SEBI’s BRSR Dilutions: A Step Back for Worker Safety and Indian Business?
- Safe in India
- 5 days ago
- 3 min read
Updated: 1 day ago
This blog talks about recent and more proposed dilutions in ESG-reporting related listed companies’ annual submission to SEBI, further compromising working conditions in their suppliers, which we believe is short-termism (again) and will not help India’s competitiveness and/or Indians
Recent Dilutions to BRSR Core:
In July 2023, SEBI introduced BRSR Core (July 2023 circular) and modified the 2015 SEBI Master Circular (version updated in Nov 2024).
The recent SEBI circular (March 2025) has significantly diluted key aspects of value (read supply) chain reporting under the Business Responsibility and Sustainability Report (BRSR) Core framework.
While positioned as a move to ease compliance, these changes raise serious concerns about worker safety, responsible supply chains, and India's ambition for sustainable manufacturing leadership.
Changes:
1.Voluntary Compliance: What was previously under a “comply or explain” mechanism is now entirely voluntary.
2. Postponement: ESG disclosures for the top 250 listed companies — including crucial data like accidents and injuries in the value chain — have been delayed from FY 2024-25 to FY 2025-26. Third-party assessment or assurance requirements have been deferred further to FY 2026-27.
3. Dilution from "Assurance" to "Assessment or Assurance": This is not merely a wording change. "Assessment" is a much lighter and less rigorous process than "Assurance", leading to significantly reduced accountability.
4.Narrower Value Chain Definition: Only those upstream and downstream partners contributing 2% or more of a company’s purchases or sales by value will now be included in disclosures.
More (potential) Future Dilutions:
The latest April 2025 Reuters report, which included comments from SEBI's new chairperson and a report by Responsible Investor, suggests further “rethink” is underway, which could lead to even weaker sustainability reporting requirements.
The unconvincing reasoning behind the recent/potential Dilutions:
SEBI cites familiar arguments: easing business effort, reducing costs, lack of capacity to measure accurately, and concerns over false disclosures.
However, our research with the Indian Institute of Corporate Affairs (IICA) clearly shows that with reasonable commitment, companies can manage strong sustainability reporting. For instance, in BRSR 2022-23, 19 out of 78 listed automobile companies audited 100% of their direct suppliers for health and safety, and 7 out of 78 did so for human rights.
Why Strong Reporting Matters:
Diluting BRSR Core will not only increase the risk of severe disabling injuries among workers, and indeed other injuries and work-related illnesses that we don’t measure but are voluminous but will also risk India's aspirations for higher manufacturing professionalism and labour productivity.
Why India Must Continue Strengthening ESG Reporting — Even as the West Steps Back:
1. Global Market Access and Investor Expectations: Even if ESG rules soften in the US and EU, global investors, including sovereign funds, pension managers, and ESG-focused asset managers, continue to demand credible sustainability disclosures. High-quality, long-term capital prefers countries with transparent, verifiable ESG data. Also, they have already developed to a high level of labour rights and enjoy high labour productivity. India needs to catch up on labour productivity.
2. India’s Development Needs: Strong ESG frameworks are vital for India's inclusive and sustainable growth. Worker safety, environmental protection, and human rights are urgent priorities today and not future luxuries. Securing dignified, safe, and productive work is key to turning India’s demographic dividend into a real advantage.
As India's latest Economic Survey argues, strong sustainability practices enhance competitiveness, a critical opportunity that we cannot afford to squander. Please check out our blog for details.
The time to act is now: we must strengthen, not weaken, India’s commitment to sustainable and responsible business.
Written by- Dhanraj B
Senior Manager - Advocacy
Reproduced below is our letter to the Chairperson, SEBI, highlighting our concern regarding the reported potential dilution of BRSR reporting. Please do write to them if you agree and/or send us your thoughts and suggestions at team@safeinindia.org
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