The Securities and Exchange Board of India (SEBI) is set to review and possibly enhance the Environmental, Social, and Governance (ESG) disclosure requirements for listed companies. This move is aimed at strengthening transparency and ensuring that firms provide more comprehensive and reliable information regarding their ESG initiatives and performance. The review comes as ESG factors increasingly influence investment decisions both domestically and globally, with stakeholders demanding greater accountability from corporations on issues related to sustainability, social responsibility, and governance practices.

SEBI had earlier introduced the Business Responsibility and Sustainability Reporting (BRSR) framework, making it mandatory for the top 1,000 listed companies by market capitalization to disclose their ESG practices. Now, the regulator is considering updates based on feedback from market participants, developments in global best practices, and the evolving nature of sustainability concerns. The potential revisions may include stricter verification mechanisms for ESG disclosures, expanded coverage to include a larger number of firms, and greater emphasis on materiality, ensuring that companies report on ESG factors that are most relevant to their business models and stakeholders.

Additionally, SEBI is also focusing on preventing greenwashing — where companies might present an exaggerated or misleading impression of their environmental commitments. The regulator may propose new guidelines to standardize ESG ratings and disclosures to enhance comparability and credibility across industries. These measures are expected to bolster investor confidence, improve corporate governance standards, and support India’s broader goals related to sustainable development and climate change mitigation. The revised framework, once finalized, is likely to have a significant impact on corporate reporting practices and the way companies integrate ESG factors into their core strategies.