The Securities and Exchange Board of India (SEBI) has rolled out a set of measures aimed at streamlining BRSR compliance for Indian companies that are listed while reinforcing its commitment to sustainable business practices. Announced on March 28th, these updates tweak the Business Responsibility and Sustainability Reporting (BRSR) framework, ease value chain disclosure requirements, and introduce voluntary reporting for green credits. This is in line with the recent developments to address regulatory fatigue and boost competitiveness in Europe, by harmonizing and simplifying key regulations such as CSRD, CSDDD, and EU Taxonomy.

For companies navigating the complex world of compliance, this is a welcome recalibration—offering flexibility without compromising accountability. In this blog, we explore the key changes, unpack their significance, and highlight what they mean for businesses striving to balance growth with responsibility.

Value Chain Reporting Shifts from ‘Comply or Explain’ to Voluntary

In July 2023, SEBI mandated that the top 150 listed companies by market capitalization report sustainability metrics for their value chains (suppliers, distributors, etc.) starting FY 2024-25 on a “comply-or-explain” basis, with the scope expanding to the top 250 companies by FY 2025-26. This required data from all “significant” partners, defined broadly, and posed challenges for smaller suppliers, especially MSMEs, lacking sustainability data tracking systems. Deliberations on simplifying the value chain disclosure requirements led to SEBI approving ‘ease of doing business’ measures in December 2023- the same have now been made official. 

What Changes:

SEBI’s has now introduced flexibility, changing requirements for the in-scope entities to include:

• Disclosures on the value chain starting from 2025-26 and assurance from 2026-27, both on a voluntary basis. 
• Limiting reporting to partners contributing 2% or more to purchases or sales by value and a minimum of 75% of the total purchase and sales value.
• Disclosing the % of total sales and purchases covered by the value chain partners, respectively, for which BRSR disclosures are provided.

Why It Matters:

Value chain is where much of a company’s sustainability impact lies, but collecting data across complex supplier  and downstream networks, especially from MSMEs, can be a bottleneck. SEBI’s earlier mandate risked overwhelming both listed companies and their partners. However, with SEBI’s updated requirements in place, companies no longer need to chase sustainability data from every small value chain partner; but can focus on major partners, easing the strain on both sides while building capacity over time. While this significantly reduces compliance burden, companies with a long-term vision have a strong business case to align with global best practices on value chain reporting. 

Shift from Assurance to Assessment- How ‘Reasonable’ Is It?

Under the original BRSR Core framework (introduced in 2021 and updated in 2023), top listed companies under BRSR Core were required to obtain “reasonable assurance” for nine key sustainability attributes, such as greenhouse gas emissions and water usage. This involved comprehensive third-party audits, which were resource-intensive, often costing lakhs and requiring extensive documentation.

What Changes:

• Assurance is replaced by ‘assurance or assessment’ in the regulatory text, hinting that a less stringent disclosure verification process would be acceptable.
• ‘Assessment’ refers to third-party assessment undertaken as per the standards developed by the Industry Standards Forum (ISF) in consultation with SEBI.
• Every clause or requirement earlier applicable to ‘Assurance’—for instance, eligibility of assurance providers, no conflict of interest clause, and points 14 & 15 in Annexure 16— is extended to ‘Assessment’ as well. 

Why It Matters:

The earlier requirement for reasonable assurance of sustainability disclosures meant companies had to undergo rigorous third-party audits, which could be time-consuming and expensive. By introducing the term ‘assessment’, SEBI has signalled a more flexible approach. Assessments still ensure credibility but rely on evaluations that are less resource-intensive, potentially involving internal reviews or lighter external validations. This change acknowledges the practical challenges companies face, especially when collecting and verifying sustainability data across complex operations. Given that there is no change in the BRSR Core phase-in model, we will see more companies requiring assurance or assessment as per the following schedule: 

While companies now have an option of settling with ‘assessments’, they need to carefully consider the consequences of diluting assurance quality, particularly in the context of access to global capital and markets. 

Green Credits Enable Companies to Differentiate on Sustainability Performance

Green Credits Programme, launched by India’s Ministry of Environment, Forest and Climate Change in 2023, was earlier not part of the BRSR framework. Companies earning credits through activities like afforestation or renewable energy had no formal way to report them in sustainability disclosures, limiting visibility to investors.

What Changes:

Starting FY 2024-25, companies can voluntarily disclose under the leadership indicator of Principle 6:

• No. of green credits generated or procured by the listed entity
• No. of green credits generated or procured by the top ten value chain partners (by sales and purchase value)

Why It Matters:

Green credits reward tangible environmental actions, from planting trees to adopting solar power. By integrating them into BRSR reports as a voluntary option, SEBI is giving companies a platform to showcase their eco-credentials. A textile firm earning credits through water recycling, for instance, can highlight this in its annual report, appealing to sustainability-focused stakeholders in a competitive market. Since it’s optional, there’s no pressure to participate—but early adopters could gain a competitive edge as sustainability becomes a market differentiator.

SEBI Seeks to Balance Growth and Responsibility: What Does it Mean for Businesses?

SEBI’s measures reflect a broader vision: making India a hub for sustainable business without stifling growth. But, how can companies seize opportunities and lead the way?

Cost Efficiency and Strategic Gains

The shift to assessments and streamlined value chain rules translates to significant savings. Smaller listed companies, in particular, can avoid the hefty costs of audits and broad supplier surveys, redirecting funds to growth or sustainability projects. Larger firms can optimize compliance budgets, perhaps investing in energy-efficient tech or employee training.

However, companies still need robust sustainability data management systems—those who invest in tools and processes now will be better prepared for future mandates.

Smarter Supply Chain Collaboration

The relaxed value chain requirements are a chance to strengthen partnerships strategically. By focusing on significant suppliers, companies can drive meaningful sustainability initatives—like helping a key vendor reduce emissions—without overwhelming smaller players. The voluntary first year is a testing ground: use it to pilot data collection, train partners, and refine workflows.

Proactive firms will see this as an opportunity to integrate sustainability aspects into supplier contracts early, avoiding a rush when compliance becomes mandatory.

Green Credits as a Brand Booster

Voluntary green credit disclosures offer a low-risk way to stand out. In a market where investors and customers increasingly value sustainability, showcasing credits earned through, say, reforestation can enhance reputation and appeal. Companies in high-impact sectors like manufacturing or energy could particularly benefit from this visibility.

Opting out is fine for now, but keep an eye on competitors—peer pressure and investor expectations may make green credit reporting a norm over time.

Staying Globally Competitive

SEBI’s measures ensure India’s sustainability disclosure framework holds up against international standards, keeping listed companies viable for global funds with strict sustainability criteria. Yet they’re tailored to India’s context, where MSMEs dominate supply chains and compliance capacity varies. Businesses that align with these rules while tracking global trends like CSRD will stay ahead.

No room for complacency

Flexibility comes with a caveat: don’t delay sustainability readiness. Building robust data systems and supplier capabilities takes time. Companies that treat these measures as a pause rather than a preparation phase risk falling behind peers who use the window to strengthen their sustainability practices.