The Current State of BRSR in Corporate India 2.0

Effectively incorporating sustainability considerations into financial decisions, including investment process and capital allocation, remains a significant challenge for global capital markets and the investment industry. Although sustainability data has entered mainstream discourse, the debate around how sustainability information should be integrated into investment decisions continues across industries, sectors, and markets. Meaningful and measurable integration of sustainability information presents an important opportunity for investment analysts and portfolio managers across asset classes and geographies.

In India, FY2022–23 marked the first full reporting year for regulator-mandated BRSR disclosures by the top 1,000 listed companies by market capitalization, as directed by the SEBI. Companies are required to disclose BRSR information as part of their annual reports. BRSR disclosures are aligned with the nine principles of the National Guidelines on Responsible Business Conduct (NGRBCs), covering areas such as gender participation, emissions, water use, energy footprint, and employee well-being. This 2nd edition of our analysis indicates that, despite several challenges, corporate India has made notable qualitative and quantitative progress in ESG reporting.

Our analysis covers sustainability disclosures from annual reports of 300 listed Indian companies across FY2022–23, FY2023–24, and FY2024–25. The study focuses primarily on quantitative parameters, clearly defined qualitative data, and binary responses to enable comparability and measurable trend analysis. In addition to the analysis of BRSR data from companies, this report draws on stakeholder interviews and roundtables conducted with asset management companies, investors, corporations, rating agencies, ESG data providers, proxy advisers, and service providers. Across stakeholder groups, a consistent theme emerged: the need to improve data quality, consistency, comparability, and reporting methodologies to make BRSR disclosures more useful for investment decision-making.

Stakeholders emphasized the importance of standardized reporting units, consistent reporting boundaries, and stable methodologies. Frequent changes in reporting boundaries without adequate rationale continue to reduce comparability across reporting periods. There is also growing demand for additional forward-looking climate and carbon-transition data, particularly as physical and transition climate risks gain prominence across industries.

The report also highlights the importance of sector-sensitive reporting. Certain BRSR indicators are inherently more relevant for specific industries. For example, product recall metrics are more concentrated in the Healthcare and Consumer Discretionary sectors, while data breaches are more common in Information Technology and sectors handling large customer databases. Similarly, R&D and environmental capital expenditure (capex) metrics may be more relevant for manufacturing and product-based companies than for many financial institutions. Sector-specific interpretation of disclosures can improve comparability and reduce box-ticking approaches.

The utility of BRSR varies among investors. For many market participants, BRSR currently functions primarily as a risk management tool rather than a decisive alpha-generating input. At the same time, investors increasingly use sustainability disclosures to identify ESG leaders and laggards by assessing climate-risk exposure, transition preparedness, and carbon exposure.

The findings indicate that standalone sustainability reporting remains dominant in India, although some sectors continue to use consolidated reporting structures. Workforce disclosures show that employee churn remains elevated in Financials, IT, Consumer Discretionary, and Communication Services, while Energy, Utilities, and Materials continue to exhibit lower attrition levels.

Additionally, energy and emissions reporting coverage expanded further during the study period. Renewable energy disclosure increased steadily, particularly in Financials, Consumer Discretionary, and Industrials. Scope 1 and Scope 2 emissions reporting remained high, while Scope 3 reporting also expanded significantly, although with considerable volatility across sectors. The data also shows improving disclosure levels for R&D and environmental and social capex investments, although full allocation toward environmental and social technologies remains limited. Sustainable sourcing procedures have also become more widely adopted.

The report also observes growth in value-chain environmental assessments and continued disclosure of procurement from micro, small, and medium enterprises (MSMEs). Product recalls remained limited and sector specific, while data breaches increased during FY2024–25, driven primarily by Consumer Discretionary and IT sectors.

The report recommends enhancements across three areas: the BRSR format itself, reporting companies, and other ecosystem participants such as investors, policymakers, ESG rating providers, and capital providers. Key recommendations include improving reporting consistency, strengthening assurance practices, increasing methodological clarity, enhancing sector-specific guidance, and improving linkages between sustainability data and financial metrics.

Globally, sustainability reporting frameworks continue to evolve, with the International Sustainability Standards Board (ISSB) playing an increasingly important role in advancing investor-focused sustainability disclosures. In India, SEBI has played a leading role in developing the sustainability reporting ecosystem, and BRSR has established a strong foundation for further progress. Further improvements in areas such as standardization, comparability, granularity, and reporting clarity will help, but in general the Indian listed companies are making substantial and consistent progress in sustainability disclosures.