Sustainability reporting

Sustainability reporting gaining a huge traction due to the global push and investors demand, to keep up with these requirements SEBI also making required changes and mandating the disclosure requirements, in this regard new amendments introduces is explained here,

Now Entities may opt for the third-party assessment or assurance and this assessment must follow standards by the Industry Standards Forum (ISF). And now CA firms can provide these services provided they have a requisite expertise and no conflict of interest.

Day by day the requirements for disclosure with respect to ESG and undertaking the activities to curb environmental pollution and diligent usage of the resources is becoming mandatory for the entities.1. 

Given an option to undertake ‘assessment’ or ‘assurance’ for BRSR Core and ESG disclosures for value chain.

Green credits:

In Principle 6 of BRSR, an additional 8^th leadership indicator included for disclosures on green credits.

How many Green Credits have been generated or procured:

a. By the listed entity

b. By the top ten value chain partners (by value of purchases/sales)

Applicable for BRSR disclosures for FY 2024-25 and onwards.

 

Assessment & Assurance

New KPIs included which are as follows;

a.      Job creation in small towns

b.      Open-ness of business

c.       Gross wages paid to women

And for better global comparability intensity ratios based on revenue adjusted for Purchasing Power Parity (PPP) have been included.

Listed entities shall mandatorily undertake assessment or assurance of the BRSR Core as per the following timelines:

Financial Year   Applicability of BRSR Core to top listed entities (by market capitalization)

2023 – 24 Top 150 listed entities

2024 – 25 Top 250 listed entities

2025 – 26 Top 500 listed entities

2026 – 27 Top 1000 listed entities

 

Note the following for assessment provider:

The listed entity shall ensure that there is no conflict of interest with the assessment or assurance provider appointed for assessing or assuring the BRSR Core. For instance, it shall be ensured that the assessment or assurance provider or any of its associates do not sell its products or provide any non-audit / non-assessment / non assurance related service including consulting services, to the listed entity or its group entities.”

Value chain disclosure and assessment or assurance is deferred by one year and to revise the threshold for values chain partners.

Value chain shall include individually comprising 2% or more of the listed entity's purchases and sales (by value) respectively. However, the listed entity may limit disclosure of value chain to cover 75% of its purchases and sales (by value) respectively.”

ESG disclosures for the value chain shall be applicable to the top 250 listed entities on a voluntary basis from FY 2025 26.

The assessment or assurance of the above shall be applicable on a voluntary basis from FY 2026-27

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

How these requirements of disclosures and assessment will shape up the company's image in the public eyes is interesting in coming years.