Rajiv Mehta, the compliance head of a mid-sized automotive component manufacturer, received an urgent email from one of the company’s largest customers. The customer wanted plant-level ESG data within 30 days, including electricity consumption, greenhouse gas emissions, hazardous waste, water withdrawal, employee safety and supplier sustainability information.
Rajiv believed the information was already available. His team had prepared an ESG spreadsheet the previous year, and every plant submitted monthly environmental reports. However, when the records were reviewed, the numbers did not match.
The ESG spreadsheet showed annual electricity consumption of 4,280 MWh, while the 12 monthly electricity bills added up to 4,612 MWh. This created a difference of 332 MWh, or approximately 7.2%.
The sustainability report showed hazardous waste generation of 128.6 metric tonnes, while the waste manifests supported only 116.4 metric tonnes. Only 17 out of 42 major suppliers had submitted ESG information. Diesel used in backup generators and company vehicles had also been excluded from the greenhouse gas inventory.
The problem was not a lack of information. The problem was that the company had no common reporting boundary, no defined calculation methodology and no evidence trail connecting the reported figures with primary records.
An ESG consultant helped Rajiv’s team review 12 months of bills, registers, manifests and supplier records. Within approximately 8 weeks, the company established a controlled ESG database, reconciled 64 reporting indicators and obtained supplier data covering around 76% of its procurement value.
The customer accepted the revised submission after raising only 3 clarification points. More importantly, Rajiv no longer had to rebuild the company’s sustainability information from the beginning every year.
This is an illustrative composite case study based on commonly observed ESG reporting challenges. It is not presented as a named client engagement or regulatory order.
Environmental, Social and Governance reporting is no longer limited to publishing a few sustainability initiatives in an annual report. Companies are increasingly expected to support every significant ESG statement with measurable data, calculation methods and documentary evidence.
For Indian listed companies, Business Responsibility and Sustainability Reporting, commonly called BRSR, has become a formal part of annual reporting. The requirement applies to the top 1,000 listed entities by market capitalisation and has been mandatory from FY 2022-23.
The compliance requirement becomes more detailed under BRSR Core. BRSR Core contains Key Performance Indicators under 9 ESG attributes and is subject to mandatory assessment or assurance according to a phased applicability schedule.
For FY 2025-26, mandatory BRSR Core assessment or assurance applies to the top 500 listed entities. From FY 2026-27, the requirement expands to the top 1,000 listed entities.
The pressure also reaches unlisted manufacturers, importers, MSMEs, exporters and service providers. A company may not be directly required to file BRSR, but its listed customer, overseas buyer, investor or financial institution may request ESG information as part of supplier approval or funding due diligence.
Common ESG requests now include:
An ESG consultant should not begin by designing the report. The first step is to understand the company’s legal structure, facilities, products, reporting obligations, stakeholders and sustainability risks.
The consultant then identifies which reporting framework applies. A listed company may require BRSR and BRSR Core support. An exporter may require product carbon footprint or CBAM data. A multinational supplier may need GRI, IFRS S1, IFRS S2, EcoVadis or CDP support.
GRI reporting focuses on an organisation’s most significant impacts on the economy, environment and people, including human rights. IFRS S1 and IFRS S2 provide an investor-focused baseline for sustainability-related and climate-related financial disclosures.
Once the framework is selected, the consultant converts reporting requirements into measurable data points. Every indicator should have a defined unit, data owner, calculation method, evidence source and approval process.
A structured ESG consulting engagement usually includes:
| Regulation or Framework | Numerical Requirement | Timeline | Applicable To | Main Risk |
|---|---|---|---|---|
| SEBI BRSR | Top 1,000 listed entities | Mandatory from FY 2022-23 | Listed entities based on market capitalisation | Incomplete annual-report disclosure |
| BRSR Core assessment or assurance | Top 500 entities | FY 2025-26 | Applicable listed entities | Unsupported or qualified ESG indicators |
| BRSR Core assessment or assurance | Top 1,000 entities | FY 2026-27 | Applicable listed entities | Reporting delay and evidence failure |
| Value-chain ESG disclosure | Top 250 entities | Voluntary from FY 2025-26 | Applicable listed entities | Supplier-data gaps |
| Value-chain assessment or assurance | Top 250 entities | Voluntary from FY 2026-27 | Applicable listed entities | Weak evidence from suppliers |
| GRI Standards | Based on material impacts | Organisation-defined cycle | Any public or private organisation | Incomplete impact disclosure |
| IFRS S1 and IFRS S2 | Sustainability and climate-related information | Based on adoption or voluntary use | Investor-facing businesses | Sustainability risks disconnected from financial reporting |
| EU CBAM | 6 primary sectors | Definitive regime from 1 January 2026 | EU importers and relevant exporters | Customer rejection and carbon-cost exposure |
| Environment Protection Act, 1986 | Penalties up to Rs 15 lakh for specified contraventions | Ongoing | Regulated businesses | Financial and operational action |
The current SEBI master circular confirms that BRSR reporting applies to the top 1,000 listed entities. It also confirms the BRSR Core glide path of the top 500 entities in FY 2025-26 and the top 1,000 entities in FY 2026-27.
Companies should not treat the above frameworks as interchangeable. BRSR is a regulatory disclosure for applicable listed entities, while GRI and IFRS sustainability standards serve different reporting objectives.
BRSR is based on the 9 principles of the National Guidelines on Responsible Business Conduct. It seeks both qualitative and quantitative disclosures relating to governance, workforce, environmental performance, customers, communities and responsible business conduct.
The reporting format separates indicators into essential indicators and leadership indicators. Essential indicators are mandatory for applicable listed entities, while leadership indicators are voluntary.
BRSR Core is a selected subset of BRSR indicators. It focuses on standardised and comparable indicators that can be subjected to external assessment or assurance.
The BRSR Core framework includes 9 ESG attributes and contains indicators relating to:
For FY 2025-26, the top 500 listed entities must undertake assessment or assurance of BRSR Core. This expands to the top 1,000 listed entities from FY 2026-27.
SEBI also clarifies that assessment refers to third-party assessment undertaken in accordance with standards developed by the Industry Standards Forum in consultation with SEBI.
Value-chain ESG reporting creates a direct connection between listed companies and their suppliers, distributors and customers.
For the top 250 listed entities, value-chain ESG disclosure is voluntary from FY 2025-26. Assessment or assurance of value-chain disclosures becomes voluntary from FY 2026-27.
The framework allows a listed entity to identify upstream and downstream partners that individually account for 2% or more of its purchases or sales by value. The listed entity may limit the total value-chain disclosure coverage to 75% of purchases and sales.
This is important for MSMEs and unlisted manufacturers. A smaller company may not have a direct BRSR filing obligation, but it may still be asked to provide ESG data because it represents a significant part of a listed customer’s procurement value.
A supplier may therefore receive requests for:
A first-time ESG reporting exercise should begin several months before publication. The final report may take only a few weeks to write, but gathering, validating and reconciling the underlying information takes much longer.
For a company with 2 to 5 facilities, a realistic internal planning period may range from 12 to 20 weeks. This is an advisory estimate and not a statutory processing timeline.
Companies with 10 or more facilities, international subsidiaries or extensive Scope 3 requirements may require a longer implementation period.
| Step | Activity | Indicative Duration | Main Documents | Risk |
|---|---|---|---|---|
| 1 | Applicability assessment | 1-2 weeks | Corporate structure, listing status, customer requirements | Wrong framework selected |
| 2 | Reporting-boundary definition | 1 week | Facility list, subsidiaries, operational-control records | Locations excluded |
| 3 | Materiality assessment | 2-4 weeks | Stakeholder interviews and surveys | Important issues omitted |
| 4 | KPI and data-owner mapping | 2-3 weeks | RACI matrix and data dictionary | No accountability |
| 5 | Data collection | 4-8 weeks | Bills, registers, invoices and policies | Missing evidence |
| 6 | GHG calculation | 3-6 weeks | Fuel, electricity and activity data | Incorrect emissions |
| 7 | Evidence reconciliation | 2-4 weeks | Finance records and statutory returns | Conflicting figures |
| 8 | Report preparation | 2-3 weeks | BRSR, GRI or sustainability-report draft | Incomplete narrative |
| 9 | Management review | 1-2 weeks | Review comments and approvals | Unapproved disclosures |
| 10 | Assessment readiness | 2-5 weeks | Evidence room and calculation files | External qualifications |
A strong project plan should include at least 3 levels of responsibility: the data preparer, the functional reviewer and the final management approver.
Practical controls include:
Materiality determines which ESG topics require priority management attention. It should not be prepared by copying the material topics disclosed by another company.
A manufacturing company may identify energy, emissions, worker safety, water, waste and supply-chain practices as high-priority topics. A technology company may place greater importance on employee retention, data privacy, responsible artificial intelligence and cybersecurity.
GRI defines material topics as those representing an organisation’s most significant impacts on the economy, environment and people, including human rights.
A proper materiality assessment may involve 20 to 50 internal and external stakeholders, depending on the company’s size. The exercise can include interviews, surveys, workshops and management review.
The assessment should result in a prioritised materiality matrix, but the matrix is not the final output. Every high-priority topic should be connected with measurable targets and named accountability.
For example:
Targets should be supported by baseline data, capital requirements and an implementation owner.
Greenhouse gas accounting is one of the most data-intensive parts of ESG reporting.
Scope 1 covers direct emissions from sources owned or controlled by the company. This may include diesel generators, boilers, furnaces, company-owned vehicles, process emissions and refrigerant leakage.
Scope 2 covers indirect emissions from purchased or acquired electricity, steam, heating and cooling consumed by the organisation.
Scope 3 covers other indirect emissions across the company’s value chain. The GHG Protocol classifies Scope 3 emissions into 15 categories, including purchased goods, capital goods, fuel-related activities, transport, waste, business travel, employee commuting, product use and investments.
A complete carbon inventory should clearly document:
Consider a plant that consumes 5,000 MWh of electricity in a financial year. A mistake of only 5% in electricity data would create an error of 250 MWh before the emission factor is even applied.
Similarly, if a company purchases 400,000 litres of diesel but records only 360,000 litres, the unreported difference is 40,000 litres, or 10% of the actual consumption.
A carbon calculation is therefore only as reliable as the underlying operational and financial records.
Environmental performance disclosed in an ESG report should reconcile with the company’s statutory environmental records.
A company may claim that 100% of its hazardous waste was managed responsibly. That statement should be traceable to waste registers, manifests, transporter records, recycler authorisations and disposal invoices.
Similarly, reported water withdrawal should reconcile with water meters, water bills, borewell permissions, tanker invoices and production data.
An ESG consultant should compare the sustainability report with:
This review may identify a difference between ESG performance and legal compliance. A company may have reduced waste generation but still be non-compliant because it used an unauthorised recycler.
Environmental compliance should therefore be reviewed at 3 levels:
Indian exporters are increasingly required to provide product-level carbon information to international customers.
The European Union Carbon Border Adjustment Mechanism entered its definitive phase on 1 January 2026 after a transitional period running from 2023 to 2025.
CBAM currently covers 6 main sectors:
The formal filing responsibility generally rests with the EU importer or authorised declarant. However, the importer may depend on the Indian manufacturer for installation-level production and embedded-emission information.
An annual corporate carbon footprint may not be sufficient. The exporter may need to calculate emissions for a particular facility, production route or product category.
An ESG and CBAM readiness exercise should examine:
Failure to provide reliable information may result in customer disputes, delayed orders or the use of less favourable default values.
Assessment or assurance should not begin after the report is complete. The evidence structure should be designed at the beginning of the reporting period.
For every quantitative indicator, the company should maintain a calculation file, supporting documents, source references and management review.
A company reporting 25 environmental indicators across 4 plants may need to manage more than 100 plant-level data sets before consolidation.
Evidence should generally support 5 basic assertions:
SEBI requires the board of the listed entity to ensure that the BRSR Core assessment or assurance provider has the necessary expertise. The company must also ensure that there is no conflict of interest. The provider and its associates should not simultaneously provide consulting or other unrelated services to the listed entity or its group entities.
The ESG consultant can help prepare the data and documentation, but the independence of the external assessment or assurance provider must be preserved.
An incorrect ESG report does not automatically create the same legal penalty in every case. The consequence depends on whether the issue is a disclosure error, an underlying environmental violation, a stock-exchange non-compliance or a misleading claim.
The first level of risk is reporting risk. Unsupported figures may lead to assessment qualifications, repeated evidence requests, delayed board approval or correction of disclosures.
The second level is commercial risk. Customers may reject supplier information, reduce vendor ratings or suspend onboarding until corrective action is completed.
The third level is regulatory risk. ESG due diligence may reveal expired consents, incorrect environmental returns, unauthorised disposal, missing EPR registrations or breaches of pollution-control conditions.
Potential consequences include:
Under Section 15 of the amended Environment Protection Act, 1986, a contravention for which no separate penalty is provided can attract a penalty ranging from Rs 10,000 to Rs 15 lakh. A continuing contravention can attract an additional penalty of Rs 10,000 per day.
Section 15A provides that a company may be liable to a penalty ranging from Rs 1 lakh to Rs 15 lakh for each contravention. A continuing contravention may attract an additional penalty of Rs 1 lakh per day.
For contraventions relating to emission standards or hazardous-substance safeguards under Sections 7 and 8, Section 14A provides penalties from Rs 1 lakh to Rs 15 lakh, with an additional Rs 50,000 per day for continuing contravention.
Failure to pay an imposed penalty within 90 days can lead to imprisonment of up to 3 years, a fine of up to twice the penalty amount, or both.
These statutory provisions apply to underlying environmental contraventions. They should not be inaccurately presented as an automatic penalty for every ESG drafting error.
An ESG consultant should understand reporting frameworks as well as industrial operations.
A consultant may prepare an attractive report, but the report will remain weak when its figures cannot be reconciled with electricity bills, production data, payroll records, environmental returns and waste documentation.
The scope of work should clearly identify the facilities, legal entities, reporting period and applicable framework. It should also specify whether carbon accounting, materiality assessment, supplier engagement, policy development and assessment readiness are included.
Before selecting a consultant, evaluate:
A good consultant should also be able to explain the company’s data limitations honestly. Unsupported precision creates greater risk than a clearly disclosed and reasonable estimate.
Appointing an ESG Consultant in India should not be treated as a report-design exercise. ESG reporting requires a controlled system connecting operational data, financial records, environmental compliance, workforce information, supplier records and board oversight.
The regulatory scope is expanding numerically. BRSR already applies to the top 1,000 listed entities. BRSR Core assessment or assurance applies to the top 500 entities in FY 2025-26 and expands to the top 1,000 entities in FY 2026-27.
Value-chain disclosure also means that smaller suppliers are increasingly expected to provide ESG information. The current framework allows listed entities to focus on partners individually representing at least 2% of purchases or sales and to limit aggregate coverage to 75%.
Early preparation gives a company enough time to identify missing records, correct inconsistent calculations and improve performance before the reporting deadline.
The cost of setting up a structured ESG data system is generally lower than the cost of repeated customer queries, reporting delays, assessment qualifications or regulatory action.
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BRSR is mandatory for the top 1,000 listed entities by market capitalisation. Other organisations may report voluntarily or provide ESG information due to customer, investor, lender or export requirements.
BRSR Core is a selected set of Key Performance Indicators under 9 ESG attributes. Mandatory assessment or assurance applies to the top 500 listed entities in FY 2025-26 and the top 1,000 entities in FY 2026-27.
Value-chain ESG disclosure for the top 250 listed entities is voluntary from FY 2025-26. Assessment or assurance of value-chain disclosures is voluntary from FY 2026-27.
A first reporting cycle may require approximately 12 to 20 weeks as a project-planning estimate. The actual duration depends on the number of facilities, data quality, reporting framework and assessment requirements.
