Securities and Exchange Board of India (SEBI) has released Circular No. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated July 12, 2023, introducing the BRSR Core framework for assurance and ESG disclosures for the value chain. This circular brings significant updates and amendments to the Business Responsibility and Sustainability Report (BRSR) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In this article, we will analyze the key highlights of the circular, including the BRSR Core framework, updated BRSR format, applicability, and ESG disclosures for the value chain.
The circular highlights the introduction of the BRSR Core, which is a subset of the BRSR consisting of Key Performance Indicators (KPIs) and metrics under 9 ESG attributes. The BRSR Core aims to provide reasonable assurance by listed entities, and it incorporates new KPIs such as job creation, openness of business, and gross wages paid to women. Additionally, it emphasizes the inclusion of intensity ratios based on revenue adjusted for Purchasing Power Parity (PPP) for better global comparability.
The BRSR Core specifies the data and approach for reporting and assurance, although it allows for industry-specific adjustments and disclosures of any changes made. The circular also mentions the applicability of the BRSR Core to the top listed entities based on market capitalization, with a phased implementation over the coming years.
Furthermore, the circular introduces ESG disclosures for the value chain, which requires listed companies to report KPIs in the BRSR Core for their top upstream and downstream partners. The value chain encompasses partners contributing to 75% of the listed entity’s purchases or sales by value. The disclosure scope and any assumptions or estimates must be clearly disclosed.
The circular emphasizes the importance of selecting an assurance provider with the necessary expertise and ensuring there is no conflict of interest. It advises listed entities to avoid appointing assurance providers or their associates who have conflicting relationships, such as selling products or providing non-audit/non-assurance services to the listed entity or its group entities.
Securities and Exchange Board of India
Circular No. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 Dated: July 12, 2023
To,
All listed entities
All Recognized Stock Exchanges
Sir / Madam,
Subject: BRSR Core – Framework for assurance and ESG disclosures for value chain
1. SEBI vide Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated May 10, 2021 had prescribed the Business Responsibility and Sustainability Report (BRSR) which was subsequently incorporated in the Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023. Based on the recommendations of the ESG Advisory Committee and pursuant to public consultation, the Board decided to introduce the BRSR Core for assurance by listed entities. The Board further decided to introduce disclosures and assurance for the value chain of listed entities, as per the BRSR Core.
2. The provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) in this regard, have been amended vide Gazette notification no. SEBI/LAD-NRO/GN/2023/131 dated June 14, 2023.
3. BRSR Core and Updated BRSR
3.1 The BRSR Core is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs) / metrics under 9 ESG attributes. Keeping in view the relevance to the Indian / Emerging market context, few new KPIs have been identified for assurance such as job creation in small towns, open-ness of business, gross wages paid to women etc. Further, for better global comparability intensity ratios based on revenue adjusted for Purchasing Power Parity (PPP) have been included. The format of BRSR Core for reasonable assurance is placed at Annexure I. The BRSR format after incorporating new KPIs of BRSR Core is placed as Annexure II. Accordingly, the BRSR format as prescribed in Annexure 16 of the aforementioned Master Circular stands revised.
3.2 In order to facilitate the verification process, the BRSR Core specifies the data and approach for reporting and assurance. It is however clarified that the approach specified is only a base methodology. Any changes or industry specific adjustments / estimations shall be disclosed.
3.3 For ease of reference, the BRSR Core contains a cross-reference to the disclosures contained in the BRSR.
3.4 Applicability
3.4.1 From FY 2023 – 2024, the top 1000 listed entities (by market capitalization) shall make disclosures as per the updated BRSR format, as part of their Annual Reports.
3.4.2 Listed entities shall mandatorily undertake reasonable assurance of the BRSR Core, as per the glide path specified in the following table:
| Financial Year | Applicability of BRSR Core to top listed entities (by market capitalization) |
| 2023 – 24 | Top 150 listed entities |
| 2024 – 25 | Top 250 listed entities |
| 2025 – 26 | Top 500 listed entities |
| 2026 – 27 | Top 1000 listed entities |
4. ESG Disclosures for value chain
4.1 Disclosures for value chain shall be made by the listed company as per BRSR Core, as part of its Annual Report. For this purpose, value chain shall encompass the top upstream and downstream partners of a listed entity, cumulatively comprising 75% of its purchases / sales (by value) respectively.
4.2 Listed entities shall report the KPIs in the BRSR Core for their value chain to the extent it is attributable to their business with that value chain partner. Such reporting may be segregated for upstream and downstream partners or can be reported on an aggregate basis.
4.3 The scope of reporting and any assumptions or estimates, if any, shall be clearly disclosed.
4.4 Applicability
4.4.1 ESG disclosures for the value chain shall be applicable to the top 250 listed entities (by market capitalization), on a comply-or-explain basis from FY 2024-25.
4.4.2 The limited assurance of the above shall be applicable on a comply-orexplain basis from FY 2025 – 26.
5. Assurance provider
5.1 The Board of the listed entity shall ensure that the assurance provider of the BRSR Core has the necessary expertise, for undertaking reasonable assurance.
5.2 The listed entity shall ensure that there is no conflict of interest with the assurance provider appointed for assuring the BRSR Core. For instance, it shall be ensured that the assurance provider or any of its associates do not sell its products or provide any non-audit / non-assurance related service including consulting services, to the listed entity or its group entities.
6. The Stock Exchanges are advised to bring the provisions of this circular to the notice of all listed entities and also disseminate the same on their websites.
7. The Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 101 of the LODR.
Yours faithfully,
Surabhi Gupta
General Manager
Corporation Finance Department
Supervision, Enforcement and Compliance Division – II
+91-22-26449315
