UPSC Prelims 2025 Q4: BRSR Sustainability Reporting — Explained
Consider the following statements:
I. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
II. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.
Which of the statements given above is/are correct?
- I only
- II only
- Both I and II
- Neither I nor II
Answer: (b) II only
Statement-wise explanation
- I: incorrect — The BRSR is required by SEBI, the securities market regulator, not by the RBI. SEBI's circular of 10 May 2021 requires it under Regulation 34(2)(f) of the SEBI (LODR) Regulations, 2015. Even the SEBI rule does not cover 'all' listed companies. It applies only to the top 1,000 listed entities by market capitalisation, on a voluntary basis for FY 2021-22 and as a mandatory requirement from FY 2022-23. The statement therefore names the wrong regulator and the wrong coverage.
- II: correct — The BRSR asks companies to report their environmental, social and governance (ESG) performance against the nine principles of the National Guidelines on Responsible Business Conduct. Examples include energy and water use, emissions, waste, employee welfare, human rights and stakeholder complaints. It includes a few financial figures, such as turnover and CSR spending. Most of its disclosures are non-financial, which is why it is described as ESG or non-financial reporting.
How to eliminate
Statement I carries two warning signs. The first is the absolute word 'all': SEBI ties disclosure duties to market-capitalisation thresholds, here the top 1,000, so 'all listed companies' should make you suspicious. The second is the regulator. Listed companies' disclosure rules come from SEBI under the LODR Regulations. The RBI regulates banks and NBFCs, not listed companies as a class. Either sign is enough to reject Statement I. That leaves 'II only' and 'neither'. Statement II follows from the name of the report: a 'Business Responsibility and Sustainability' report deals with ESG matters, not balance sheets. Fact to remember: the BRSR is SEBI's report for the top 1,000 listed companies, and its disclosures are ESG (non-financial) disclosures.
Know more
What the BRSR is. It is India's main framework for corporate ESG reporting. SEBI requires it, and it sits in the annual report of the largest listed companies. Its structure follows the National Guidelines on Responsible Business Conduct (NGRBC), which have nine principles. The Ministry of Corporate Affairs released the NGRBC in 2019.
How it evolved
| Stage | Year | Who reports | Key feature |
|---|---|---|---|
| Business Responsibility Report (BRR) | 2012 | Top 100 listed entities | First ESG disclosure under SEBI's listing rules |
| BRR extended | 2019 | Top 1,000 listed entities | Same format, wider coverage |
| BRSR | 2021 circular | Top 1,000 | Voluntary FY 2021-22, mandatory from FY 2022-23; replaced the BRR |
| BRSR Core | July 2023 circular | Top 150 first, rising to top 1,000 by FY 2026-27 | A set of key indicators checked by a third party |
Structure. The report has three sections: general disclosures, management and process disclosures, and principle-wise performance. Each principle has Essential Indicators, which every reporting company must disclose. It also has Leadership Indicators, which are voluntary and meant for companies aiming higher.
Value chain. SEBI also asks large companies to report ESG data on their major suppliers and buyers. A March 2025 circular made this voluntary for the top 250 companies from FY 2025-26. It also allowed BRSR Core to be checked through either 'assurance' or 'assessment'.
Do not confuse it with CSR. CSR spending under Section 135 of the Companies Act, 2013 is a Ministry of Corporate Affairs rule about spending money. The BRSR is a SEBI rule about disclosing ESG performance. ESG investors read the BRSR to judge non-financial risk, and third-party checks of BRSR Core are meant to reduce greenwashing.
In the news
SEBI changed the BRSR Core framework in the months before the 2025 Prelims. Its board approved the changes in December 2024, and a circular on 28 March 2025 allowed third-party 'assessment' as well as 'assurance' and made value-chain ESG disclosures voluntary for the top 250 companies from FY 2025-26. This kept the BRSR in the business news.
NCERT Concepts to Revise
- Business responsibility and sustainability reporting: Both statements test who requires the BRSR, which companies must file it, and what kind of information it carries.
- ESG: BRSR disclosures are organised around ESG themes, which decides how to read the 'financial or non-financial' wording in Statement II.
- Corporate social responsibility: CSR is a Companies Act spending rule. Aspirants often mix it up with the BRSR, a SEBI disclosure rule.
- Corporate governance: The BRSR is part of SEBI's listing-disclosure rules, a key tool of corporate governance for listed companies.
- Greenwashing: Third-party checks of BRSR Core data were introduced to make ESG claims credible and reduce greenwashing.