Sebi defers ESG disclosure deadline below BRSR framework by one yr until FY26, ETCFO
Markets regulator Sebi has determined to defer the ESG disclosure deadline for worth chain companions of listed firms by one yr till FY26, giving extra time to them to adjust to the Enterprise Accountability and Sustainability Reporting (BRSR) necessities. Till then, environmental, social and governance (ESG) reporting will stay voluntary as an alternative of the present “comply-and-explain” strategy.
The proposal, permitted by Sebi’s board on Wednesday, is geared toward enhancing ease of doing enterprise for listed firms and their worth chain companions in assembly BRSR requirement.
The Sebi’s board permitted a number of relaxations and updates for ESG disclosures.
These embrace “deferring ESG disclosures for worth chain”, in addition to “evaluation or assurance” thereof, by one yr. Therefore, ESG disclosures for worth chain shall apply from FY26 (as towards the present requirement of FY 2024-25) and “evaluation or assurance” thereof shall be relevant from FY 2026-27 (as towards the present requirement of FY 2025-26),” Sebi stated.
The phased strategy by Sebi to ESG reporting strikes the appropriate stability by encouraging fast motion whereas giving companies the time they should adapt, Smitha Shetty, Regional Director, APAC, Achilles Info, stated.
This technique fosters a extra inclusive and sustainable enterprise surroundings, empowering organisations of all sizes to contribute to a greener future for India, she added.
“Availability of worth chain data is a recognised problem all around the world, and this initiative of Sebi grants companies the mandatory time to streamline their preparedness, on the similar time permitting a window to encourage their worth chain companions to embrace ESG in the appropriate spirit, past mere compliance,” Dipankar Ghosh, Accomplice & Chief, Sustainability & ESG, BDO India, stated.
An organization’s worth chain consists of all actions that add worth, from sourcing uncooked supplies and providers to distributing and promoting merchandise.
It covers each upstream (procurement) and downstream (gross sales) operations, extending past direct actions. This performs an important function within the firm’s sustainability and ESG efforts.
In its assertion, Sebi stated the board has determined to cut back the scope of worth chain to cowl the highest upstream and downstream companions of a listed entity, individually comprising 2 per cent or extra of the listed entity’s purchases and gross sales (by worth), respectively.
Additional, entities can restrict these disclosures to 75 per cent of their whole purchases and gross sales by worth.
Sebi has made reporting of earlier yr knowledge non-obligatory for the primary yr of ESG worth chain disclosures. Moreover, a brand new management indicator below Precept 6 of BRSR will mandate firms to reveal inexperienced credit generated or procured by the corporate and its prime 10 worth chain companions.
The time period “assurance” has been changed with “evaluation or assurance”. Assessments will likely be carried out by third events primarily based on requirements developed by the Business Requirements Discussion board (ISF) in session with Sebi. This is applicable to BRSR Core disclosures from FY25 for listed entities and FY27 for the worth chain.
