sebi
Published on 16 July 2025
SEBI's New ESG Disclosure Regulations: Key Changes and Impacts for Companies
SEBI Softens ESG Rollout Timelines, Signals Long-Term Bet on Sustainable Governance
In a measured recalibration of India’s corporate sustainability roadmap, the Securities and Exchange Board of India (SEBI) has revised its ESG (Environmental, Social, Governance) disclosure norms—making them more flexible, more focused, and ultimately, more feasible for listed companies and their value chains.
The update, announced following SEBI’s December 18, 2023 board meeting, reflects a pragmatic shift: encouraging adoption over enforcement by giving companies the time and tools to build authentic ESG reporting frameworks, rather than rush into shallow compliance.
Key Revisions to BRSR Core: What’s Changed?
| Regulatory Area | Earlier Requirement | Revised Framework |
|---|---|---|
| Value Chain ESG Reporting | Mandatory from FY 2024–25 | Now voluntary until FY 2025–26 |
| Third-Party Review (“Assurance”) | Mandatory from FY 2025–26 | Deferred to FY 2026–27 |
| Scope of Value Chain Reporting | Broadly implied (all vendors/customers) | Limited to top 2% by purchase/sale value |
| Terminology | “Assurance” only | Now includes “Assessment” or “Assurance” |
These changes fall under SEBI’s BRSR Core reporting framework—India’s foundational ESG disclosure protocol for the top 1,000 listed companies by market capitalization.
From Rigid Compliance to Real ESG Maturity
The revised timelines mark a clear pivot. SEBI is no longer pushing companies to meet ESG targets at breakneck speed—it’s inviting them to lay the foundation for long-term, credible sustainability performance.
“This is not about relaxing the rules—it’s about creating a roadmap that more companies can realistically follow,” said Smitha Shetty, Regional Director at Achilles Information Ltd. “Companies that invest now in internal ESG readiness will have a competitive edge when the full regime kicks in.”
Why These Changes Matter: A Ground-Level View
Time to Build Real Capacity
New Start Dates:
- Value chain reporting: FY 2025–26
- “Assessment or Assurance”: FY 2026–27
Many companies, especially in manufacturing, logistics, and pharma, have ESG data that sits across HR, procurement, legal, and operational silos—not to mention the lack of visibility into supplier-level data.
“Accessing ESG data down the supply chain is one of the toughest reporting challenges globally,” said Dipankar Ghosh, Partner at BDO India. “The extra time allows for better systemisation—and fewer shortcuts.”
Refined Focus: Top 2% of Supply Chain
Instead of asking for ESG metrics across thousands of vendors or customers, SEBI has clarified that companies should focus only on the top 2% of value-chain partners by transaction value, covering:
- Up to 75% of total purchases
- Up to 75% of total sales
This targeted lens allows companies to prioritise relationships that truly move the needle—not get buried in administrative overload.
Assessment: A Cost-Conscious On-Ramp
SEBI’s decision to introduce “Assessment” as a formal alternative to third-party “Assurance” could be a game-changer, especially for mid-sized firms and first-time ESG reporters.
| Type | Description | Cost & Complexity |
|---|---|---|
| Assessment | Structured external review using SEBI-approved frameworks | Moderate |
| Assurance | Independent audit, akin to financial statement certification | High |
“Assessment opens the door to wider participation without compromising data integrity,” Shetty noted. “It’s a scalable approach that can evolve into assurance as companies mature.”
What Companies Should Do Now: A Phased Action Plan
| Focus Area | Early Steps to Consider |
|---|---|
| Materiality Mapping | Identify ESG risks and opportunities most relevant to your industry and stakeholders |
| Internal ESG Data Collection | Map data sources across departments—GHG emissions, diversity, CSR spend, governance practices |
| Vendor & Customer Segmentation | Apply the 2% rule to isolate core supply/value chain relationships |
| Assessment Partner Evaluation | Shortlist credible firms familiar with SEBI’s ESG templates |
| Implementation Timeline | Build a 2–3 year roadmap for BRSR Core compliance and maturity ramp-up |
Strategic Upside: ESG Isn’t Just Risk Mitigation
Rather than see ESG compliance as an obligation, forward-looking firms are framing it as a business advantage:
| Strategic Area | ESG-Driven Benefit |
|---|---|
| Capital Access | Enhanced ESG scores attract ESG funds, green bonds, and long-term capital |
| Brand Equity | Builds trust with clients, investors, and regulators |
| Global Supply Chain Readiness | Aligns with international norms (ISSB, TCFD, ESRS) |
| Preferred Vendor Status | ESG maturity increasingly factored into global procurement decisions |
Conclusion: A Constructive Pause, Not a Retreat
SEBI’s updated ESG roadmap is not a step backward—it’s a strategic recalibration. It ensures that Indian corporates adopt ESG frameworks not under duress, but with intention, rigour, and readiness.
Firms that take advantage of this transition window to build reliable internal systems, map their value chains, and engage credible assessment partners will be better prepared for the full ESG regime—and better positioned to lead in the next phase of investor and stakeholder scrutiny.