Sebi includes Green Credit Program under BRSR framework

Capital markets regulator Sebi on Friday decided to include disclosure pertaining to the 'Green Credit Program' by listed companies under the Business Responsibility and Sustainability Reporting (BRSR) framework.

The Green Credits can be generated by a listed company and its value chain partners through plantations of trees on waste or degraded lands and river catchment areas.

In its circular, Sebi said that 'green credits' generated by the listed company and their top 10 value chain partners can be added as a leadership indicator under Principle 6 of BRSR, which states that businesses should respect and make efforts to protect and restore the environment.

This new requirement will be applicable for BRSR disclosures starting from FY 2024-25 and onwards.

The disclosure is also in line with the Ministry of Environment, Forest and Climate Change notification issued in February 2024.

In addition, Sebi has redefined 'value chain partners', which now encompass the upstream and downstream partners of a listed entity, individually comprising 2 per cent or more of the listed entity's purchases or sales by value respectively.

However, companies can limit their disclosure to cover 75 per cent of their purchases and sales.

If a company discloses ESG information about its value chain, it is also required to disclose the percentage of total sales and purchases covered by this information.

For the first year of value chain ESG (environmental, social and governance) disclosures (FY 2025-26), Sebi said that companies can choose whether or not to report data from the previous year (FY 2024-25).

From FY 2025-26, the top 250 listed companies (by market capitalization) can voluntarily disclose ESG information related to their value chain. From FY 2026-27, the assessment or assurance of these disclosures will be voluntary, Sebi said.

With regards to BRSR Disclosures and ESG reporting, Sebi said that the top 500 listed entities will be required to undergo BRSR Core assessment/assurance in FY 2025-26. This will expand further 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 Core includes key performance indicators (KPIs) for 9 ESG areas, with new indicators relevant to India, such as job creation in small towns and wages paid to women.