The Securities and Exchange Board of India (SEBI) is working on revamping its Business Responsibility and Sustainability Reporting (BRSR) standards to align with internationally recognised environmental, social, and governance (ESG) norms, sources said.
The regulator has set up a research team that includes enablers such as the Shakti Sustainable Energy Foundation and auctusESG. This team has already presented its findings to SEBI’s ESG Advisory Committee, identifying gaps in the current BRSR framework, and is working on the additions and adjustments required to align with the International Financial Reporting Standards (IFRS).
This move follows the endorsement of IFRS by the International Organization of Securities Commissions (IOSCO)—which is the global standard setter for securities regulations. The IOSCO Board is made up of 32 securities regulators, with SEBI being one of its members.
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IOSCO has urged its 130 member jurisdictions to adopt the International Sustainability Standards Board’s (ISSB) IFRS S1 and IFRS S2 standards—guidelines that have been in effect since January 2024. These standards lay out the general requirements for reporting sustainability-related financial information and climate change disclosures.
An email sent to SEBI for comments did not elicit a response.
Global alignment
Once aligned, more exhaustive explanations regarding sustainability risks, opportunities, impact study, benchmarking, and more sector-specific targets will add to the existing ESG disclosure norms to be met by the top 1000 listed companies as per market capitalisation, a source said.
Key disclosures as per ISSB regarding the entity’s strategy, risk management, metric and targets for sustainability-related risks and opportunities—metrics that are currently underrepresented in the BRSR framework—will find their way in as part of the overhaul, the source said.
Further, ISSB mandates the disclosure of Scope 3 GHG emissions, which refers to indirect greenhouse gas emissions generated throughout a company across various categories within the value chain. This is lagging in BRSR norms and is under discussion for inclusion.
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However, this overhaul is expected to be a slow moving process with no deadline known, one of the sources said. Once the research committee maps the changes to the BRSR framework, the ESG Advisory committee will review it and then it will be taken up by the SEBI Board for final approval.
ISSB has more recently also provided a guide for the adoption of these standards by all local jurisdictions. As per IOSCO’s latest release, around 56 jurisdictions have taken action to adopt ISSB’s standards, with half of them already finalising its adoption.