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 - CSR

Introduction:

On March 28, 2025, the Securities and Exchange Board of India (SEBI) issued a circular introducing amendments to the Business Responsibility and Sustainability Reporting (BRSR) Core framework. The key changes aim to streamline value chain partner (VCP) reporting, enhance flexibility in assurance and assessment requirements, and promote transparency through Green Credit disclosures, reducing compliance burdens for listed companies.

1. Existing Provisions:

• Under the BRSR Core framework, listed companies were required to provide detailed ESG disclosures, including information on their value chain partners (VCPs).
• Comprehensive reporting was mandated for both upstream and downstream VCPs, leading to compliance challenges and resource burdens.
• Companies may restrict VCP disclosures to cover up to 75% of their total sales and purchases, focusing on material partners.
• Principle 6 of the BRSR required disclosures on entities’ environmental performance, with an emphasis on sustainability initiatives.
• Listed entities were required to obtain mandatory assurance for select BRSR Core disclosures to ensure data accuracy and reliability.

2. Key Changes Introduced:

• Value Chain Partner Reporting: SEBI has further eased the disclosure requirements by limiting VCP reporting to those contributing 2% or more of sales or purchases by value. This cap ensures companies focus on material relationships while reducing compliance efforts.
• Assurance and Assessment Flexibility: SEBI has introduced an option for listed companies to choose between assessment or assurance for BRSR Core disclosures, allowing greater flexibility in compliance approaches.
• Green Credit Disclosure: SEBI introduced a new leadership indicator under Principle 6 of BRSR Core, requiring companies to report Green Credits generated or procured by themselves and their top 10 VCPs.

3. Rationale for the Changes:

• The refined VCP reporting criteria are designed to minimize unnecessary disclosures while maintaining transparency on key value chain relationships.
• Allowing assessment as an alternative to assurance offers flexibility to companies, reducing compliance costs while ensuring data credibility.
• Green Credit disclosures enhance visibility into companies’ environmental scontributions and align with India’s broader sustainability goals.

This circular can be accessed by the link given below:

https://www.sebi.gov.in/legal/circulars/mar-2025/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_93102.html