BRSR Compliance 2026: A Practical Guide for Indian Companies and Their Value Chains

From the current financial year, the Business Responsibility and Sustainability Report is no longer a disclosure exercise you can hand to the CSR team the week before filing. With BRSR Core reasonable assurance now reaching the top 1,000 listed entities, and value-chain expectations sitting just behind it, the numbers in your sustainability report carry the same evidentiary weight as your financial statements. If you are a listed company — or a supplier to one — here is what BRSR compliance actually demands in 2026 and how to prepare without panic.

What BRSR Is, and Why 2026 Is a Turning Point

The Business Responsibility and Sustainability Report (BRSR) is SEBI's mandatory ESG disclosure format, filed as part of the annual report under the LODR Regulations. It has applied to the top 1,000 listed entities by market capitalisation since FY 2022-23, structured around the nine principles of the National Guidelines on Responsible Business Conduct.

For its first few years, the full BRSR was largely a self-declared narrative. That is what has changed. SEBI has been phasing in BRSR Core — a defined subset of 49 key performance indicators grouped under nine ESG attributes — that must be independently verified with reasonable assurance, the most stringent assurance standard, stricter than the "limited assurance" common in global frameworks.The phase-in reaches its widest point in the current year. For FY 2026-27, BRSR Core assurance applies to the top 1,000 listed entities, up from the top 500 in FY 2025-26, top 250 in FY 2024-25 and top 150 in FY 2023-24. In other words, effectively the entire BRSR universe now sits inside the assurance net. This is why 2026 is the turning point: reporting and assurance obligations have converged.

The Nine Attributes Inside BRSR Core

BRSR Core narrows the sprawling full report down to the metrics SEBI considers most decision-useful and most prone to greenwashing. The nine attributes span greenhouse gas emissions, water consumption and discharge, waste management, energy usage, employee gender diversity and wages, inclusive development, fairness in dealing with customers, and openness of business.

Two design choices matter for how you collect data. First, several KPIs are expressed as intensity ratios — for example, emissions or water per rupee of turnover, adjusted for Purchasing Power Parity (PPP) so Indian companies can be compared globally, with output-based measures for manufacturers. Second, BRSR Core adds India-specific indicators absent from most international standards, including job creation in small towns, gross wages paid to women, and openness of business. If your ESG data systems were built around a foreign framework, expect gaps precisely on these India-first metrics.

The March 2025 Circular: What Actually Eased

The single most important regulatory development for 2026 planning is SEBI's circular dated 28 March 2025, issued to facilitate ease of doing business. It made three changes worth committing to memory.

First, it introduced an "assessment or assurance" choice. Companies may now opt for an "assessment" — conducted in line with Industry Standards Forum (ISF) guidelines — instead of formal "assurance". SEBI added the word "assessment" specifically to loosen the exclusive association with the audit profession, widening the pool of eligible providers.

Second, and most consequentially for suppliers, value-chain ESG disclosure was made voluntary. It had been scheduled to apply to larger entities on a comply-or-explain basis; the circular converted it to a voluntary disclosure beginning FY 2025-26, with assessment or assurance of value-chain data pushed to FY 2026-27. The relief is real, but read it correctly: SEBI has signalled that value-chain disclosure is expected to become mandatory within the next two to three years. This is a deferral, not a cancellation.

Third, the circular added a leadership indicator on green credits — both generated and procured — under Principle 6, aligning BRSR with the Green Credit Programme.

How Value Chain Is Defined

Where value-chain disclosure does apply, the boundary is specific. It covers the top upstream and downstream partners that individually account for 2% or more of the listed entity's purchases or sales by value. A reporting company may cap the exercise at partners covering 75% of purchases and sales by value. This threshold is why unlisted SMEs increasingly receive ESG data requests from their large listed customers: you may not file a BRSR yourself, but your buyer's BRSR Core depends on your numbers.

Who Must Comply, and When

If your company sits within the top 1,000 listed entities by market capitalisation, full BRSR filing is mandatory and BRSR Core reasonable assurance applies for FY 2026-27. Companies just outside that band should treat assurance-readiness as imminent rather than optional, given SEBI's consistent trajectory of widening the net.

For unlisted companies and SMEs, there is no direct SEBI mandate — but there is a commercial one. Once a listed customer begins collecting value-chain data, your ESG disclosures become a condition of continuing to supply. Building a basic emissions, water, waste and workforce dataset now is far cheaper than scrambling when a key account asks for assured figures.

Common Compliance Failures to Avoid

The recurring problems reviewers see are rarely about ambition and almost always about evidence. Reported figures that cannot be traced to source meters, invoices or payroll records fail assurance immediately. Intensity ratios calculated on the wrong denominator — nominal revenue instead of PPP-adjusted turnover — are a frequent correction. Gender-wage and small-town job KPIs are often left blank because the underlying HR data was never disaggregated. And value-chain sections are sometimes marked "not applicable" when the correct treatment is a voluntary disclosure with a clear explanation.

Treating assurance as a year-end event is the deepest mistake. Reasonable assurance requires a documented methodology, consistent boundaries year on year, and a data trail your provider can independently test. That is a system, not a submission.

What This Means for Your Business

BRSR compliance in 2026 is no longer a reporting formality — it is an assured, auditable statement of how your business actually operates, and increasingly a passport to remaining in the supply chains of India's largest companies. The organisations that fare best are treating this year as the moment to build clean, source-linked ESG data systems before value-chain assurance becomes mandatory.

Testa & Tegmen advises listed entities and their suppliers on BRSR and BRSR Core readiness — mapping the nine attributes to your data sources, fixing intensity-ratio methodology, closing India-specific KPI gaps, and preparing for assessment or assurance. If you want your FY 2026-27 report to survivescrutiny rather than invite it, talk to our ESG advisory team before your data-collection window closes.