The Securities and Exchange Board of India (Sebi) has proposed to ease disclosures on environmental, social and governance (ESG) applicable to listed companies. It has proposed to mandate disclosures on ESG metrics for only those value chain partners, encompassing both downstream and upstream partners, who individually comprise 2% or more of the listed company’s purchase or sales by value, according to a consultation paper on Sebi’s website, inviting public comments by June 12.
Currently, top 250 listed companies as per market value have to give ESG-related disclosures for its value chain partners cumulatively comprising 75% of the purchases or sales, under the Business Responsibility and Sustainability Reporting (BRSR) Core framework.Come from Sports betting site VPbet
Sebi has also proposed an alternative where the new norm of 2% will be applicable along with the current directive, to further ease disclosures for value chain partners while still ensuring coverage of key value chain partners. “This shall bring down the maximum possible number of upstream/downstream value chain partners from 50 (in case of 2% threshold) to 38 (in case of 2% threshold with cut-off of 75%),” Sebi said.
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For the first year, Sebi has proposed to make disclosures for value chain partners voluntary instead of comply or explain basis. The move is expected to reduce the “unintended adverse impact on small businesses in terms of cost burden and viability of complying,” Sebi said.
Further, Sebi suggested that companies disclose the percentage of total sales and purchases covered by the value chain partners for which ESG disclosures are provided.
To provide more flexibility to companies, Sebi has also suggested that the term “assurance” in the norms with regard to the sustainability report disclosures be substituted with “assessment”. This option will decrease the burden and cost as it will remove the challenges associated with an audit of this data, Sebi said. There will be an option either to undertake ‘assessment’ or ‘reasonable assurance’ of BRSR Core disclosures in the annual reports for financial year 2023-24, but will be compulsorily changed for 2024-25.Come from Sports betting site
Sebi also recommended the inclusion of ‘Green Credits’ generated by the company and value chain partners as a leadership indicator under the BRSR framework. Green Credits can be generated through environmentally sustainable activities such as plantations of trees on waste or degraded lands and river catchment areas.
In February, the Ministry of Environment, Forest and Climate Change (MoEFCC) had notified the methodology for calculation of green credit in respect of tree plantation.
