Transition strategies and climate disclosures within India’s Business Responsibility and Sustainability Reporting (BRSR) framework, mandated by SEBI, have earned praise for their focus on social responsibility and community engagement.
However, the IEEFA report titled “Corporate climate transition planning and disclosures in India” highlights a critical divergence. It highlights the difference between domestic standards and international investor expectations, specifically the International Sustainability Standards Board (ISSB) S2 requirements.
The report identifies that while Indian firms are increasingly setting net-zero targets, the disclosures often lack the technical how-to that global financiers require. Without specific roadmaps, these targets remain aspirational rather than actionable.
“Transition planning is not just about targets—it is about governance, accountability, and capital allocation. These elements are largely missing from the BRSR, the IEEFA analysis notes.
The capital access threat:
The most pressing concern is financial. As global sustainable finance markets shift toward demanding credible, forward-looking transition metrics, Indian companies with vague disclosures may find themselves locked out of affordable capital. Global investors are no longer satisfied with simple emissions inventories; they want to see how a company plans to survive a low-carbon economy.
“Without robust transition disclosures, Indian firms may struggle to meet the expectations of international capital markets that are aligning with ISSB standards,” warns the report.
Gaps:
The study identifies four critical omissions that undermine the credibility of Indian transition plans:
Absence of Scenario Analysis: BRSR does not mandate climate-related scenario analysis to test business resilience under different warming trajectories (e.g., 1.5 degrees C vs 2 degrees C).
Missing Financial Links: There is no requirement to disclose how transitions will be funded. Investors want to see specific capital expenditure (CapEx) and R&D priorities.
Governance & Accountability: Unlike global standards, the Indian framework has weak links between executive remuneration and climate performance.
Value Chain Dependencies: The report flags a weak treatment of supplier emissions and workforce transitions, which are essential for a credible just transition.
The path to alignment:
IEEFA calls for a phased strengthening of the BRSR. Key recommendations include:
Mandatory Levers: Requiring companies to disclose the specific levers (e.g., green hydrogen or grid modernization) they will use to meet targets.
Harmonization: SEBI should introduce a guidance document on climate transition planning, similar to the one released by ISSB in 2025, to provide a unified exercise for corporates.
Governance Disclosures: Strengthening board-level oversight requirements and linking rewards to climate outcomes.
