How to Make BRSR 2.0 Work for Business, Investors

For years, sustainability reporting in India was viewed as a compliance exercise. Companies disclosed what regulations required, investors skimmed through the data, and ESG discussions often remained confined to annual reports and boardroom presentations. That phase is ending.

Three years after Business Responsibility and Sustainability Reporting (BRSR) became mandatory for India's largest listed companies, a more interesting story is beginning to emerge. The real question is no longer whether companies are reporting sustainability information. Rather, it is whether that information is becoming useful enough to influence capital allocation, risk assessment, and corporate strategy.

The answer, increasingly, appears to be in favour of the latter.

Moving beyond tick-box approach

The latest CFA Institute analysis (The Current State of BRSR in Corporate India 2.0) of 300 listed companies suggests that corporate India is moving well beyond a tick-box approach. Companies are becoming increasingly comfortable with disclosure requirements and are beginning to measure, track, and report business impacts that until recently were considered difficult to quantify and beyond the scope of traditional corporate reporting. Yet the findings also expose a challenge that will define the next stage of India's sustainability journey: quality now matters more than quantity.

This mirrors a broader global shift. As of 2026, more than 20 jurisdictions have adopted or are implementing the International Sustainability Standards Board (ISSB) framework, collectively representing around 60% of global GDP, signalling a strong push toward a common global baseline for sustainability disclosures.

One of the clearest signs of progress is the rapid expansion of climate-related disclosures. The number of companies reporting renewable energy consumption increased from 224 in FY23 to 252 in FY25. Scope 3 emissions reporting, long regarded as one of the most complex areas of sustainability reporting because it captures emissions across the value chain, rose from 114 companies to 153 during the same period. Corporate India is gradually moving beyond measuring what happens within factory gates and office walls, beginning instead to examine the broader footprint of its business activities.

Comparability conundrum

One of the recurring themes emerging from current sustainability disclosures is the lack of consistency in how information is reported. Around three-fourths of companies continue to report sustainability information on a standalone, rather than consolidated basis. Measurement methodologies often vary. Reporting boundaries shift. Intensity metrics are calculated differently across organisations. For investors and regulators trying to compare companies across sectors or assess progress over time, these inconsistencies create unnecessary friction.

Interestingly, this challenge is not unique to India. Early implementation of the EU’s Corporate Sustainability Reporting Directive (CSRD) shows similar patterns, with significant variation in methodologies, scope, and level of detail across companies despite a common framework. What this reflects, is that the market no longer suffers from a shortage of disclosures. It suffers from a shortage of comparability.

Climate reporting illustrates this challenge particularly well. Reporting coverage for Scope 1 and Scope 2 emissions is now widespread. Scope 3 reporting is expanding rapidly. Yet investors increasingly want information that goes beyond historical numbers. They want to understand how companies intend to navigate a world shaped by carbon constraints, climate regulations, and changing consumer expectations. In other words, explaining future transition plans has become more valuable than reporting past emissions.

Capturing climate risks

Investors today want to know how climate risks could affect earnings. They want to understand whether sustainability-linked capital expenditure is likely to improve competitiveness. Crucially, they want evidence that environmental and social risks are being managed with the same rigour applied to financial risks. The Indian market is moving in that direction.

Analysis shows that more than half of the companies in the sample are now investing capital expenditure in technologies designed to deliver environmental or social benefits. Sustainable sourcing practices have become mainstream, with nearly 80 percent of companies reporting formal sourcing procedures.

What is particularly striking is that the conversation has moved beyond environmental metrics alone. Workforce stability, supply chain resilience, data privacy, product safety, and governance quality are all emerging as important indicators of long-term business strength. Sustainability is increasingly being viewed as a lens through which corporate resilience can be assessed.

This evolution is important because sustainability reporting was never meant to be an end in itself. The objective was always to help markets make better decisions.

Influencing capital flow

India deserves credit for how far it has come in a relatively short period. The BRSR framework has created a common language for discussing sustainability across corporate India. It has improved transparency, expanded data availability, and encouraged companies to pay closer attention to risks that were previously overlooked.

The next phase, however, will require greater ambition.

The focus must shift from disclosure to decision usefulness. Standardised metrics, clearer reporting boundaries, stronger assurance practices, and more forward-looking climate information will matter far more than adding new reporting requirements. This is precisely the direction in which global frameworks are evolving, toward inter-operable, comparable, and decision-useful disclosures that can support capital allocation across markets.

The winners in this next phase will not necessarily be the companies that publish the longest sustainability reports. They will be the companies that can demonstrate, with credible evidence, how sustainability considerations shape strategy, capital allocation, and long-term value creation.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.