The regulatory direction is clear. Readiness is not.
SEBI’s Business Responsibility and Sustainability Reporting (BRSR) framework became mandatory for the top listed companies from FY 2022–23. The scope of mandatory BRSR reporting is expanding and the direction of regulatory travel is toward broader applicability, greater assurance requirements, and increasing use of ESG credentials as a factor in capital access.
For Indian mid-market businesses including those considering an IPO, seeking private equity investment, or operating in supply chains of larger listed companies ESG compliance is no longer a future consideration. It is a current business requirement that is shaping access to capital, investor decisions, and commercial partnerships.
This article does not address whether ESG is good or bad policy. It addresses what the requirements mean in practice and what mid-market businesses need to do about them.
What BRSR requires and what it actually means to comply
The BRSR framework requires reporting across nine principles derived from India’s National Guidelines on Responsible Business Conduct. These cover a broad range of environmental, social, and governance topics:
Environmental: Energy consumption and intensity. Water consumption and management. GHG emissions (Scope 1 and Scope 2). Waste generation and disposal. Environmental impact assessment.
Social: Employee wellbeing and safety. Training and development. Supplier and supply chain practices. Community and CSR activities. Data privacy and security.
Governance: Business ethics and anti-corruption. Grievance mechanisms. Stakeholder engagement.
Meaningful BRSR compliance is not a disclosure exercise. It is a data collection and measurement exercise. A company cannot report on its GHG emissions without first measuring them. It cannot report on employee training hours without tracking them. The disclosure is the output of a measurement and
management process and building that process takes time.
The assurance dimension
For companies in the top 150 by market capitalisation, BRSR Core reporting covering a specified set of key performance indicators requires reasonable assurance from a qualified third party. The assurance requirement is extending over time.
Assurance-ready ESG data requires not just measurement, but documented methodology, consistent application, and an evidence trail that supports the reported numbers. Companies that have not built their ESG data infrastructure with assurance in mind find the process of achieving assurance significantly more difficult and expensive.
Why mid-market businesses should care now
There are three practical reasons why Indian mid-market businesses even those not currently subject to mandatory BRSR should be building ESG capability.
IPO preparation. Listed company status brings BRSR obligations. A company preparing for an IPO needs to be able to demonstrate ESG compliance from listing. Building the data infrastructure before the IPO not after is significantly more efficient.
PE and institutional investment. Private equity investors and institutional lenders are increasingly incorporating ESG assessments into investment decisions. Businesses with organised ESG data and a clear sustainability narrative are better positioned in investor conversations than those without.
Supply chain requirements. Listed companies with BRSR supply chain reporting obligations are beginning to request ESG data from their suppliers. Mid-market businesses in the supply chains of large listed companies may face customer requests for ESG information that they are not currently in a position
to provide.
Where to start
The practical starting point for a mid-market business approaching ESG compliance is a gap assessment: what does the BRSR framework require, what data does the business currently collect, and what does it need to build?
The gap assessment identifies the measurement infrastructure that needs to be created GHG tracking, employee data systems, supplier assessment processes and the governance frameworks that need to be documented. It creates a prioritised roadmap that separates what needs to be done immediately from what can be built over time.
Acting early means you are building incrementally rather than scrambling to comply before a deadline or an investor conversation.
