SEBI Directs Listed Companies To Reveal Green Credit Program Under BRSR Charter
It expects businesses to respect and make efforts to protect and restore the environment;
SEBI Directs Listed Companies To Reveal Green Credit Program Under BRSR Charter
It expects businesses to respect and make efforts to protect and restore the environment
The Securities and Exchange Board of India (SEBI) has mandated listed companies to disclose 'Green Credit Program' details in their Business Responsibility and Sustainability Reporting (BRSR) starting from Financial Year 2024-25.
The circular of the capital markets regulator said that green credits, generated by the listed company and their top 10 value chain partners, could be added as a leadership indicator under Principle 6 of BRSR.
It stated that businesses should respect and make efforts to protect and restore the environment. While including upstream and downstream value chain partners, it could be created by planting trees on waste or degraded lands and river catchments.
The disclosures will be in line with the Ministry of Environment, Forest and Climate Change notification issued in February 2024.
SEBI has also redefined 'value chain partners', which encompasses the value chain partners, individually comprising 2 percent or more of the listed entity's purchases or sales by value.
However, the companies can limit their disclosure to cover 75 percent of their sale and purchases.
If a company discloses the environmental, social and governance (ESG) information about its value chain, it must reveal the percentage of total sales and purchases.
For the first year of value chain ESG disclosures (FY 2025-26), a company could choose whether to report the data from the previous year (FY 2024-25).
SEBI added that from FY 2025-26, the top 250 listed companies (by market capitalization) could voluntarily disclose ESG information about their value chain. From FY 2026-27, the assessment or assurance of the disclosures would be voluntary.
The SEBI circular further informed about the BRSR disclosures and ESG reporting.
It said that the top 500 listed entities will have to undergo BRSR Core assessment in FY 2025-26. This will expand in FY 2026-27 to include the top 1,000 listed entities to promote broader sustainability reporting across a larger segment of the corporate sector.
BRSR includes key performance indicators (KPIs) for nine ESG areas, with new indicators relevant to India, including job creation in small towns and wages for women.
