The Next Frontier of ESG in India:

The Securities and Exchange Board of India has extended the BRSR Core framework to include value chain disclosures, introducing ESG reporting obligations that reach upstream to suppliers and downstream to distributors and customers. The framework requires companies to disclose ESG data from their value chain partners that account for at least 2% of total purchases or sales — covering up to 75% of aggregate value chain activity.

As of FY 2025–26, the top 250 listed companies are required to make these disclosures on a voluntary basis, with the corresponding assessment or assurance obligation becoming applicable from FY 2026–27. From FY 2026–27, mandatory third-party assurance of ESG disclosures — including value chain partner data — will begin, with the scope of reporting widening to include the top 500 listed companies. By FY 2027, the expectation is that BRSR reporting will extend to all companies.

This is a structural expansion of the BRSR framework, not a minor amendment. The scope of ESG accountability in India is moving decisively from the listed entity to its entire business ecosystem.

To appreciate the magnitude of this development, consider what it represents structurally. SEBI's BRSR framework, until now, operated within the boundaries of the listed company. The primary ESG actors were the companies themselves — their internal controls, their data systems, their governance structures. Value chain partners were largely invisible in the formal disclosure architecture.

This extension changes the logic of ESG accountability entirely. The fundamental premise is that the majority of environmental and social risks associated with large businesses do not sit in corporate headquarters — they sit in supply chains. A listed company's Scope 3 emissions, for example, are by definition generated outside its direct operations. Its labour rights risks are most acute in lower tiers of its supplier network. Its water consumption exposure often resides with agricultural or manufacturing suppliers, not within its own facilities.

By requiring disclosures from value chain partners, SEBI is acknowledging this reality and creating a mechanism to surface it. This move also signals a direction of travel that goes well beyond the current cohort of 250 companies. The phased BRSR rollout has consistently expanded — from top 1,000 to top 500 to top 250 — and the value chain framework follows the same pattern. Businesses that supply to listed companies today are facing informal ESG scrutiny. They will face formal disclosure expectations in the near future.

Furthermore, the BRSR Core assurance requirements that already apply to listed entities are now being extended to value chain disclosures. This means that the data flowing from suppliers and distributors will not merely be collected and reported — it will need to survive independent verification. The difference between sustainability data designed for a well-formatted annual report and data that can withstand an assurance engagement is significant.