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SEBI introduces BRSR Core – Framework for assurance and ESG disclosures for value chain by listed entities

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SEBI has introduced the BRSR Core, a subset of the Business Responsibility and Sustainability Report (BRSR), consisting of a set of Key Performance Indicators (KPIs) under 9 ESG attributes.

This is a significant development in the field of ESG reporting and will help to improve the transparency and accountability of listed entities. Listed entities will be required to make disclosures as per the updated BRSR format in their Annual Reports. They will also be required to mandatorily undertake reasonable assurance of the BRSR Core, as per the glide path specified by SEBI in the circular.

Listed companies will be required to make disclosures for their value chain which will encompass the top upstream and downstream partners of a listed entity, cumulatively comprising 75% of its purchases or sales (by value), respectively. ESG disclosures for the value chain will be applicable to the top 250 listed entities (by market capitalization), on a comply-or-explain basis from FY 2024-25. The assurance provider of the BRSR Core must have the necessary expertise and there must be no conflict of interest with the listed entity. For example, the assurance provider or any of its associates should not sell their products or provide any non-audit or non-assurance related services, including consulting services, to the listed entity or its group entities. This means that investors can be confident that the ESG disclosures that they are relying on are accurate and reliable.

Other key benefits of the BRSR Core are that it will help listed entities to disclose their ESG performance in a more standardized and comparable way, it will provide investors with greater confidence in the accuracy and completeness of the disclosures and the introduction of ESG disclosures for the value chain will ensure that listed entities are taking into account the environmental and social impacts of their entire supply chain.

A copy of the SEBI Circular is attached below.

Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com

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