to this level of reporting.
• New KPIs: The BRSR Core includes new metrics relevant to the Indian context, such as job creation in small towns and gross wages paid to women, alongside globally recognized indicators like GHG emissions and energy consumption. This ensures the framework is tailored to India’s unique socio-economic landscape.

This mandate is pushing companies to overhaul internal processes, data governance, and documentation to ensure reported data is reliable and can withstand scrutiny from external agencies.

The Evolving Landscape of Value Chain Reporting

Extending the BRSR framework to a company’s value chain is a pivotal step towards comprehensive sustainability. While still on a voluntary basis for disclosures and assurance in FY 2026-27, this move requires companies to look beyond their own operations.

• Voluntary Disclosures: For FY 2026-27, the top 250 listed entities are expected to voluntarily provide ESG disclosures for their value chain. This phased approach gives companies and their partners, particularly MSMEs, time to adapt.
• A New Definition: SEBI has simplified the value chain definition, specifying it includes the top upstream and downstream partners that individually comprise 2% or more of a listed entity’s purchases and sales by value. This is a significant change from the previous cumulative threshold, making the process more targeted and manageable.
• Voluntary Assurance: Starting this fiscal year, the assessment or assurance of these value chain disclosures will also be voluntary. Companies are responding by building capacity, engaging with their key suppliers, and investing in technology to streamline data collection from their vast networks.

Key Amendments under SEBI

These changes are part of broader amendments introduced by SEBI to facilitate ease of doing business and enhance the integrity of the BRSR framework.

• Green Credit Disclosure: A new leadership indicator has been added under BRSR’s Principle 6, requiring companies to disclose any Green Credits they have generated or procured. This aligns with the Indian government’s Green Credit Programme.
• Removal of “Comply or Explain”: SEBI has moved away from the “comply or explain” basis for value chain reporting, opting for a voluntary approach for disclosures and assurance. This change acknowledges the practical difficulties of collecting data from diverse and often informal value chain partners.
• Standardized Metrics: In collaboration with industry bodies, SEBI has developed standardized guidance for reporting on BRSR Core metrics. This aims to improve the comparability and quality of disclosures across different industries.

The transition to a more rigorous BRSR framework is not just a regulatory hurdle but an opportunity for Indian companies to align with global ESG standards, attract ESG-focused capital, and build long-term value. While challenges like data collection and cost remain, the proactive response from industries indicates a strong commitment to making sustainability a central part of their corporate identity.