India’s securities and commodities market regulator has proposed changes to the country’s Business Responsibility and Sustainability Reporting (BRSR) framework, opening for companies to earn “leadership” status by listing green credits they or their value chain partners have generated through tree-planting and other environmentally beneficial activities.

A Securities and Exchange Board of India (SEBI) panel has proposed measures to ease environmental, social, and governance (ESG) related disclosures by listed companies and their value chain partners.

The BRSR framework is a mandatory disclosure mechanism for the top 1,000 listed companies or businesses in the country to report their performance on ESG aspects and demonstrate their commitment to responsible business practices.

In its consultation paper released Wednesday, the SEBI panel proposed including the number of green credits generated by a company and the value chain partners as a “leadership indicator” under BRSR.

The Green Credit Scheme was announced by the government in mid-2023, and will involve crediting of a wide range of activities, including planting trees, water conservation, sustainable agriculture, and mangrove conservation.

However, for the time being, only regulations concerning tree plantations have been released.

Published in February, those included guidelines for state governments to identify degraded land parcels and let companies earn credits by planting trees there.

However, the guidelines led to a huge outcry with several environmental experts calling the scheme “disastrous” as it would reward planting trees on land where they don’t belong, potentially damaging existing ecosystems.

Even so, several Indian state governments have moved ahead and approved hundreds of land parcels for inclusion in the scheme.

In order to ease disclosures for listed companies, the SEBI panel this week suggested making disclosures involving value chain partners voluntary for the first year.

SEBI is also contemplating to mandate disclosures on ESG metrics for only those value chain partners that individually comprise 2% or more of the company’s purchase or sales by value.

Previously, the disclosure was for value chain partners cumulatively comprising 75% of the purchases or sales.

By Nikita Pandey – Nikita@carbon-pulse.com

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