INTRODUCTION
Environmental, Social and Governance (ESG) disclosures by corporates have emerged as an effective tool for enabling investors to assess a company’s sustainability performance and for increasing transparency. However greenwashing practices hinder these objectives by reducing their reliability. In response, India has strengthened its ESG reporting framework over the years. This has culminated in the introduction of BRSR core which requires mandatory assurance of key sustainability metrics. This blog analyses whether BRSR core can effectively curb greenwashing. It analyses the evolution of India’s ESG reporting framework and evaluates the mechanisms through which this framework seeks to enhance reliability and transparency.
WHY GREENWASHING IS A REGULATORY CONCERN
The increased prominence of ESG reporting has led to higher scrutiny of sustainability and responsibility claims made by corporates. Greenwashing is a phenomenon where companies exaggerate or misrepresent their performance on ESG metrics. Such practices undermine the credibility of ESG disclosures. They create a disconnect between a company’s sustainability claims and its actual practices and performance. This disconnect misleads investors, impacts investment decisions and weakens public trust in ESG reporting.[1]
One of the primary reasons behind greenwashing is the absence of standardized and verifiable disclosure frameworks. In the absence of uniform reporting standards set by the government, companies can manipulate ESG initiatives to their favor and omit negative ESG impacts. Such discrepancies cause information asymmetry and make it difficult for investors and stakeholders to accurately assess sustainability performance.[2] Reporting biases are further encouraged by managers being incentivized to present overly favorable ESG reports because positive ESG disclosures can enhance investor perception and firm valuation.[3] Therefore, ESG reporting frameworks play a central role in curbing greenwashing, increasing accountability and improving market transparency. Robust frameworks often include standardized, measurable and independently verifiable disclosures.[4]
INDIA’S REGULATORY RESPONSE: FROM VOLUNTARY ESG REPORTING TO BRSR
Prior to the introduction of a mandatory disclosure framework for ESG, India relied on a voluntary sustainability initiative. In 2011, the National Voluntary Guidelines (NVG’s) were introduced by the Ministry of Corporate Affairs[5]. Building upon the principles of these guidelines, the Securities and Exchange Board of India (SEBI) introduced the Business Responsibility Report (BRR) in 2012.[6] Initially non-financial disclosures were mandated only for the top 100 listed companies. Subsequently, the requirement was extended to the top 500 and later the top 1000 listed entities. This reflected the growing importance of ESG reporting in India.
However, the BRR posed many limitations. To move beyond these limitations and align India’s ESG framework with global developments, the NGRBCs – “National guidelines on Responsible Business Conduct” were written in place of the NVG’s in March 2019[7]. On 8th May 2020, the committee report detailed the scope of reporting requirements and provided an updated format. The proposed name for the report was Business Responsibility and Reporting Framework (BRSR)[8]. The BRSR became voluntary for FY 2021–22 and mandatory for the top 1,000 listed entities from FY 2022–23[9].
Even before the introduction of BRSR core, the BRSR was a major step towards improving the quality and comprehensiveness of sustainability reporting in India. It provided standardized frameworks to measure ESG performance over key performance indicators. Further, it significantly expanded quantitative reporting and allowed investors to compare companies over ESG performance more accurately. The BRSR represented greater alignment with global ESG disclosure practices by adopting principles of sustainability reporting that were internationally recognized.
HOW BRSR CORE ATTEMPTS TO REDUCE GREENWASHING
With the purpose of enhancing the reliability of ESG disclosures, the BRSR core was introduced as a subset of the BRSR by the SEBI in 2023. The BRSR core contains a limited set of Key Performance Indicators (KPIs) which focus on quantitative and assurance backed-data.[10] Following are the steps taken by the BRSR core to strengthen credibility of disclosures, improve transparency and ultimately reduce the scope of greenwashing by Indian corporates:
- Independent Assurance
One of the key features of BRSR core is that it requires reasonable assurance over a prescribed set of key ESG performance indicators (KPIs). For facilitating verification, a baseline reporting methodology is specified. It requires listed entities to appoint independent assurance providers who possess the necessary expertise and are not burdened by conflict of interest.[11] Some of the ESG attributes requiring independent assurance include Green house Gas (GHG) footprint, water footprint and enabling gender diversity in business. Independent assurance contributes in strengthening the reliability of ESG disclosures by testing sustainability claims with external verification, thus it reduces opportunities for greenwashing. Moreover, as credibility of ESG disclosures increases, transparency and investor confidence also improve in reported sustainability performance.[12]
- Value Chain Disclosures
Another key feature of BRSR core is that it extends ESG reporting beyond the listed entity. It mandates ESG disclosures relating to its value chain which covers key upstream and downstream partners that account for 75% of its purchases and sales.[13] This broadens the scope of accountability which arises from suppliers and business partners. When disclosure is required alongside phased assurance of value chain ESG data, information gaps are reduced. Furthermore, it also discourages companies from concealing adverse environmental impacts that might occur beyond their direct operations.[14]
- PPP-adjusted intensity ratios
BRSR core has also introduced PPP-adjusted intensity ratios with the purpose of improving global comparability of ESG disclosures. It accounts for the differences in purchasing power across jurisdictions.[15] Empirical research shows that PPP-adjusted metrics can be utilized in evaluating environmental performance, particularly in emerging economies where nominal revenue figures may distort cross-country ESG comparisons.[16] However, it does not share a direct relationship with diminishing greenwashing. PPP-adjusted ratios become much more effective when corroborated with assurance because if the underlying information is independently verified, manipulation becomes more difficult.
- Introduction of New KPIs
Keeping in view the relevance of the Indian / Emerging market context, BRSR core identified and introduced a few new KPIs for assurance such as job creation in small towns, openness of business, gross wages paid to women etc.[17] This makes ESG attributes such as enabling gender diversity in business and enabling inclusive development not only more relevant and comprehensive but also more transparent and reliable as they require independent assurance. Therefore, these new KPIs have the potential to reduce greenwashing and contribute positively to social and economic development.
CONCLUSION
BRSR core marks a significant shift in India’s ESG disclosure framework by moving towards assurance backed data. Reforms such as independent assurance, value chain disclosures and enhanced comparability address structural weaknesses that enabled greenwashing in the past. While these measures are effective tools for improving reliable information and credibility, they cannot entirely eliminate misleading sustainability claims. Their effectiveness will be further dependent upon competent assurance providers and consistent regulatory enforcement. Nevertheless, BRSR core signals an important step towards building stronger investor confidence and reducing information asymmetry in India.
Author(s) Name: Saksham Arora (Jindal Global Law School, O.P. Jindal Global University, Sonipat, Haryana)
References:
[1] Xinyu Hao, Tingting Tian, Liang Dong, Christina W Y Wong and Kee-hung Lai, ‘Unmasking Greenwashing in ESG Disclosure: Insights from Evolutionary Game Analysis’ (2026) Annals of Operations Research 356(1) 667.
[2] Henry L Friedman, Mirko S Heinle and Irina Luneva, ‘A Theoretical Framework for ESG Reporting to Investors’ (2024) Review of Accounting Studies 29(4) 2297.
[3] Ibid.
[4] Xinyu Hao, Tingting Tian, Liang Dong, Christina W Y Wong and Kee-hung Lai, ‘Unmasking Greenwashing in ESG Disclosure: Insights from Evolutionary Game Analysis’ (2026) Annals of Operations Research 356(1) 667.
[5] Ministry of Corporate Affairs, National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (Government of India, 2011).
[6] Securities and Exchange Board of India, Business Responsibility Reports (CIR/CFD/DIL/8/2012, 13 August 2012).
[7] Ministry of Corporate Affairs, National Guidelines on Responsible Business Conduct (Government of India, 2019).
[8] Ministry of Corporate Affairs, Report of the Committee on Business Responsibility Reporting (8 May 2020).
[9] Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting by Listed Entities (Circular No SEBI/HO/CFD/CMD-2/P/CIR/2021/562, 10 May 2021).
[10] Securities and Exchange Board of India, SEBI Board Meeting (Press Release No 6/2023, 29 March 2023).
[11] Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting by Listed Entities (Circular No SEBI/HO/CFD/CMD-2/P/CIR/2021/562, 10 May 2021).
[12] Kanika Mangla and Neha Yadav, ‘Investor Behaviour and ESG Reporting: Insights from BRSR Core KPIs’ (2026) Asian and Pacific Economic Review 19(1) 243.
[13] Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting by Listed Entities (Circular No SEBI/HO/CFD/CMD-2/P/CIR/2021/562, 10 May 2021).
[14] Sushmita Dhar and Mohd Imran, ‘Measuring Actual Environmental Impact from Business Responsibility and Sustainability Reporting: A Quantitative Framework for Environmental Human Rights Assessment in India’ (2026) Environmental Research Letters 21 044010.
[15] Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting by Listed Entities (Circular No SEBI/HO/CFD/CMD-2/P/CIR/2021/562, 10 May 2021).
[16] Sushmita Dhar and Mohd Imran, ‘Measuring Actual Environmental Impact from Business Responsibility and Sustainability Reporting: A Quantitative Framework for Environmental Human Rights Assessment in India’ (2026) Environmental Research Letters 21 044010.
[17] Securities and Exchange Board of India, Business Responsibility and Sustainability Reporting by Listed Entities (Circular No SEBI/HO/CFD/CMD-2/P/CIR/2021/562, 10 May 2021).