ESG Compliance · SEBI BRSR Guide

BRSR Compliance India:
What MSMEs Need to Know in 2026

BRSR (Business Responsibility and Sustainability Report) is mandatory for listed companies — but value chain disclosure rules mean your MSME is already affected if you supply to large corporates. Here's what you need to understand and do now.

Action Required — Even If You Are Not Listed

From FY2024-25, top 250 listed companies must disclose ESG data from their supply chains. If you supply to large Indian corporates, ESG questionnaires are already arriving — or will soon.

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BRSR Applicability Rollout — SEBI Timeline

Financial Year	Companies Covered	Requirements
FY 2022-23	Top 1,000 listed companies by market cap	BRSR mandatory (replaced BRR)
FY 2023-24	Top 150 listed companies	BRSR Core — assurance mandatory (limited)
FY 2024-25	Top 250 listed companies	BRSR Core — assurance + value chain disclosure
FY 2025-26	Top 500 listed companies	Full BRSR including Scope 3 / supply chain
FY 2026-27+	All listed companies (NSE/BSE)	Full BRSR mandatory; SME boards being consulted

BRSR's 9 Principles at a Glance

BRSR is structured around 9 principles of responsible business conduct. Understanding what each covers helps you identify what data to collect.

P1Ethics & Transparency

Anti-bribery policy, whistleblower mechanism, transparent governance

P2Sustainable Products & Services

Sustainable sourcing, R&D for eco-products, circular economy practices

P3Employee Wellbeing

Wages, benefits, health & safety, training, POSH compliance

P4Stakeholder Engagement

Community engagement, CSR, grievance mechanisms for affected communities

P5Human Rights

Labour rights, supply chain human rights due diligence, no forced/child labour

P6Environment

Energy consumption, emissions (Scope 1/2/3), water, waste, biodiversity

P7Policy & Advocacy

Responsible industry advocacy, participation in sustainable policy development

P8Inclusive Growth

Procurement from marginalised groups, social value creation, B2B fairness

P9Customer Responsibility

Responsible marketing, product safety, consumer data protection, grievance redress

How BRSR Affects MSME Suppliers

You don't need to be listed to be affected. These are the four channels through which BRSR creates obligations for Indian MSMEs.

Vendor ESG Questionnaires

Your listed company customers will send ESG questionnaires asking about your emissions, waste, water consumption, wages, and safety data.

Action:

Start measuring these metrics now — even if you are not listed.

Supply Chain Audit Risk

Top 250 listed companies must disclose value chain ESG metrics from FY2024-25. Non-responsive or low-scoring vendors risk being replaced.

Action:

Respond to customer ESG questionnaires with documented data, not estimates.

Export Buyer Requirements

EU buyers subject to CSDD, EUDR, and upcoming CSDDD require their Indian suppliers to provide ESG data equivalent to what BRSR mandates.

Action:

Use BRSR disclosure as a baseline for export market ESG documentation.

Bank & NBFC Lending

RBI is introducing ESG criteria into bank credit evaluation. Lenders will increasingly price credit based on ESG risk for the ₹10 Cr+ business segment.

Action:

Build ESG documentation as part of your annual MIS and banking relationship management.

5-Step BRSR Readiness Plan for MSMEs

Map your disclosure exposure

Identify which of your customers are listed companies above ₹500 Cr revenue. These are your immediate BRSR risk customers — they will be asking for your ESG data within 12-24 months.

Start energy and emissions measurement

Assign your accounts team to collect monthly electricity consumption (kWh), diesel/generator fuel (litres), and PNG/LPG consumption. Calculate Scope 1 + Scope 2 emissions using standard factors. This is the most commonly requested metric.

Audit your workforce data

Pull from HR and payroll: headcount by gender, average wages vs minimum wage, employee turnover, training hours, and safety incidents (LTI count and severity). Most MSMEs have this data — it just needs to be aggregated.

Document your policies

Three policies cover 80% of BRSR governance requirements: Health & Safety Policy, Anti-Bribery and Code of Conduct, and Data Privacy Policy (DPDP Act 2023 alignment). IBEAN provides standard templates calibrated for MSME scale.

Create a simple ESG register

Compile all the above into a single Excel register with monthly tracking. When your buyer sends an ESG questionnaire, your answers will be data-backed, not estimated — which is the difference between being classified as "low risk" or "high risk" in their supply chain.

ESG Readiness Assessment — Know Your Score

IBEAN's ESG Readiness Assessment evaluates your current ESG data coverage across Environmental, Social, and Governance dimensions and builds your BRSR preparedness roadmap.

Start ESG Assessment BRSR Compliance Check

Frequently Asked Questions

BRSR Compliance India — FAQs

7 Questions

BRSR (Business Responsibility and Sustainability Report) is a mandatory ESG disclosure framework prescribed by SEBI (Securities and Exchange Board of India) for listed companies. It replaced the earlier Business Responsibility Report (BRR) from FY 2022-23. BRSR requires listed companies to report on 9 principles covering environment (energy, emissions, water, waste), social (employee welfare, human rights, community), and governance (ethics, transparency, board practices). Currently mandatory for listed companies, with phased rollout by market cap: Top 1,000 from FY22-23, Top 150 with mandatory assurance from FY23-24, Top 250 with value chain disclosure from FY24-25. Unlisted MSMEs are not directly required to file BRSR — but they are indirectly affected as suppliers to listed companies that must disclose their value chain ESG data.

BRSR creates a downstream effect on MSME suppliers through value chain disclosure requirements: From FY2024-25, listed companies in the top 250 must disclose their "value chain" ESG data — meaning the ESG performance of their top suppliers and buyers. This means listed company procurement teams will: send ESG questionnaires to their key suppliers (typically top 20–50 by spend); require emissions data, waste data, safety performance, and labour practice data; use this data to assess supplier risk and make procurement decisions. MSME suppliers who cannot provide ESG data risk: being classified as "high risk" in the listed company's supply chain; being subject to more frequent audits; and in some cases being replaced by more ESG-transparent alternatives. The practical implication: if you supply to listed companies with revenues above ₹1,000 Cr, you should start collecting and documenting ESG data now.

Preparing for buyer ESG questionnaires as an Indian MSME supplier: Step 1 — Map your baseline data. Start collecting: (a) monthly electricity bills → convert to kWh and CO2e; (b) monthly diesel/LPG consumption → convert to CO2e; (c) water consumption from utility bills or submeter; (d) waste records — segregate hazardous vs non-hazardous. Step 2 — Review your HR data. Pull from payroll: total headcount by gender, average wages, turnover rate, training hours logged, safety incidents. Step 3 — Document your policies. If you don't have written policies for anti-bribery, health and safety, and data protection — create them (IBEAN provides standard templates). Step 4 — Designate an owner. Someone in your management team should own ESG data collection — typically the HR manager or Operations Head. Step 5 — Use a simple ESG data register. A well-structured Excel or Google Sheet tracking the above monthly is sufficient for most MSME questionnaire responses.

Greenhouse Gas emissions are categorised into 3 scopes under the GHG Protocol (the global standard adopted by BRSR): Scope 1 — Direct emissions from sources owned or controlled by your company. For Indian manufacturers: diesel generator emissions, LPG/CNG for process heating, company-owned vehicle fleet. Scope 2 — Indirect emissions from purchased energy — primarily purchased electricity from the grid. For India: the grid emission factor is approximately 0.82 kg CO2e per kWh (varies by state). To reduce Scope 2: invest in solar rooftop (becomes Scope 1 renewable, offsetting Scope 2). Scope 3 — All other indirect emissions in the value chain — from raw material production upstream to product use and disposal downstream. BRSR Core requires Scope 1 and Scope 2 reporting from year 1. Scope 3 is required for top 250 companies from FY2025-26 but is complex to calculate. For MSMEs, focusing on Scope 1 + Scope 2 measurement and reduction is the practical priority.

BRSR Core is a subset of BRSR introduced in 2023, comprising a set of Key Performance Indicators (KPIs) across all 9 principles that must be mandatorily assured (verified by an independent third party). Full BRSR has ~150 disclosures across 3 sections — General, Management & Process, and Performance. BRSR Core is approximately 49 specific KPIs that are most material and measurable — things like Greenhouse Gas emissions (Scope 1 and 2), water withdrawal and discharge, waste generated, gender pay ratio, employee turnover rate, and board independence percentage. For the Top 150 listed companies (FY23-24), BRSR Core requires limited third-party assurance. For Top 250 (FY24-25+), reasonable assurance is required. The assurance requirement means the data must be accurate enough to withstand auditor scrutiny — driving documentation standards up significantly.

For manufacturing SMEs that want to align with BRSR (voluntarily or because customers require it), the most important disclosures are: Environment — Energy consumption (total electricity + fuel + renewable mix); Greenhouse Gas emissions (Scope 1 from direct fuel use + Scope 2 from purchased electricity); Water consumption and wastewater treatment; Waste generated by type (hazardous and non-hazardous) and disposal method. Social — Employee wages and benefits (average vs minimum wage ratio); Employee turnover rate; Health and safety incidents (LTIFR — Lost Time Injury Frequency Rate); Training hours per employee; POSH committee and complaints data. Governance — Percentage of women on board/leadership; Anti-bribery policy in place; Whistleblower mechanism available. These are the KPIs most commonly requested by listed company procurement teams and export buyers.

Currently, BRSR is mandatory only for listed companies (NSE, BSE, including SME boards). Unlisted private limited companies, LLPs, and proprietorships are not required to file BRSR. However, voluntary BRSR alignment is strongly recommended for: (1) Companies planning to list within 3–5 years — having 2–3 years of ESG data makes IPO due diligence easier; (2) Companies supplying to listed companies above ₹1,000 Cr revenue that will request value chain ESG data; (3) Companies exporting to EU, UK, or USA where buyers have their own ESG supplier requirements; (4) Companies seeking bank credit above ₹5 Cr — RBI is integrating ESG risk into credit evaluation for the formal sector. SEBI is also consulting on whether SME platform companies (NSE Emerge, BSE SME) should have simplified BRSR requirements — this may become mandatory for listed SMEs by FY2027-28.

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Related Resources

ESG Compliance for Indian SMEs →Supply Chain ESG Assessment →ESG Audit vs Assessment →DPDP Act Compliance →